Having spent the first couple days of the week in Cannes, France at The International Luxury Travel Mart (#ILTM) I wish I had a Euro for each time the word experience or experiential was heard. Yes, I too would be rich.
While the show brings together mainly luxury hotels and travel agents who sell them, it also includes destinations, private jet charters, destination services, an array of vendors that cater to all ends of luxury and journalists. Thus most of the conversation and announcements tend to focus on general luxury.
I think it might be worth noting to show organizers that two weeks prior new research released by Wealth-X showed Ultra High Net Worth (UHNW) households (about 211,000 worldwide) spent $45 billion on luxury travel in 2013, 22.5 percent of the entire market. Oh, and the $45 billion doesn’t include $23 billion buying private jets and $22 billion on yachts! Of course with some $50 trillion in assets, the Super Rich define the term “deep pockets”
With that in mind, there were some points made at ILTM I thought of interest to folks selling to the Super Rich, hence my notes below:
1. Do the Super Rich chase loyalty points and miles like the rest of us?
Having launched a points based rewards program in 2010 (Ritz-Carlton alongside Four Seasons and Mandarin Oriental had been a long time holdout) Ritz-Carlton Chief Sales & Marketing Officer Ed French says guests are breaking into two types. One segment is “very frequent users of multiple (Marriott) brands” and the other is the “core Ritz-Carlton loyalist” who wants the recognition but cares “less about the currency.”
2. Picasso or Peyton Manning? What type of unique events do UHNWs prefer?
Ritz-Carlton top customers (read spenders) get access to limited attendance special events that they pay to participate in. Among offers that include sports, food and beverage, culinary and arts, sports is a strong number one in demand. A typical offering would be a Peyton Manning weekend at The Ritz-Carlton Denver.
3. Where can you find UHNWs?
Virtually anyone whose comments included the Super Rich agreed these creatures are global. Just because his or her travel agent is in Los Angeles, the UHNW is typically at some spot around the globe. French notes that while Puerto Rico’s core market is typically seen as the Eastern United States at his Ritz-Carlton Reserve resort in Dorado where guests pay $30,000 per night at its Mi Casa villa and other top suites run in the thousands guests are coming from around-the-world.
Paul James who heads Starwood’s luxury brands – The Luxury Collection, St. Regis and W – said Angola and Nepal have popped up as producing top spending customers.
My own belief is brands have yet to fully translate this understanding into their media strategy.
4. My Dear Watson, Save the Demographics, It’s The Dollars in Your Wallet…
In what James referred to as “the death of demographics” he said it is no longer enough to talk about Boomers and Millennials. “It matters how much money you have, and how do you want to spend it,” he told the audience. As an example, at St. Regis Sanya a group of six people booked the Presidential Suite at $30,000 per night for three nights. They arrived on a superyacht and the General Manager expected an older male business titan. The group was “six girls having an 18th birthday party.” In another case a $20,000 per night suite was booked on the day of arrival from a mobile device. James said these examples are of the diversity of the Super Rich, how they move around the world and transact luxury purchases.
5. For Marketers, Selling to the Super Rich is a Year Round Job….
Driving the luxury suite demand James says is a two-fold phenomena: the growth of the global Ultra High Net Worth traveler and the growth of very affluent populations in places like India, China and Brazil that travel at slightly different periods of the year than traditional affluent Americans and Europeans. The result is luxury hotels today operate “more efficiently” with “better staffing” as opposed to the days of distinct high and low seasons when luxury hotel staff resembled migrant workers moving from one place to another to serve champagne and changed the bed linens of royalty. It also means whatever time of year, for the most part, there are potential UHNW customers for the taking, somewhere in the world no matter where your business is based.
6. Can the Suites Get Any Bigger or Grander?
While grand suites at one time were rarely occupied by paid guests, James said family travel is driving a new wave of demand. To that end one Caribbean resort is getting ready to unveil and 11-bedroom top floor suite, including two masters and covering 20,000 square feet. Think $50,000 per night.
The trend for capturing UHNW spend isn’t limited to just large properties. Small Luxury Hotels and Resorts has culled out its hotels with 10 rooms or less to market them for full takeovers, and at the same time Preferred Hotels & Resorts announced a new program Preferred Residences that sells hotel villas for those who want the space of a residence and services and amenities of a hotel. Of course a thick wallet is de rigeur.
7. What excites the Super Rich?
At Elite Traveler early on we understood the stereotypes of who the super rich were and what they did were mainly incorrect (Think Downtown Abbey). I remember talking to a couple UHNW readers whose favorite part of our Top Suites features were the ‘who slept there.’ After all, how many people get to share a bed with Angelina Jolie or Brad Pitt, even if it’s not the same time. It’s only recently that marketers have begun to realize that the vast, vast majority of the Super Rich are what I call “driveway celebrities.” In other words, they made their money making widgets, in finance, selling cars, running fast food franchises or some mundane industry, and the only place they are “known” is with their friends and families in their own driveways or towns.
When Rosewood’s Le Crillon re-opens in Paris probably late next year it will feature two Karl Lagerfeld suites. And while yes, there are rich people who play polo, at least one on each team, and sit on museum and cultural center boards attending galas, the annual Iron Man Triathlon in Hawaii draws typically 20 to 30 private jets of Super Rich fitness warriors who are competing. Major college football teams such as University of Alabama, Texas, Notre Dame, LSU, Ohio State and so forth can get over a couple hundred private jets for a home game, about the same as Art Basel Miami. And don’t forget NASCAR or the Indy 500.
I thought it was insightful about how popular Peyton Manning is with Ritz-Carlton’s top customers. At the same time, Paul Kerr, the CEO of Small Luxury Hotels says his new program offering takeovers of smaller hotels, manors and castles means if you want, and you have the money, he can create your own Crawley family weekend, even if the next weekend you plan to go dirt biking in Baja or river fishing in Idaho.