The Latest Outlook on Luxury

What are the biggest threats facing luxury travel providers today? Faux branding, Wall Street profiteering, online piracy and a shortage of good old-fashioned talent. So say senior managers of the five partner companies—Relais & Châteaux, The Leading Hotels of the World, Orient-Express Travel and Crystal and Silversea cruise lines—of the Luxury Alliance.

Luxury Alliance members at the New York City roundtable included (left to right) Marshall Calder and Paul McManus, both of The Leading Hotels of the World; Helen Lum of Strategic Vision; Greg Furman of the Luxury Marketing Council; Alistair Ballantine of Orient-Express Travel; Peter Bates of Strategic Vision; Jacques-Olivier Chauvin of Relais & Châteaux; and Nicole Lingos of The Leading Hotels of the World.

At The Pierre hotel in New York City January 30, key representatives from the Luxury Alliance partner companies were on hand to launch the group's second annual White Paper, "The Direction of Luxury," which cites these as the foremost challenges faced by the luxury sector of the global travel industry. Jacques-Olivier Chauvin, director general and CEO of Relais & Châteaux; Alistair Ballantine, vice president, Orient-Express Travel; and Marshall Calder, senior vice president of marketing for The Leading Hotels of the World, delved further into each matter, explaining first that hotel brands are increasingly extending their portfolios to include subsidiaries of questionable integrity, banking off of the cachet of their recognized and respected parent brands and flagship hotels.

Another cause for concern for luxury hotels, they said, is the "flip-and-run" tactic, wherein "maverick financiers" purchase, operate and market properties, then make a quick resale for a hefty profit—typically to the detriment of consumers.

Alistair Ballantine and Peter Bates.

A third major issue is online piracy. Unauthorized, unrelated parties lure consumers to their properties by creating fraudulent web sites that emulate and mimic the look and style—sometimes even the logos—of those of established hotel chains. Online piracy, according to Chauvin and Calder, who say their respective organizations have themselves been victimized, is most rampant out of Eastern Europe and southern Africa, and is "tantamount to identity theft."

Lastly, talent is becoming more difficult to come by in an industry in which, Ballantine said, personalization is the fastest-growing trend. Suggested solutions? Increased collaboration with consulting firms and academic institutions, more hospitality internships, more training/special reward programs and events for employees and open-door policies for valued staff members who return to a company after a departure.

The Leading Hotels of the World's Marshall Calder and Paul McManus offered insight from their company's  experiences with current trends.

The White Paper, which presents an outline and overview of challenges and marketing strategies as determined by the Luxury Alliance at its now annual roundtable meeting, also brings to light forecasts and trends in luxury travel.

Among them? The White Paper pinpoints Argentina, Brazil, the Baltic states, Botswana, the Indian Ocean, Peru, South Africa and Vietnam as places of increased interest in 2007, and singles out personalization as the fastest-growing demand among affluent travelers.

Spa, the Luxury Alliance reports, is the fastest-growing sector in hospitality; growing market segments as cited by Leading Spas range from family reunions to health-conscious baby boomers, while men, expectant moms, teens and boomers account for the top emerging spa market groups.

Jacques-Olivier Chauvin, director general and CEO of Relais & Châteaux

The Increase in Internet Use

Perhaps more so than any other trend unearthed by the Luxury Alliance, increasing Internet usage promises to remain at the forefront of trends that are bound to affect the travel agent community. At the White Paper launch, Travel Agent spoke privately with Marshall Calder, who, despite Leading's own initiatives for online bookings, says that for travel agents, the Internet is as much friend as it is foe.

"Luxury travel consumers are information-starved—they don't feel that there's any one spot they can go to to get all the answers," Calder says. "They read magazines, they read guide books, they read hotel directories, they go online and they seek the advice of their travel agents," he continues.

"And if it's a complex booking, a trip with multiple hotels, they research online and they book with a travel agent. We're not trying to combat anything—we're just trying to tap into what we see as a shift. Some customers want to take control of the entire planning process, and that's the trend that we're seeing—we're trying to get our two cents worth."

What does all this mean for travel agents?

"The majority of our business still comes from travel agents, and it's going to be that way for a long, long time," Calder states firmly.

"There are some concerns that travel agencies have, but the good ones have already met those concerns. They really do provide a valuable service. Gone are the days 10 or 15 years ago—we've seen a shakeout in the industry and we have fewer travel agencies today as a result of that. Now travel agencies are offering a tremendous amount of value in their expertise, and a point of view...there's a tremendous amount of value there. They've transformed and they did it in a very smart and healthy way."

To view the White Paper in its entirety, or for more information about the Luxury Alliance, visit www.luxuryalliance.com