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The Latest Outlook on Luxury

February 12, 2007 By: Lindsay Lambert Travel Agent

The Luxury Alliance meets to launch its second annual White Paper report

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

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

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