From the new APEX program with American Express to an ongoing partnership with the Adventure Travel Trade Association (ATTA), the rising importance of experiences to the consumer – and the growth potential that means for the travel industry – was a running theme of the Travel Leaders Network EDGE Conference. That event drew 2,100 attendees to Las Vegas June 12 – 16.
“All of the forecasts peg this industry as growing 6 percent globally,” said Travel Leaders Group CEO Ninan Chacko during a “fireside chat” on APEX. “There’s been a shift away from consuming capital toward experiences.” Travel Leaders Network President Roger Block moderated the session, which also included American Express Vice President, Membership Rewards and Loyalty Benefits Catherine Keane.
“Customers are more excited and are spending more money on experiences than on commodities,” agreed Keane, noting that the “Pay with Points” portion of the APEX program – which allows travel agents to use their clients’ Membership Rewards points to book travel on the clients’ behalf – can encourage travelers to spend even more.
“Customers spend approximately 30 percent more on points transactions than on cash transactions,” Keane said. That’s because, psychologically speaking, spending points feels spending different than spending cash. A customer can justify splurging on a first-class ticket or other travel upgrade with points in a way that they typically can’t with cash.
The theme of spending on experiences was echoed in Travel Leaders’ ongoing partnership with the Adventure Travel Trade Association (ATTA), which Travel Agent had a chance to learn more about during a media briefing. According to a study released during the conference, adventure travel is a small but growing part of the Travel Leaders portfolio, with 86 percent of Travel Leaders respondents reporting growth in the sector over the past three years, and part of that growth is due to a broadening of the definition of adventure travel to include more types of experiences.
Over the past 10 years the most popular types of adventure travel has shifted, with cultural tours, hiking/walking/trekking and culinary and foodie travel now leading the list, according to the ATTA study.
“10 years ago we would see whitewater rafting, rock climbing topping that list,” said Russell Walters, North America strategic director of the ATTA. “We are perhaps seeing a broadening of the category.”
Adventure travel is appealing to a broad age bracket, as well. The top age ranges for adventure travel are evenly split, at 30 percent, between 29 to 40 years of age and 42 to 50 years of age. At the same time, travelers 51 to 60 years of age account for 22 percent of the sector.
“Customers are continuing to be more active and seeking more adventurous travels as they age,” Walters said.
Going forward, the ATTA is going to continue doing research to bring travel agents closer together with adventure travel suppliers, as well as to correct further misconceptions about the sector.
“We’re going to be doing our own research to our members to ask them, ‘What is it you’re looking for from an agency?” Walters said. The ATTA is also going to continue benchmarking its adventure travel survey to monitor changes in the sector over time.
One big misconception? Many travel agents are worried that adventure travel is not going to be profitable, Walters said, with average per person spend breaking down like this:
- $3,000 - $5,000: 33 percent
- $2,000 - $3,000: 30 percent
- $5,000+: 22.5 percent
“It skews higher than we originally thought it might,” Walters said. “It’s a really viable segment for agents to make a nice income.”