Luxury travel, even for business, continues its comeback from the depths of the recession, the industry is finding.
But an erratic economy is making for a slow
and spotty return that remains below the highflying days before the
financial collapse of 2008.
The investment
bankers, Wall Street lawyers and other elite business travelers served
by high-end travel service Ovation Travel, for instance, are buying just
3% more first-class airline tickets this year than they were last year,
according to Ovation senior executive Michael Steiner.
"It's
the same as last year, which for some people is a good sign," he says.
It could be worse. Despite continued economic uncertainties, he says,
Ovation's corporate clients have eased up on the restrictive ticket
policies they imposed in 2009.
Where Ovation
and luxury hotel chains Ritz-Carlton and Four Seasons have seen
significant growth in business is in business meetings and special
events.
GROUP BOOKINGS UP
Ovation's
bookings jumped 15% this year over last year, and clients are back to
booking four- and five-star hotels for their corporate retreats and
other gatherings, Steiner says.
"During the recession, forget it. There was nothing going on," he says.
During
the last three to four months, Marriott International's Ritz-Carlton
has seen the pace of group business bookings for 2013 improve "in the
low single digits" over last year's levels, says Chris Gabaldon, the
chain's chief marketing officer.
Some groups
are booking events during off-peak times, he says, which suggests
they're trying to make their dollars stretch further -- or, better for
hotels, seeking to secure events further in advance.
And
while companies had been booking smaller meetings instead of the
splashy, high-profile national meetings before the recession, Gabaldon
says, they're starting to enter a cycle in which the bigger meetings
that are booked further in advance are starting to return.
The
overall state of travel at Ritz-Carlton will not reach levels seen in
the peak year of 2007, he says, but "next year, we will be really
close." Early next year, the chain is on track to reach its revenue per
available room rates seen in 2007.
LEISURE IS MOST STABLE
Luxury-travel agency network Virtuoso, which covers about 340 agencies in 20 countries, specializes primariy in leisure travel.
It
says its agents are booking 51% more business this year than 2009.
Broken down by category, hotel bookings jumped the most (82%), followed
by rental cars (70%), airlines (68%), tours and on-site arrangements
(51% apiece) and, finally, cruises (30%).
Ritz-Carlton's
experience is the same. "The strongest segment by far has been
leisure," Gabaldon says. "The consumer is buying more premium rooms
every year over the previous year.
This year,
they'll buy more club rooms and suites vs. last year, and more
ocean-view rooms at a higher rate than last year in season.
"One thing they haven't been willing to give up on was a family-oriented vacation," he says.
For
New Year's Eve 2013, Virtuoso-affiliated travel agent Meg North of
Brownell Travel says she's researching options for a client who
requested unique experiences.
Among the
options she's come up with: a St. Petersburg, Russia, trip to attend the
Czar's Ball, a trip to Australia to ring in the new year at the newly
redone Park Hyatt Sydney or a stay at the InterContinental Hong Kong
overlooking colorful Kowloon Harbor.
MONEY IS NO OBJECT
Shelby
Donley, who bought an existing travel agency in 2008, says her business
has grown thanks to customers who will spend $20,000 to $50,000 on a
week's vacation.
Some customers, however, have
been blinking at hotel prices in European capitals, where $1,000 a
night may buy only an entry-level room during peak season, she says.
"Rates
have grown so much, so fast. It's the one thing that the American
market's having a hard time adjusting to," says Donley, owner of
Phoenix-based Camelback Odyssey Travel.
Kimberly
Wilson Wetty of another high-end service, Valerie Wilson Travel,
recently arranged a week-long family trip for 18 people to the Casa de
Campo resort in the Dominican Republic. With flights, several villas, a
private chef, private golf lessons and an excursion with an amazing
catamaran, she says the family spent $500,000.
Of course, there's ultrawealthy -- and then just the merely wealthy.
"The
ultrawealthy never stopped traveling," Wetty says. "The ones who spent
maybe $15,000 to $20,000 on a week's vacation? They are back."
But money can be a concern for the merely wealthy.
One
indication: Last month, luxury-tour operator Abercrombie & Kent
launched a division, Connections by Abercrombie & Kent, that will
sell exotic tours at around 30% less than its 50-year-old parent.
USA Today