The impact of the pandemic on luxury travel trends driven according to UHNW travel clients
As the new chief executive officer of Relevance, I have worked in the high-value marketing industry for almost a decade and am always fascinated by the trends of our high net worth indivual (HNWI), ultra high net worth individual (UHNWI) and billionaire target audiences. Throughout my career, there has been no time more volatile or unexpected than the Covid-19 pandemic, and it has been captivating to see how travel demands from wealthy clientele have changed, and how businesses have adapted to meet these requirements.
Below, I have pooled data from a few of our clients at Relevance, as well as some external businesses in the luxury tourism industry, to show how UHNWI travel trends have adapted during the recent health crisis, and consider whether these changes are here to stay.
Relevance on the changing trends in the luxury travel sector and how that may impact your UHNW business
Bookings for certain types of holidays rocketed despite restrictions
It is true that some businesses in the luxury tourism industry, such as five-star hotels, experienced a decrease in bookings from 2019 to 2020, mainly due to concerns over being in close proximity to others, and restrictions meaning many people were unable to travel outside of their country.
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However, just because the world’s UHNWIs weren't able to travel as far didn’t mean that their appetite for holidays decreased. In fact, the global lockdown only meant that when restrictions slightly eased, HNWIs and UHNWIs were hungrier than ever for a vacation experience, with some delighting in the opportunity to explore more local destinations.
What’s more, with finances not an issue for high-wealth families, many were comfortable with booking a holiday as normal on the off-chance they could go, as shown by insight from global travel network Virtuoso.
This perhaps explains why our client St Tropez House – a luxury villa rental agency – noticed a 28% growth in rentals from 2019 to 2020, predominantly from more local clients, despite Covid-19 meaning that holiday rental was impossible for a large portion of the year. This is also likely thanks to the type of escapes that the pandemic saw affluent individuals favor: demand tended to be focused around private buy-outs of large villas or boutique hotels, where a family bubble could stay without risk of running into anyone else.
Length of holidays increased
Since going on holiday was no longer as simple as hopping on a plane at a whim, when the world’s wealthiest did manage to secure a viable holiday they were in no rush to go home afterwards.
For example, the average length of stay at St Tropez House’s rental properties nearly doubled from typical pre-Covid lengths. In 2019, the average stay was two weeks, while in 2020 the average stay was 3.5 weeks. St Tropez House also witnessed a new phenomenon: clients who had already booked extending their stay, either pre-holiday or while actually on the vacation, on average increasing their holiday length by 25%.
Guests that chartered with one of yachting clients – Yachtzoo – also had a preference for longer periods of time onboard compared to 2019, with the majority of charter inquiries being for periods of 10 or 14 days and longer in 2020. Yachtzoo also saw a similar increase in people trying to extend their charter while already onboard, and owners who decided to spend longer onboard than planned when they were able to reach their yacht.
This correlates with information from Virtuoso, which found that HNW holidayers booked shorter stays for ‘working vacations’, where at least one person is working from their holiday home, but extended their bookings as restrictions changed and they perhaps realized there was no need to return to the office.
Holiday contracts became more flexible
Another luxury travel trend from the pandemic was a change in the cancelation clauses of many luxury travel businesses, driven by necessity in such uncertain times.
Many companies felt pressure to modify their contracts to allow clients to rebook or cancel their holidays as needed in the light of the pandemic; Yachtzoo and nearly all of our yacht broker clients had to work quickly to add an addendum into their charter contracts to accommodate for cancelations, and both St Tropez House and another of our luxury villa rental clients – Cap Villas – updated their policies on cancelation. An investigation by Elite Traveller shows that this trend wasn’t exclusive to the top of the market either: the majority of luxury hotel groups also updated their cancelation rules during the pandemic.
Covid-19 unsurprisingly caused a sharp increase in cancelations, with St Tropez House seeing figures rise from one in 10 in 2019 to three in 10 last year. Out of these, 70% of the bookings were simply moved to 2021, when people assumed restrictions would be reduced if not removed. A further interesting point to note was that the vast majority of cancelations came from the UK, where there has been a lot of confusion surrounding the legislation regarding travel, isolation periods, and testing for individuals going overseas and returning home.
Meanwhile, Yachtzoo estimates that roughly 90% of its yacht charter bookings were simply moved to future dates because their clients still wanted to travel, they just couldn’t at the time.
Private jets became the norm
One of the biggest shifts we saw working with our clients was the rise of methods of travel that offered greater privacy and safety, from private cars for overland journeys from your home to your destination (let’s remember that the south of France and Croatia – both holiday hotspots for HNWIs – are both accessible by road for most HNWIs residing in Europe) to private jets.
As UHWIs searched for the safest possible way of traveling, private jets and helicopter transfers became the method of choice, allowing individuals and groups to travel safely in their bubble and avoid coming into contact with others.
Some 35% of St Tropez House clients arrived at their villas by private jet during Covid times – a significant increase from 15% in 2019. Yachtzoo also noted an increase of private jet arrivals and cars that drove to the port to meet the yacht, ensuring UHNWIs the least possible contact with the outside world. One charter agent noted that none of their clients arrived by anything but jet or car throughout the 2020 summer season.
This correlates with data from private jet firm VistaJet, which charters jets to its members, and reported that July 2020 saw a 320% increase in new memberships compared to July 2019.
Priorities included bigger spaces and on-site services
Understandably, UHNWIs were looking for different things out of their holiday during the pandemic. Gone were the demands for sightseeing opportunities and nightlife, and instead things like privacy took precedence.
Yachtzoo reported that yacht charter clients mainly stayed onboard for the duration of their charter, not wishing to take advantage of whatever shoreside amenities may have been open, and that the groups of people who were chartering were typically families and close friends.
Usually there would be a much bigger variety with groups, but in 2020 people pretty much only traveled with their bubble or close-knit friends and family.
When looking for rental properties in 2020, both Cap Villas and St Tropez House’s UHNW clients prioritized greater privacy and larger spaces to allow guests to effectively ‘quarantine’ in their home-away-from-home. This stands in contrast to previous years, where the priorities for guests inquiring with St Tropez House and Cap Villas included close proximity to the town center, restaurants and boutiques.
With the majority of holiday time being spent in villa grounds, Cap Villas and St Tropez House also saw new and greater demands for online shopping and services like private chefs.
What does the future of UHNWI travel look like?
While there is of course an eagerness to return to pre-Covid traveling, we must accept some effects of the pandemic will likely be here for years to come. For example, Globetrender’s Elite Travel Trends forecast for 2021 predicts the continued popularity of private buy-outs of hotels, villas, castles and islands; helicopter and private jet travel; and home-to-home holidays, with UHNWIs opting to base themselves in spacious residences for extended periods to avoid any potential travel complications. While we can certainly imagine a future where the pandemic will not impact luxury travel trends, it seems likely that for the next five years at least priorities driven by the pandemic will stay in place.
However, things will not stay exactly the same, with concern for ongoing restrictions balanced by desires to live life to the fullest as many countries emerge from long and grueling periods of lockdown.
Globetrender predicts that ulta-itineraries – holiday plans that enrich the mind, body and soul and seize the day – will form a large part of the luxury tourism industry in 2021, as travelers may have spent a lot of time during lockdown in periods of self-reflection and discovery. The report also forecasts an even deeper dive into UHNWI holiday personalization in 2021: UHNWI travel brand Brown + Hudson now requests clients to take an online assessment devised by travel-focused psychologists to better understand why they are traveling and what they want to get out of the experience, and ultra-luxury home rental provider The Ultima Collection also sends out detailed preference sheets in advance of guests’ stays. Of course, preference sheets have been a mainstay of the yachting world for many years.
So, although the UHNWI travel trends we have seen during the pandemic are likely to continue into 2021, priorities will surely grow to include more exciting adventures and out-of-this-world activities, with these experiences gradually being put back on the table.
What’s more, I predict that while some affluent individuals will stick to longer escapes, some will be keen to revert back to multiple short vacations to fit in with their increasingly busy lives.
Luxury marketers can meet this gradually changing demand by ensuring that they truly understand the different segments of their audience and what it is that these UHNWIs are looking for. As everyone emerges from the pandemic with different ideas of what their perfect holiday is, all brands need to keep a close watch over their inquiries and the chatter in their industry, and ensure their offering is flexible enough to suit their clients’ changing needs – whether that’s a summer-long private villa stay complete with its own helipad, or breathtaking experiences packed into three-day weekends for those whose lives are already back to full capacity.
To discuss how luxury travel trends may impact your UHNWI business, get in touch today.
Ned Quekett, CEO at Relevance.
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Relevance is a strategic and creative digital agency specialised in profiling and targeting Ultra-High-Net-Worth Individuals for the world's most exclusive brands and companies.Find out more