Luxury holidays: Premium travel for the masses

The reality, however, could be quite different. A middle-income couple who have three kids, read the Sunday Mirror and have saved up all year to afford a fortnight in the Maldives may spend the same amount - or more.

Alternatively, a premium traveller might be a young professional on a dog-sledding adventure holiday in the Antarctic; or an elderly couple on a Mediterranean cruise. They may be looking for luxury or simply for experience; have booked with an upmarket travel brand or done all their research on the internet and flown with a budget airline to their destination.

A study of the premium travel market by media planning and buying agency Red Media, exclusively published by Marketing, shows that not only is the number of consumers prepared to splash out on expensive holidays fast expanding, but their range is becoming more diverse.

To find out how travel companies can establish brands and concepts to attract these consumers, Red's research defined premium travellers by their attitudes, rather than simply age or social status. It identified five 'clusters' of premium traveller: discrete elite, destination dazzlers, top-notch tourers, confident culturalists and passive passengers.

However, the study also shows that premium travel is no longer the domain of the privileged few. 'All of these clusters are spending the same amount of money, but the massive difference is their attitude to travel,' says Shifra Cook, client services director at Red.

The study defined premium travellers as people who spent more than £800 on travel and accommodation for each week of the longest holiday they had taken in the past 12 months. Those who spent £500 on a shorter break of four nights or fewer were also included. The former is a burgeoning category, according to ACNielsen TravelTrack,with the £800-plus bracket showing a 9% year-on-year increase, compared with a 1% increase for the market as a whole.

These high spenders are most likely to be 35- to 54-year-olds, with two-thirds of those surveyed falling into this age group; 21% are over 55 and 16% are under 34. Of these premium travellers, 85% travel as a couple, but women play a more dominant role in booking and organising holidays (62%).

Many premium travellers are high earners, but Red found the range of incomes was far greater than expected (see table). The majority (39%) had a household income of £30,000-£50,000 and there was a marked bias in premium travellers toward the AB social classes. Those who had lower household incomes below £30,000 were likely to be among those over 55.

Age, class and income do not tell the whole story. Red also asked consumers whether they agreed or disagreed with a variety of attitudinal statements, which included 'I choose holidays that will offer me a different experience' and 'People are always impressed with the places I have visited'.

Travellers were also asked to describe their preferred trip from a list of adjectives. From the responses, Red identified two main categories of traveller: one whose primary objective was luxury, and the other culture.

This was in addition to the five more specific clusters, above. Of these, two were identified as luxury; one as culture; one sat across both categories; and the final one in neither.

Group dynamics

By targeting one or more of these clusters, Red Media believes travel companies can establish brands that will interest a particular group or, possibly, more than one. A cultural holiday, for example, might appeal to both the top-notch tourers and confident culturalists. The study found these groups could best be reached through The Sunday Times, The Mail on Sunday, Lastminute.com and National Geographic Travel magazine.

Apart from finding the right media mix to target these clusters, the research indicates several other ways in which brands can improve their communications performance. One factor to emerge is that a number of premium travellers do not take only one big holiday a year, but three or four, and not usually with the same travel brand.

'Generally, tour operators target people for their one big holiday,' says Cook. 'But once they get these people, they don't necessarily target them again with different types of break.'

This points to an opportunity for travel brands to exploit customer relationship management and direct marketing strategies further, in order to persuade high-spenders to consider them for different kinds of holiday; an autumn city break as well as a summer beach holiday, for example.

Brands with a prominent web presence are also well-placed to tap into the habits of premium travellers. The internet was the third-most popular source of travel information for respondents (see table), and 85% had internet access at home. Of these, 53% had booked a holiday online. Some of the most popular websites for travel information included Expedia, Thomas Cook, Google and British Airways, but many people choose to book direct with travel agents or airlines on the web.

When it comes to brand awareness in premium travel, it seems brands could be doing far more to differentiate themselves. Red's Cook says one of the most interesting findings was the lack of brand awareness of tour operators. 'People see the "brand" as the hotel, or the destination,' says Cook. 'Unprompted awareness of brands in this sector was very low.'

When respondents were prompted as to brand awareness, some brands stood out (see table). Almost 75% were aware of resort group Sandals, and more than half recognised upmarket cruise line Cunard, hotel group Four Seasons and tour operator Kuoni. Cruise line Ocean Village, which launched in May 2003, had an awareness level of more than a third. These brands also recorded high levels of advertising awareness.

Finally, Red uncovered some insights to the reasons for picking specific brands by asking respondents to consider a series of statements about brands (see graph below) It found that three main factors influence premium travellers: value, trust and quality. While they may be prepared to spend a lot, value remains important: 80% stated that they prefer holidays that offer good value for money, and 81% said they choose travel brands that are good value. Being a 'fashionable' brand is not necessarily a factor, with 40% saying that this was not important.

So, brands that are able to tap into these values, aim their communication at a well-defined group and differentiate their offering strongly are the ones that look set to reap the rewards in this fast-expanding market.

BREAKDOWN

Premium Travel Clusters

Discrete Elite Falling firmly into the 'luxury' category, this group comprises educated high earners, who holiday for themselves, rather than to impress. Typically they are 45 to 54 years old.

Destination Dazzlers Desperate to impress with where they have been.

More likely to have children, they fall into lower socio-economic groups (26% are C2) and earn £30,000-£70,000.

Top-notch Tourers Falling into the luxury and culture categories, they are usually older, wealthier and take organised tours for cultural reasons.

They are also more likely to take a UK break.

Confident Culturalists Seeking a cultural experience, they are independent and price savvy. Luxury is not their goal. They are urban dwellers, likely to be university-educated and tend to be childless.

Passive Passengers High spenders on holidays. Their primary reason for taking a break is to spend time with family or friends. Likely to have young children and fall into the C2 socio-economic group, they are big users of the internet to research holidays.

Source: Red Media.