When budget airlines and shared accommodation apps burst onto the travel scene, they caused a minor revolution. Travel was no longer relegated to the affluent or the time-wealthy anymore. Travel was for everyone.
People who had never thought of themselves as travelers were suddenly able to catch a weekend plane and explore a different destination every month. Travel became democratized, and a wild and wonderful period of ever-lowering prices and travel comforts followed. Why stop at a $100 plane ticket, people asked, when you could get an overnight bus to your destination for $30? Travel had never been so accessible. Or so uncomfortable.
A New Reason to Travel
However, the lowering of prices for travel hasn’t resulted in a true race to the bottom. Travel spending on average continues to go up year-on-year, with a 2015 survey from TripAdvisor revealing how 1 in 3 travelers planned to spend more on travel in the next year than they had in the year previous. The reason? The lowering of barrier-to-entry for travel led to changes in travel spending for everyone–not just those who hadn’t done much of it before.
Travel quickly began to be seen not as a luxury for the select few, but a necessity for a well-balanced life. In 2015, TripBarometer found that 49% of travelers who planned to spend more on travel that year said they would do so because “I or my family deserve it” while 31% said they would spend more on travel because “it’s important for my health and well-being.”
A New Way to Travel
The second trend that emerged was that the lowered barrier to entry for just about every kind of travel made it incredibly simple to try something totally different from previous vacations. A new concept of traveling emerged: traveling for experiences began to overlap with, and in some cases overtake, traveling for relaxation. A trip became less formulaic, more about a selection of personalized elements rather than a one-size-fits-all “vacation.” The experience economy came into full bloom, with 69 percent of global travelers–of all age groups–planning to try something new in 2016.
And so for many travelers, the lowering of costs for travel across the board did not lead to the question of “how cheaply can I make this trip to a familiar location?” but rather “where can I save so I can spend more on the experience that I want and deserve?”
A New Way to Spend on Travel
Travel today has become truly modular–travelers are able to build exactly the kind of vacation they want, saving and splurging exactly where they want to, for that particular vacation. A traveler truly can choose to catch a sale sticker priced plane ticket and then splurge on a two-bedroom luxury suite in San Francisco. People have the ability to choose how exactly they are going to treat themselves on their travels.
In fact, there are five things that travelers tend to be willing to spend more on a given trip: sightseeing, dining experiences, accommodation, activities, and shopping. The data indicate that travelers are not splurging on the same thing every time, but rather picking and choosing the kind of vacation they want to have at that particular moment.
A New Wave of Luxury Travel
And that’s why, even as budget airlines continue to compete for prices, luxury travel providers are seeing their own renaissance. Research shows that the luxury travel industry is projected to grow almost a third faster than the overall travel industry (Amadeus, 2016).
Services that are able to provide highly tailored or truly unique experiences – such as Suiteness, which provides exclusive access to member-priced luxury suites along with concierge service, family and group bookings – are seeing increased popularity from people who have the newfound ability and interest to discover the heights of comfort. Suiteness has grown rapidly and internationally since its launch in 2015, and today sees a new member sign up every 3 minutes. According to CEO Robbie Bhathal, Suiteness is targeting young families and “people with higher disposable income, or those who would rather spend an extra $120 a night to get something where you can be all together and comfortable.” And they’re not alone: a study by Bain & Company found that in 2015, spending on luxury hospitality grew 7%, making it the fastest-growing category in the entire luxury industry (Resonance, 2016).
This is the era of “build your own adventure” travel, and anything is possible. What kind of travel experience will you treat yourself to next?