What to Know
- Well-heeled travelers seem to be more optimistic about when they’ll be able to fly and cruise than the average vacationer, industry observers say.
- Cruise lines, hotels and guided vacation companies are pivoting to court luxury business and meet new pandemic-era wants and needs.
- People are interested in traveling in “pods” of family and like-minded friends to ensure safety.
Millions of Americans have altered their travel plans amid the pandemic, with some switching to road trips this summer and others postponing long-haul air and sea travel till next year or beyond.
But one demographic — the affluent vacationer — appears to be more optimistic, making plans and holding onto reservations made pre-coronavirus. Industry experts see this resilience among luxury travelers as an encouraging sign a rebound might be just around the corner. How the wealthy are traveling, however, is evolving, too.
"Affluent travelers tend to be a little more comfortable with the wait-and-see scenario," said Misty Belles, managing director at Virtuoso, a global network of 1,100 travel agencies and more than 22,000 travel advisors specializing in luxury and experiential travel.
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"Because they’re well-versed at travel and it’s such an ingrained part of their lifestyle, our clients are really more in that sit-and-wait camp — especially if there’s no financial penalty for them to do so."
Jon Grutzner, president of Insight Vacations and Luxury Gold— two high-end guided vacation brands owned by Cypress, California-based The Travel Corporation — said he’s heard Virtuoso CEO Matthew Upchurch refer to luxury travel advisors as "the canary in the coal mine" regarding travel recovery. "We’re seeing that that really is the case," he said. "Their clients are the first guests who are coming back and feeling more comfortable with travel."
Belles said Virtuoso has polled affluent travelers and found that 39% were ready to travel within three months, and 66% were ready to immediately board an airplane.
For his part, Grutzner says Insight and Luxury Gold currently enjoy an 80% "save rate" on customer bookings.
That means 8 out of every 10 customers are either keeping their reservations as is, rebooking for a later date or taking a future travel credit — rather than canceling outright for a refund. (The two brands have dropped tour departures through November but do plan to run Christmas market trips to Europe, said Grutzner.) "That’s a good sign for us and for travel, that travelers are feeling comfortable in continuing to keep those reservations," he said.
While 2020 "was pretty much a wash" for Insight and Luxury Gold, bookings for 2021 are strong. "It definitely far outpaces what we’ve done in previous years," Grutzner said. "People are coming back and we are starting to see a light at the end of the tunnel."
Pent-up demand among luxury customers is leading them to book heavily for the first through third quarters of next year, and even into 2022, he added — despite a rise of about 12% in prices of late.
Meanwhile, certified travel counselor Anne Scully, president of McCabe World Travel in McLean, Virginia, said her agency booked a respectively healthy $1.6 million in trips in June. The agency normally does $60 million per year.
Where are they headed?
Those well-off vacationers staying in the U.S. are booking places with flat or dropping infection rates, said Belles. "Places that have low [COVID-19] numbers, lots of wide open space and and good testing facilities seem to be where people are gravitating," she observed. "A couple of our hotels in Maine are almost completely 100% committed through the rest of the summer."
Scully has been booking mountain resorts like the St. Regis in Aspen, Colorado, and Montage Deer Valley in Park City, Utah, for well-heeled families. "Ski resorts are extraordinary summer destinations," she said. "You’ve got that beautiful fresh air out there, and you can social distance very easily at properties like that." Luxury RV self-drives, some with butler service, are also selling, she added.
While affluent travelers did shift to more domestic bookings early in the pandemic, they’re now starting to reserve trips abroad — even though border restrictions between the U.S. and many popular destinations, including Canada, most of the European Union and even the Bahamas, are still in effect. Nonetheless, Grutzner said he saw a shift from domestic to abroad in bookings starting in early July.
Scully just rebooked a client who’d canceled a summer private charter to Europe on a Venice Simplon-Orient-Express rail journey across the Continent this October, book-ended with stays at the Belmond Hotel Cipriani in Venice and Claridge’s in London. "Now, fingers crossed that things will open up," she said. "We did negotiate with our partners saying, ‘look, if they’re not allowed in as Americans, what kind of penalties will there be?’
"You’ve got to protect your clients," she added. "Relationships matter in creating trips right now."
Sea and river cruises are also selling at McCabe World Travel, despite the Centers for Disease Control and Prevention extending its No Sail Order for ships carrying at least 250 passengers in U.S. waters through Sept. 30. Scully thinks cruise lines might come out even stronger post-pandemic. "Remember, they were dealing with the Norwalk virus for years, and lived through it,: she said. "They literally have doctors and health facilities on board."
Virtuoso agencies are reporting jumps of 30% in river cruises and 4% in general cruises for January, said Belles, adding that "cruisers are just incredibly loyal."
Travelers feel comfortable taking such planning risks because cruise lines, hotels, guided vacation companies and other travel providers have in fact loosened restrictions and cancellation policies, according to Belles at Virtuoso. "And as long as those cancellation policies stay lax, and I think they will continue throughout 2020 to be that way, there’s no need cancel right now," she said.
For example, Insight and Luxury Gold, along with other The Travel Corporation companies, are reducing trip deposits to $99, allowing changes of dates and destinations across brands, and instituting a Peace of Mind promise to calm traveler nerves. They’re also fine-tuning product to meet pandemic-era needs, introducing wellness directors charged with ensuring hygiene on escorted trips and a Small Private Group Option version of standard tour departures.
"With groups of as small as 12, we can take our current departure dates and for a surcharge make them a small, private group option for them," said Grutzner. "We’re seeing guests wanting the comfort of traveling with, first of all, like-minded people and then, second, having more of these intimate experiences that you get with a guided vacation versus doing it on your own.
"We are listening to our travel partners, specifically the travel advisors, whom we recommend our guests book through," he added. "And they say the demand is is being able to travel with your friends and extended family."
Who are they traveling with?
Indeed, in its polling, Virtuoso found 76% of affluent travelers would consider a so-called vacation pod to enable and/or ease travel faster. A “pod” can be a group of healthy relatives or friends traveling together and sharing quarters to limit exposure to pathogens.
"There is a strong desire to be with others," said Belles. "So traveling with another family, whether it’s relatives or a similar family who have been social distancing in the same way, allows for a more social vacation experience."
Pods or no pods, affluent travelers are also snapping up charters on yachts and private jets, she added. "We’re seeing an uptick in exclusive use," Belles said. "People are even taking over small boutique hotels."
Villas and private homes, even more so than hotels, are also prime accommodations option, said Scully at McCabe. She herself couldn’t get the Spring Lake, New Jersey, home she and her sister like to stay in with their families because it was booked solid as of early summer.
Belles says wealthier vacationers have been booking short stays at stand-alone properties, villas tied to resorts and larger hotel suites for working vacations with their families and then "extending and extending and extending" as pandemic lockdowns wax and wane.
"They’re planning to go for a week and then they realize there’s no need to rush back to their residence," she said.
This story first appeared on CNBC.com. More from CNBC: