luxury
Now’s the time to better
your luxury product
It’s not a good time to be a tourist. Is this the message one wants to send out,
especially to the detail-oriented, high-spending, luxury traveller? Budget all you
want but don’t short-change this market.
I
f you were to dine at the At-
lantis, on The Palm Jumeirah,
surely you would notice, and
not in a good way, if they de-
cided to scrimp on the beef, ex-
changing their staple Wagyu (es-
pecially bred for the resort) for
cheaper cuts, even if they were to
take some fils off the final bill.
Or if I were a guest in India’s
Umaid Bhawan (a royal palace
partially converted into a hotel,
with the erstwhile ruler still in
residence in another wing on the
property), I would hardly take
kindly to my butler not being able
to see to my tea because he is look-
ing after another guest. Would he
keep the Maharaja waiting, I would
wonder.
Experts tell us that “absolute
luxury” is recession proof. Not ac-
cessible luxury, or commoditised
luxury. But the luxury market
that is tested this year on private
jets worth $1.4 million or a £50m
($74.6m) mansion in London’s
Highgate, a $2.5m King’s Button
iPhone 3G or the one-off Vertu
Boucheron 150. After all, only the
Rolls-Royce, the Maharaja of its
field, showed a profit in 2008, with
sales up by 20 per cent. Relatively
cheaper BMW posted its first an-
nual decline in sales for 15 years.
And Market Metrix Hospitality
Index, a United States-based re-
search house, told us in the midst
of the crisis last year that only
luxury hotel guests indicate a will-
ingness to accept larger rate hikes
compared to a year earlier.
Yet, one of the first lessons of
recession was cash conservation.
Every individual, corporate entity
or small business decided, wisely,
that the best way to stay afloat in
this market is to not let go of what
you already have. Budgets are all
viewpoint
shalini seth
important. True, but is luxury a
non-essential?
Trends in the US, where this all
started, do not seem to suggest so.
In fact, in 2007, when the dollar
first started to lose ground against
other currencies, domestic travel
spiked. In a survey, some 89 per
cent of luxury consumers reported
some degree of luxury travel State-
side in the fourth quarter of 2007,
the highest seen through 2006 and
2007.
It would seem that while being
penny-wise makes sense for most
people, it is a questionable strat-
egy when dealing with the trav-
eller who practices saying “keep
the change” in more languages
than one. Even when the World
Travel and Tourism Council tells
us the recession has reduced
the number of travellers
in most countries. And
especially when
forecasts for the
coming year
include projec-
tions that say
that there will
be fewer trav-
ellers than last
year or the year before that.
Hotels in the United Kingdom
braved the downturn by adding
value to what the pound can buy.
Five-star hotels such as Glenea-
gles, in Perthshire, did not stop
charging £190 per night for a
room, but threw in a free lunch at
their restaurants. The luxury Old
Course Hotel in St Andrews began
offering free golf with some of its
room rates. The travellers were in-
deed fewer than before but hotels
discovered that while companies
had stopped sending executives
on business trips to five star hotels
and the number of conferences
had gone down, luxury travellers
were still trickling in. Closer home,
in Egypt, which has had a tourism
industry before airplanes were
invented, the word from the min-
istry is not to cut costs but to add
value – since it’s difficult to bring
the prices back to the older levels
once the crisis is past.
The key lies in differentiation.
The ‘one size fits all’ strategy is not
sound marketing for the affluent
sector, which has become far more
diverse and stratified than it ever
was. What that translates into is
personalisation, possible today in
small doses of boutique properties
and little luxuries.
Besides, when market share is
more important than ever, can the
tourism industry afford to lose its
best clients? The luxury market,
more than any other, thrives on
referrals and loyalty. True luxury
is about detail and those ‘one and
only’ moments. Celebrities and
movie stars continue to haunt fa-
vourite bistros and roadside kebab
joints long after they have crossed
over to the other side.
Or take responsible tourism, led
by the über-rich brigade of Hol-
lywood A-listers. The discerning
tourist wants to be able to pay to
not leave an ecological footprint
when holidaying. One wants some-
one to ensure there are two bins
in each room for dry and wet gar-
bage, that the service staff is not
slave labour, or the anthurium
bouquets in the rooms have been
locally procured.
When deciding how to deploy
resources wisely, spare a thought
to ensuring that the extra gener-
ated by lower guest rates is passed
on to the traveller who counts. The
one who, despite the downturn,
has made the journey.
After all, you wouldn’t want to
keep the Maharaja waiting. |
Shalini Seth was founding editor
of Millionaire magazine Middle
East. She is now a commentator on
luxury and travel trends
Travelling in luxury can
never go out of fashion
| 57