December, 2014 – This article from Travel Market Report discusses the takeaways for travel agents from the latest survey from the American Affluence Research Center. (http://www.travelmarketreport.com/content/publiccontent.aspx?pageid=1365&articleID=12041&LP=1)
By Harvey Chipkin
Agents who have affluent clients – or would like to attract them – should take advantage of the wealthy’s positive outlook on travel, according to the latest survey from the American Affluence Research Center (AARC).
The organization focuses on those with a net worth of a minimum of $800,000 per household. This group is in the highest 10% of the country in terms of annual income.
These consumers account for nearly half of all consumer spending. Households that responded to the survey have an average annual income of $284,000 and an average net worth of $3.1 million.
Ron Kurtz, AARC president, said the survey has these important takeaways for travel agents.
The affluent are confident; you should be too
The affluent are upbeat about the economy and feeling more comfortable in their spending.
Although the latest survey was taken in September/October at a time of extreme stock market volatility and international crises, the affluent were positive about the economy and expected their net worth to be higher in September 2015, a positive factor for increased spending.
Good news for agents
Respondents plan to spend more on both domestic and international travel; in fact, the outlook for international travel is even more positive than for domestic travel, an encouraging sign for travel agents.
Pay no attention to the media’s portrayal of spending. “The affluent are different,” said Kurtz,“and they spend differently.”
The majority of millionaires are careful shoppers who look for good quality and value, live within their means, are aggressive savers, and have limited experience with true luxury retailers and brands, according to Kurtz.
The last characteristic is of particular interest to agents, he said.
“Many of these people are self-made and are not familiar with the value of a luxury product; it is up to agents to educate them on that,” said Kurtz.
Not all consumption is conspicuous
Kurtz said it’s also best to ignore the media’s focus on conspicuous consumption.
”Celebrities and others who spend conspicuously are a different breed and represent a very small group,” he said.
“Always go back to the millionaire next door for a better representation of the affluent.”
It’s important for agents to develop and understand the general mood of the affluent and their expectations.
“Traditionally, agents thought of themselves as guides to a better bargain,” Kurtz said.
“For this market, the better service would be to help them find good quality and good values,” he added.
“The affluent won’t turn their back on a discount, but more important to them is to spend smartly and that represents great upgrade opportunities.”
Know your clients
Different segments call for different approaches, Kurtz advised.
“The older affluent already have the material goods they want or need and will tend to spend more on travel,” he said.
Marketing and sales plans should be based on the future intentions of the affluent, not on what they may have done in the past, according to Kurtz.
“You have to consider what people will be doing in the future,” he added.
“If their outlook is getting more positive, that should be a factor in the agent’s sales and marketing plans.”