Betting big on luxury travel.
This month, Hyatt made a $2.7 billion bet on post-pandemic luxury travel. With the acquisition of Apple Leisure Group, the company will double its global resorts footprint and make it the largest operator of luxury hotels in Mexico and the Caribbean, as well as expand its presence into 11 new European markets.
However, as countries head back into lockdown due to the Delta Variant, it is getting harder to imagine what travel will look like in the next few months. So why are experts so bullish on luxury travel?
For starters, the pandemic created an excess of personal savings — especially among the wealthy. As restrictions ease, it is expected that they will use this money to not only go on vacation, but to splurge on their trips. In a recent survey, 57% of respondents said that they are willing to spend more on a “once-in-a-lifetime” vacation than they were before the pandemic.
Many travelers are also cashing in an excess of points, credits, and vouchers to secure their bookings, giving them the opportunity to upgrade their plans without needing to open their wallets.
These factors — as well as a desire to make the most out of their time away from home — are also contributing to travelers taking longer trips than they may have before. For example, the average length of stay at luxury St. Tropez House’s properties went from two weeks in 2019 to 3.5 weeks in 2020. The agency also saw a new trend of clients extending their stay while already on vacation.
The luxury industry itself is also expanding, which is also feeding the demand.
Take, for example, RVs. The sales of these vehicles skyrocketed in 2020 as travelers looked for socially distanced ways to vacation. But these aren’t your grandparents’ Winnebagos, they are a four-star experience on wheels. A new model was just launched that boasts such amenities as a private theater with a 70-inch television, a rain shower in the spa-style bathroom, and solar panels, all for a starting price of $249,995. I think it is safe to say that higher end RV parks and motor-friendly destinations will soon follow.
In another nod to nostalgia, OceanSky Cruises has recently announced a leisurely airship trip to the North Pole that starts at roughly $230,000 per couple. While the airship has seen limited action since the 1930’s, recent advancements have been made to bring “the world’s largest aircraft” into the 21st century. OceanSky is planning to expand its operation to include regular flights to other destinations — giving passengers the ability to experience this adventurous form of travel in extreme comfort.
While the Delta Variant will certainly have an impact on traveling for the coming weeks and months, I am excited to see what the luxury industry is planning for the future. Particularly if it continues to open new frontiers for travelers.
Danilo Diazgranados is an investor, collector, and lover of fine wines and a member of the prestigious Confrérie des Chevaliers du Tastevin, a fraternity of Burgundy wine enthusiasts.