Manfred Abraham, CEO
Last year nine million people in the UK paid over £10,000 for their holiday. Close to half a million spent at least £30,000. Travellers in the US are doing the same. This surge in disposable spending for travel, combined with a practice to find work-life balance, means the consumer luxury market is growing … and being redefined.
Learning how to connect with a New Guest
Growth is proving problematic for luxury travel brands.
Traditionally there were two types of travellers in the luxury space.
- “Best ofs” – Travelers expecting the absolute best of everything
- “Exclusives” – Travelers for whom luxury is a backdrop to an immersive, one-of-a-kind experience
Happily, for the majority of upscale and luxury hotel brands, these two segments were largely complimentary and catering to their needs created economies of scale in both operations and marketing.
However, a new breed of customer is throwing the status quo out of whack. And for most it is too large a segment to ignore.
Introducing the “Aspirational investor”
These travellers are fast becoming one of the largest spenders in luxury travel, as they see the experience and time as an investment in their life, I & EQ, and personal brand.
They make significant savings in other areas of their life in order to afford a luxury experience when it comes to their down time. In the past they might have been one-off customers; honeymooners or special occasioners, but today they are among the largest repeat customers for many organisations. And they tend to be brand loyal.
But they are not simply an extension of the original travellers most brands are comfortable attracting and managing. The Aspirational’s psychological needs are more complex.
Travel as the gateway to BVOM
(Challenging the definition of Luxury for the new traveller)
The Aspirational is fundamentally invested in accumulating travel memories drawn from transformative moments that resonate deeply with their ideal of personal fulfilment and ‘being the best version of me’ (BVOM).
This higher order motivation means brands have to think beyond differentiators such as thread-count or pool / spa amenities. *Gasp* The role of food has changed as well. Food & beverage has long played a key role in luxury travel and yet many top-drawer operators served homogeneous, but high-end menus with very little local ‘flavour’. The reverse is now true.
Reflecting this trend is the move made by the eponymous Michelin Guide to hand out its coveted stars to Singaporean street hawkers or Hong Kong cafes. Epicureans can now get a Michelin-starred meal for less than a bottle of plonk. The thought of an $800 per night guest actively seeking out a $5 noodle broth was once laughable, today it’s the norm.
Consequently, creating awareness and engaging this audience is more difficult to achieve via ‘incremental’ efforts to existing strategies and marketing tactics. The way brands define an authentic strategy to deliver on BVOM must be redefined, because the underlying concept of Luxury is more subjective than ever. The conventional signs and signifiers of luxury and quality (such as the sheet thread count, or sitting at the front of the plane) have changed. The new guest is far more subjective in their interpretation, meaning the ‘luxury’ customer is more diverse than ever before. And younger. Research shows that Millennials and Generation Z will account for 45% of the market by 2025, in contrast to a majority comprised by 50+ today.
Sharing not Showing. A measure of how much the story matters
The shift in the traveller’s age and underlying motivation(s) means that brands need to reassess how they connect.
In the past using traditional media such as print advertising, in-store personal sales or direct marketing would suffice. But the younger aspirational customers are increasingly shunning this media. Research shows that the majority of brand discovery happens on social.
A staggering 42% of 16-26 year olds use social channels to discover new brands, whilst 21% of 27-34 year olds and 17% of over 35s do the same.
Word of mouth is also important with 28% (over 35s), 26% (27-34) and 21% (16-26) saying that this is the most important way to garner information about luxury companies.
Social drives connections. But does it truly influence behaviour? Absolutely. With one crucial ingredient: authenticity.
- 83% of consumers trust content shared by their personal network over brand content
- People are 40X more likely to respond on a ‘call to action’ when authentic imagery supports it
The story is the strategy. But it must be made for sharing
The hospitality world’s answer to this has mainly been online targeted marketing to drive immediate bookings. No one does this better than the OTA’s like Booking.com. Whilst this approach delivers short term gain, it is not fully capitalizing on the opportunity.
Social media, made for sharing, holds the key to driving experiential desire. This audience gets inspired via the experience’s of others … told through images and story snippets.
- People are 94% more likely to engage on social content when a photo or video is present
Storytelling made with sharing in mind opens up a whole mindset for how to shape brands in the luxury hospitality space; and the even better news is that it can be done more efficiently than ever before via social.
Success is highly dependent on a strong story that resonates with the ‘Aspirational’, with built in triggers encouraging them to share individual ‘storylines’ in their own social media channels – we call them “Instagrammable moments”.
We find that many luxury hospitality brands rely too much on the physical product and haven’t invested enough in defining their own unique story.
How does a brand write the story (strategy) in an authentic way?
The shared experiences of ‘Aspirationals’ serves as the single-most valuable source of inspiration for your brand, opening up a whole approach to crafting storylines and defining what really matters about your brand experience.
1. Diagnose the gap.
Hospitality brands can start by diagnosing, via the social world of social imagery and video, how disconnected their presented story is from what is being actively shared by this target traveller. What types of visualized topics, images and experiences are travellers sharing to represent a brand? How connected is the content and how well does it represent what makes the brand authentic? Based on the learnings, and difference in what we (brand) believe, versus what they (Aspirational) connect with and share. This is the ‘social story gap’.
2. Articulate authenticity via clear, visually led story-lines
Shape multiple ‘storylines’ with the expectations of the audience in mind. How will the ‘Aspirational’ expect to achieve BVOM while interacting with your brand?
A clear understanding of the needs of the audience and what the brand stands for is crucial. What are the real-time interactions that both speak to their desires, while reflecting the values of the brand? And, how are highlighted stories presented and messaged to connect with the new audience – not the audiences of old?
3. Promoting a ‘Culture of Social Sharing’
With consumers having over 70k thoughts in a day, and an average attention span of 7 seconds, brands must not get persuaded to do more with more on social. If the goal is to create stories that are social-ized, shared, discovered and shared (again), brands need to be smart about what storylines in the experience are social-ized. This demands a culture that recognizes what moments in the brand experience are made for, or worthy of social. Starting with bottom up, employees should understand how interactions across the entire chain of the brand can ultimately connect with an Aspirational, and persuade him or her to share the storyline to their network.
Consequently, the importance of tailored messages all stemming from an agreed core cannot be over emphasised. If done right, it opens up a wealth of opportunities for brands to reach his new and incredibly valuable aspirational market. If done wrong; well, look at what happened to other companies that failed to respond to market change…
The new reality of ‘BVOM luxury’ and Aspirationals’ demands for meaningful and new experiences places more pressure on the effectiveness of social media for hospitality brands. Social is more influential in driving discovery than ever – but how can a brand ensure that the story being shaped around its experiences is creating stickiness and sharing amongst the right target?