The State of Luxury Travel in the U.S.

Luxury travel has long been one of the most lucrative segments for the travel agency community. Indeed, top travel agency groups continue to dominate luxury travel sales because their customers demand dedicated service, specialized knowledge and connections with high-end suppliers. Luxury travel also has not been a category that can be easily turned into a commodity sold online.

So what are the trends that top travel agency groups are seeing in the luxury market today? Over the past three months three major travel agency consortia—American Express, Travel Leader Group and Virtuoso—have released luxury travel surveys of their members, examining booking trends and market characteristics. Here are just a few of the trends and destinations cited:

For American Express Retail Travel Network travel agents, the biggest news is their high-end customers increasingly want to book the "whole" package. American Express’ latest survey found that 74 percent of the group’s agents say their customers are asking them to shape the entire trip, 60 percent say their customers want help in finding the best destination and experience that is right for them, and 53 percent say they guide their customers who have done their research but need help in uncovering deals.

PHOTO: Top luxury travel agents report they now shape the entire package for their customers. Pictured: Customers on a customized tour of Lake Como in Italy. (All photos by James Shillinglaw)

Even better news from the American Express survey is that customers keep coming back for high-end travel services. Virtually all (96 percent) of agents surveyed say they have had more or the same amount of repeat customers this year compared to last year. They also say they book an average of five trips those repeaters, which adds up to a highly lucrative business for them.

Some 40 percent of American Express agents say their customers are more focused on trips theta deliver a memorable experience (as opposed to just being focused on price), while a third of agents surveyed said their customers spend $5,000-$10,000 per trip. They also report an increase in customer spend on accommodations (59 percent), room and cabin upgrades (59 percent) and tours and excursions (51 percent). Sixty percent of American Express agents say their customers are simply overwhelmed by options on the internet and need expert help.

PHOTO: More customers are seeking to upgrade their accommodations on cruise ships, resorts and hotels. Pictured: A villa at The Brando in French Polynesia.

For its part, Travel Leaders Group recently reported accommodations booked most frequently by its luxury travel clients are staterooms on luxury cruise ships, five-star hotels and resorts and boutique hotels. Roughly 90 percent of Travel Leaders Group agents also said bookings have increased or remained steady for luxury hotel bookings, luxury cruise bookings, bookings for suites on cruise ships, luxury tour bookings, and first- or business-class airline tickets.

For luxury hotels alone, 92 percent of Travel Leaders Group agents said bookings are higher than or on par with the same time last year. So the luxury business is strong and getting stronger. More than 87 percent of those polled said their luxury cruise bookings are equal to or better than the same time last year. For luxury tours, nearly 90 percent said their bookings are higher than or the same as the same time last year. A vast majority (88.5 percent) of those surveyed said their first- or business-class airline bookings are higher than or the same as the same time last year.

A similar Virtuoso survey of its member agents, released in August, focused more on trends and destinations being booked. The group’s agents say multigenerational family travel continues to be the top trend, followed by river cruising, active or adventure trips, celebration travel and luxury cruises

The biggest change in in the Virtuoso survey was the countries described as “emerging” destinations. Cuba remains the tourism destination most on the rise, but the popularity of travel to the Galapagos Islands rose once again, while Iceland and Belize cracked the “top 10" emerging destinations. In order, top emerging destinations were Cuba, Myanmar, Vietnam, Galapagos, Bhutan, Cambodia, Chile, Iceland, Turkey and Belize.

Italy continues to be the top destination for international travel, according to Virtuoso agents, followed by South Africa, France, Australia and New Zealand. Italy also remained the top destination for families traveling, with England, Hawaii, Costa Rica and Mexico making up the rest of the list.

PHOTO: The top luxury international destination for Americans continues to be Italy. Pictured: The Ponte Vecchio in Florence.

In the U.S. market, New York reclaimed the top spot as the destination most desired by customers, followed by Maui. Napa Valley/Sonoma was bumped to third place from a first place ranking in 2013. Las Vegas took fourth place and for the first time and Hawaii’s Big Island joins the list.

According to Virtuoso agents, the top reasons people are traveling are to explore new destinations, rest and relaxation, seeking authentic experiences in new destinations, rediscovering previously visited destinations and personal enrichment.

Virtuoso agents also reported a rise in longer trips (eight days and longer) to international destinations and also said that when necessary travelers are willing to book lower room categories in order to stay in nicer hotels. Virtuoso agents also said they continue to be the lead influencer in determining their clients’ travel decisions, followed by recommendations from friends and family. 

The five most popular destinations for honeymoons cited by Virtuoso agents were Italy, French Polynesia, Maui, Maldives and St. Lucia. Italy and French Polynesia also were the first two destinations cited as the most popular for romantic getaways, followed by Bali, France and the Maldives. Meanwhile, the five most popular adventure destinations cited by Virtuoso agents were South Africa, New Zealand, Galapagos Islands, Costa Rica and Peru.