Budget Travel

Is luxury market ruining travel for the rest of us?

Woman at beautiful beach holding sunglasses

Woman at beautiful beach holding sunglasses  (iStock)

The past two decades has seen a rise in vacation experiences catering to the super rich.  

Everything from around-the-world private jet vacations to luxurious villas staffed by butlers and chefs, have become the norm.  These travelers have the money to spend, so travel companies are pulling out the stops to make sure they spend it with them.

They do this by designing brands, products and experiences around the high-end traveler.  

But does this come at the expense of the mass market or everyday traveler? 

The short answer is no and it has as much to do with how you define luxury as it does with how you define mass market.  

In one example, mass-market ships are being expanded to cater to the luxury traveler by creating a “ship within a ship” concept that caters to virtually every economic level of travel.

How Do You Define Luxury?

The definition of luxury has been debated for years in the travel industry.  What is considered luxury when it comes to a cruise?  Is it a small, high-end cruise line that only features luxury experiences, along with luxury pricing?  Or is it a mass market cruise product with 4,000 passengers and a designated area that’s created to cater to the luxury traveler?  

You’ll find people calling it both, based on this example, and you may also find this: the person paying $5,000 standing next to the person who paid $500, all for the same ship and for the same week.  It’s part of the strategy to expand the definition of luxury and to create unique experiences within an existing environment.

A concept like this one works well for the multigenerational family, giving the individuals traveling together the ability to choose the accommodations and plans that best meet their ability to pay.  The same would be true for groups that like to travel together as they may have different budgets to work with.  Does this sound like travel for the 1 percent?  

Luxury doesn’t always coexist peacefully with the mass market.  A brand new Ritz Carlton Hotel and Residence is being erected on the site of the former International Market Place in Waikiki, upsetting some travelers who are surprised to see it missing when they arrive.  They long for the food court and the cheap eats that would come with it, as well as the cheap shopping.  Others applaud the move as it provides more high-end inventory in a destination that seems to have no problem filling those rooms.  

The move is driven by the demand from travelers for luxury accommodations, dining and shopping, and that is how markets and businesses respond.  

Just because travel suppliers are focused on where the big bucks are doesn’t mean they want to forego the everyday traveler.  Indeed, there are plenty of options for anyone to travel and explore the world.  

The biggest obstacle, for those traveling long distances, is the airfare as it has risen to dizzying heights on some routes.  After that, the variety of choices can run from hostels for a few dollars a night to a luxurious penthouse suite fit for a king.  

Defining the Middle Class Traveler

The middle class is defined as a household that makes a median income of $54,000, but that varies based on geography and other factors.  Some describe the middle class based on the percentage of discretionary income, not necessarily overall income, that’s available for purchases like travel.

Stagnant incomes coupled with increasing costs have left many middle class households pinched when it comes to vacation travel, but they still have plenty of options to explore.  Here’s just one:

Get it Included Up Front

One of the greatest growth areas in travel is the all-inclusive resort.  Properties that feature a single price, and include everything from drinks to food to entertainment, are booming.  And they're booming at every level along the economic spectrum.  

Set aside the cost of airfare, and you will find prices that range from $100 per person per day to more than ten times that amount, depending on the level of luxury.  Since there are far more budget or mid market travelers, you’ll also find far more product in that price range, leading to a myriad of choices.

If all-inclusives aren’t for you, and you’re not in that 1 percent, do what a lot of college kids have done over the past decades: grab a back pack and a plane ticket and head to Europe or another far flung locale.  You can still do Europe on far less than $100 a day, you just might not be able to do it on the old $10 a day when I graduated.  

More From TravelPulse

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Holland America’s Holiday Caribbean Sailings Go All-Inclusive

Mark Murphy is a noted travel expert, author and founder of TravelPulse.com.  You can follow him on Twitter at @murphytravels.