The difference between ‘affluent’ and ‘luxury’ travelers

It’s easy to confuse “affluent” travelers with “luxury travelers” but findings from the newly-released MMGY 2017 – 2018 Luxury Travelers Paper show they are simply not the same.

That’s important information for both travel marketers as well as travel agents who want to go after the lucrative luxury niche or already serve it, according to Steve Cohen, MMGY’s vice president of research & insights.

“The message for travel agents — and travel marketers — is don’t focus on travelers, only according to their income,” said Cohen.

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The paper — part of MMGY’s 2017 – 2018 Portrait of American Travelers — defines affluent travelers as those with annual incomes of $125,000 plus and an average annual income of $217,000. Luxury travelers — a subset of affluents — are defined as having an average annual income of $224,000.

Although there’s only a $7,000 difference between these two groups’ average incomes, luxury travelers spent 62 percent more on vacations — a household average of just over $10,000 — than affluents during the the past 12 months, according to the report.

In addition, luxury travelers plan to spend 68 percent more on leisure travel than affluent travelers during the next 12 months.

Cohen called the finding on the gap between affluent and luxury consumers travel habits and preferences, surprising.

“Our hypothesis was that they are the same, but most affluents are not luxury travelers,” he said. “Simply because someone has a particular income, doesn’t make them a luxury traveler. And even those among high-income consumers who have taken a vacation, aren’t necessarily taking luxury trips.”

The report noted that of the estimated 22.1 million affluent American households — those with that annual income of at least $125,000 — 11 percent didn’t take a single vacation during the past 12 months. And among those affluents who did take at least one vacation, not all spent on high-end travel experiences.

Luxury travelers—those who believe in paying more for the highest-end accommodations and transportation — make up just 36 percent of affluent travelers, according to the report.

How then can travel advisors discern which affluent clients are, in fact, luxury travelers?

The “discovery” process — asking potential clients the right questions — is key, Cohen said.

The difference between opting for first class air over business class, for instance, “can give an agent a sense that this may be a luxury traveler.”

“It’s more about travel behavior and not income,” he added.

That way of looking at travelers is part of MMGY’s advice in general: the industry should consider psychographic (behavioral) factors rather than demographic factors like income and age.

Other findings from the report:

  • During the past 12 months, luxury travelers took an average of 4.7 vacations compared to affluents’ 3.2 trips.
  • In 2017–a year when travel spending is relatively flat–luxury travelers intend to spend 4 percent more than they did in 2016.
  • Luxury travelers’ top motivations for vacations are relaxation, exploration, experiencing different cultures and new cuisines and enhancing their relationships.
  • Luxury travelers’ memories of their childhood vacations influence their current vacation decisions.
  • Seventy-six percent of luxury travelers—compared to 57 percent of affluents—prefer to focus on making memories over acquiring things.
  • The two most popular hotel brands for both luxury and affluent travelers are Hilton and Marriott. However, significantly more luxury than affluent travelers prefer Four Seasons and Westin.
  • Both luxury and affluent travelers’ top two airlines are Delta and American followed by United, Southwest and JetBlue.

This article originally appeared on TravelPulse.