Speaking at the 15th annual ILTM in Cannes, Chris Sanderson, co-founder of London-based trends consultancy The Future Laboratory, revealed during a Ritz-Carlton event that spending on experiential consumption was set to hit €1.8 trillion by 2025, while spending on luxury goods would trail at €1 trillion.
“In addition, we see companies such as Bain and Boston Consulting Group anticipating a slowdown of luxury growth towards 2020, but travel bucks that trend because it sits on the experiential side of luxury purchasing,” said Sanderson.
But he warned that businesses needed to be aware of the “down-ageing” of who the luxury customer was becoming.
“Take 10 years off who you think is the current luxury customer – they are now most likely in their mid-40s. The Babyboomers will not be as critical as they have been in the last 30 years. They literally stop spending past their initial retirement and once they have ticked off their ‘bucket list’,” he said.
Sanderson said luxury travel brands have to facilitate consumers desire for “access over acquisition and experience over ownership” and at how they translate heritage into legacy.
He also highlighted recent figures from YouGuv that highlight how by 2025, Generations X, Y and D - all aged under 52 - will control 85% of luxury spending.
Herve Humler, president of Ritz-Carlton, concurred on the shift in customer age: “We now find that 51% of our customers are of these new generations.”
He said the company had been undergoing a major shift in the last few years to ensure it was fit to appeal to these – and other – customers.
“Luxury isn’t needed; it’s wanted, with people these days travelling to acquire memories. We have to make sure we remain relevant,” he said.
“We have dusted off the lion [Ritz-Carlton’s logo] and been through a lot of changes in the past seven years. We are much more digitally focused, we are more known for our design now in our hotels, and our Ladies and Gentleman [staff at hotels] are not so scripted – we say ‘be yourself’; now they can even have a tattoo! This was not something you would have seen in a Ritz-Carlton hotel a few years ago," said Humler.