Speaking on a panel at the TTG Luxury Travel Summit, Kerry Golds, chief tour operating officer at Abercrombie & Kent, said the luxury operator was yet to see the effects of the ongoing cost of living crisis, citing a 30% increase in average booking values in 2022. However she anticipated that the crisis “will have an impact.” She added: “I think we all have to look at our value propositions versus our price.”
When asked about rising air fares across the sector, Qatar Airways UK and Ireland regional manager Gary Kershaw said for most airlines fuel represented around 40% of their bills, and said rising prices were “largely down to supply and demand.” He added: “My personal take is that I don’t think it’s sustainable and we will see a rebalance [in pricing]."
Silversea Cruises UK, Ireland, Middle East and Africa managing director Peter Shanks urged the audience to “focus on the long-term” and developing their products. He stressed that so many external factors were out of the industry’s control, such as exchange rates and government policies. “Holidays are the last thing people want to give up. There will be an impact in the short term, but we remain confident and look to the long term,” he added.
The panel agreed that the pandemic made travel more precious to consumers, who were willing to spend more and upgrade. Shanks said there has been a “step change in people’s eyes being opened to what’s available to them around the world.” He said Silversea guests are booking longer itineraries, combining multiple itineraries and booking grand voyages. “They want to go further afield and do their bucket lists. We’re seeing a real uplift, and people are prepared to pay the price.”
However Kershaw said he was “acutely aware that the bubble will burst.”
The panel highlighted the loss of talent within the industry due to the pandemic, agreeing that many talented individuals chose not to return to the sector. Kershaw added: “We have to find a way to entice people back. It’s about selling a dream.”
To encourage newcomers into the industry, Abercrombie & Kent has re-introduced its graduate training scheme, recruiting 15 individuals four weeks ago, who Golds said have ‘brought a huge energy to the company.”
Future trends
Looking to the future, Tom Rowntree, vice president, global marketing of luxury brands at IHG Hotels & Resorts, said IHG is “reinventing” Regent Hotels & Resorts, after acquiring a majority stake in the brand in 2018, and will launch a flagship property in Hong Kong later this year.
He also predicted that luxury customers should expect to see more colour used in hotels, taking inspiration from the fashion industry, which has been embracing bold hues for several years.
For Qatar Airways, Kershaw said while the airline has growth ambitions, its biggest challenge is not having enough aircraft, partially fuelled by its Airbus A350s being grounded. He explained that the majority of its growth and expansion will be through its partner airlines.
Golds revealed that Abercrombie & Kent’s destination team has a list of 27 projects it is researching.
Discussing how they planned to grow their customer bases, Golds said Abercrombie & Kent is seeing “huge interest” from consumers just under 40 years old. “We’re having to adapt to how they buy and how they want to interact with us.”
Shanks explained that 50% of Silversea bookings made this year were from new customers, with baby boomers continuing to be a key market for the line. “There is plenty of growth ahead,” he added.
