It’s excellent news for our industry. The fact that affluent consumers are spending money was one of the key trends that emerged from the American Affluence Research Center’s Fall 2014 Affluent Market Tracking Study, a survey of the wealthiest 10% of U.S. households based on net worth.
In addition, the segments in which they want to spend that money offer more encouragement. Among respondents, 42% indicated they prefer to divide their discretionary income among durable goods and local experiences or travel. This is an important sign of positive consumer confidence among high-net-worth individuals, and it also extends to holiday purchases. A reported 80% of the affluent said they will spend more or the same on holiday gifts this year compared to 2013.
Here is a snapshot of other survey insights:
- Many respondents (41.8%) specified that the role of a trusted travel advisor in helping plan their next vacation was either very or somewhat important. The affluent recognize a travel advisor’s esteemed value and the breadth of expertise, contacts and knowledge they bring to the process of crafting a vacation experience.
- The research also shows there are opportunities for travel advisors to continue to elevate their profile and enhance their business because 31.3% of survey respondents said the role of a travel advisor was not very important.
- The family that travels together stays together! Half of the respondents (51.9%) answered “yes” to the question, “Will your next vacation trip revolve around multi-generational or family travel activities and destinations?”
- According to survey respondents, nearly half (49.3%) last traveled to the Caribbean more than two years ago, and 36.7% indicated they have never visited the region. In the last six months, 4.1% vacationed in the Caribbean. These figures exclude cruise visits.
- Of those who indicated they have traveled to the Caribbean for vacation, the top five most popular destinations in the region were the Bahamas (31%), U.S. Virgin Islands (24.9%), Puerto Rico (20%), British Virgin Islands (12.7%) and Cayman Islands (10.9%).
- Safety perceptions and security issues likely played a huge role in these results — more than half of those surveyed (67%) have never visited the Middle East for vacation and do not expect to travel there.
- High-net-worth consumers are still exploring this part of the world, though. A total of 23% reported having previously visited the Middle East on holiday. Another 9.2% said they haven’t visited but expect to in to future. Israel topped the category (at 59.6%) as the destination respondents have either visited or plan to visit there. Rounding out the top five Middle Eastern countries were Turkey (52%), Egypt (38.9%), Jordan (17.5%) and the United Arab Emirates (9.8%).
The survey was based on questionnaires mailed to a randomly selected U.S. sample of 4,500 men and women. Following a weighting of the respondents, the participants in this survey have an average net worth of US$3.1 million and an average primary residence value of US$1.2 million.
Let’s keep the conversation going. What are your takeaways from these results?