Now, six months to the day since those attacks, the luxury travel segment is bustling again, in many instances propelled by the potentially risky tactic of discounting.
"The luxury travel segment was swept into the downturn as everyone was," says John Antonello, president of NFO Plog Research, a marketing research and consulting company. "In fact, luxury travel was more affected." In 2001, the luxury segment was already down more than the rest of the travel industry, he says. "Sept. 11 just exasperated the problem."
Two months later, with help from discounting, daily booking levels for luxury cruises were back to normal, claims Bob Sharak, VP-marketing for the Cruise Lines International Association. "In October and November, you were seeing cruises for prices you haven't seen since the `80s," Mr. Sharak says.
Bookings have skyrocketed, he says. Cunard Line's luxury-oriented Seabourn Cruise Line, for example, increased net revenue by 307% for the three months ended Feb. 4, vs. the same period in 2001. Seabourn in January 2001, well before the terrorist attacks, repositioned its brand as "The yachts of Seabourn" as it pursued affluent customers. Tinsley Advertising, Miami, handles.
Luxury hotels' new reservations followed a similar course, returning to pre-Sept. 11 levels in some markets by Oct. 1, after cancellations reached nearly 70% in September, says Marshall Calder, senior VP of Leading Hotels of the World and managing director of its Leading Small Hotels unit. Mr. Calder's company provides distribution, reservation and marketing support to independent luxury hotels.
After Sept. 11, advertising changed, too. Since the attacks, advertising has targeted the practical rather than the emotional, says Jonah Disend, president of Redscout, a cultural research and consulting company . "There is a lot more about safety and a lot less about image," he says.
SAFETY BECOMES PRIORITY
Radisson Seven Seas Cruises, which features butler service on most of its ships, refocused its ad message to accentuate safety, says Mark S. Conroy, president-CEO at the cruise line, part of Carlton Hospitality Worldwide.
But security also can represent an impediment for luxury destinations. "I think the real issue that people are thinking about now, when safety is put aside, has to do with the whole issue of the hassle of travel-the additional time, the waiting in lines, the multiple searches. By the end of the day, the luxury traveler, in terms of the actual trip itself, doesn't feel very special," says George Fertitta, president-CEO of MDC Communications Corp.'s Margeotes/Fertitta & Partners, New York. "So the trick is to when you arrive, you end up feeling very special."
Luxury travelers have become more price conscious, Mr. Disend says. Once people experience luxury travel for a lower cost, they want to find it again. Discounting is not too damaging if it's part of a pack movement, says Mr. Fertitta, but "there's something to be said about knowing the value of what you're offering and sticking to it."
Mr. Sharak adds that discounting can erode a brand's luxury cachet. "The luxury traveler still wants service and is willing to pay for it," Mr. Calder contends.
To jump-start the industry, Mr. Disend says, there needs to be a marketing shift. After Sept. 11 some of travel's pleasure has gone away, he says. "It's less about fantasy and much more about reality now," he says. "We need to return [the fantasy] to people."