Luxury travel in 2008

Are there tough times ahead for the luxury travel industry?

Luxury consumers’ feeling of confidence tanked in the third quarter as measured by Unity Marketing’s Luxury Consumption Index. The index plummeted to 87.3 points, its lowest level since 2004, following a 4-point drop in the second quarter. The index is based upon a survey of over 1,000 luxury consumers (average income $150,200 and age 43.6 years) tracking their buying preferences and spending patterns conducted early October 2007.

Read further into the press release and a different picture emerges…

The third quarter luxury tracking survey found that spending was particularly weak in personal luxuries — especially fashion accessories, jewelry and watches — as well as in key home luxury categories, notably home decor fabrics, window and wall coverings, kitchenware and linens and bedding. But while luxury consumers spent significantly less on luxury goods, their spending on luxury experiences actually rose 11 percent.

“In the face of declining luxury consumer confidence and a cut back in spending on material goods, luxury consumers chose to indulge in experiences, notably travel, dining and spa/beauty services, that give them more meaningful gratifications than comes from buying a consumer good like a handbag. Let’s face it, a purse is only a purse, but a luxury experience is a something to remember,” Danziger says.

What do you think is the outlook for the industry in 2008?

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