LHW recently announced the addition of eight new members to their portfolio and has an anticipated 13 new builds across the world in 2021. Shannon Knapp is optimistic about the recovery of luxury travel and tells us about where she is seeing demand and how the pandemic has influenced consumer behavior.
At the ILHA’s virtual conference in December, you spoke optimistically about the recovery of travel. What are you seeing in 2021?
I remain exceedingly optimistic about the recovery of travel. Though we are by no means out of this crisis, I do believe we are beginning to round a corner. Like much of the travel industry we saw steady progress in the first quarter of 2021. Our weekly revenue production was below 2019 levels, but increasing, averaging almost 45 percent more per week in the first quarter of 2021 than in the last quarter of 2020. In the last several weeks we have begun to see an acceleration, with revenue production up nearly 500 percent over this time last year, and for the last week of April, we saw several countries in Europe exceed even 2019 production levels, with Italy up 9 percent, Germany up 60 percent, and Switzerland up 147 percent over 2019.
There are also clear signs of undeniable pent-up demand from travelers which will fuel the industry as government restrictions lift and people feel safe to travel again. Many studies from the first quarter of this year have shown that affluent travelers are very optimistic about traveling safely and more than half are already planning vacations, which we also see reflected in LHW results. For those that are traveling, they are being spontaneous. For example, more than half of LHW travelers are booking and traveling within a week, or less. But, even more remarkably, for those traveling outside their region, almost two-thirds are booking and traveling within seven days, two times more than 2019 for LHW travelers. Additionally, we continue to seean increase in the popularity of weekend escapes, with 50 percent of LHW’s 2021 bookings so far being for quick weekend getaways. Travelers are actively surveying what is happening as it relates to travel restrictions, COVID cases, and risk for quarantine. They are moving quickly when the conditions align and a window to travel opens. The urge to travel is so strong that many of our guests are planning their travel not based on a specific desired destination, but rather, simply where they are allowed to travel without restrictions. The combination of the leisure travel already happening plus the pent-up demand will help the industry begin to rebound in 2021 and establish a strong foundation and momentum for a very strong 2022.
Where are you seeing green shoots and what destinations have been popular despite the pandemic?
Not surprisingly travelers are seeking more remote, less crowded locations. People are highly valuing space, fresh air, and privacy. At LHW we are seeing spikes in demand for beach, countryside, lakeside, and mountain destinations, with beach destinations bookings nearly double in 2019, and mountain, lake, and country destinations showing similar growth.
One of our properties in the Maldives is up almost 500 percent from 2020. Additionally, we have seen a significant increase in demand in U.S. destinations that provide for a quick escape from a nearby city, such as Santa Barbara and Vail.
Speaking of cities, as data across the industry has shown, they have yet to bounce back. I have no doubt our beloved cities will certainly return to their original vibrancy and energy, though the recovery will be slower.
Has the luxury travel consumer changed? Will any of these behaviors be permanent?
The trend of “Luxury is Local” has been relevant for many years for luxury travelers, but now we are seeing the 2.0 version take effect. This trend is no longer about inbound international travelers, but instead about local travelers awakening to, and exploring the beauty of, their own countries. For LHW, travelers booking within their own region has increased by 64 percent from 2019 to 2021.
Unabated growth of consumer demand for authentic and enriching experiences has not been dampened but instead fueled in this moment. Luxury travelers want to support small businesses and communities that make a location unique. They want to leave a destination better than they find it. And they want to feel like they are being enriched while enriching the destination.
Certainly, when international travel resumes I expect travelers to eagerly board a flight across the world. However, I believe the “Luxury is Local 2.0” trend will last far beyond the pandemic with travelers continuing to explore and support their native countries.
How are you inspiring guests to visit your properties when the time is right?
As we continue to navigate the effects of this pandemic, LHW remains focused on our mission to connect and empower our hoteliers and guests to stay independent.
As the pandemic developed, LHW crafted a phased recovery strategy to support our members and inspire future travel among our guests. Our global team has been agile, creative, and responsive to ever-changing business conditions and our hotels’ emerging needs throughout this tumultuous time. I am proud of how quickly our team shifted our sales and marketing approach to adapt to the new reality with our clients and guests. We developed innovative marketing platforms to inspire wanderlust including Hotel Experiences From Home, LHW Virtual World Tour, and Stay if Forward.
We also produced a LHW coloring book in 2020 and we just unveiled the second edition this spring following the success of the first.
Additionally, with some of our guests starting to travel again we are also focused on their emotional and physical needs during this moment. Ensuring health and safety comes first, which are now table stakes for any hospitality brand. LHW introduced our Healthy Stays program last year and we have continued to highlight our members’ health protocols and certifications to reassure guests of their safety on property. Recently we also introduced an initiative for U.S. guests traveling internationally to help them understand which of our members were offering on-site COVID-19 testing for guests. As well, flexibility is key when inspiring travel during this recovery period. Our guests want us to be as flexible as possible with last-minute booking and changes to their travel plans. In response, we have introduced Flexible Cancellation policies. We even offer Leaders Club points credit if a hotel is unable to issue a guest a refund or hotel credit for a stay through June 31, 2021. These combined efforts help alleviate the friction in the travel process and inspire and reassure our guests that LHW is here to support them as they begin to plan and explore once again.