100 years ago (some) British women got the vote, yet problems of inequality still haunt today’s conversations. In particular, income inequality sparks fierce debate around the world, with wealth concentration deemed a growing and dangerous issue. Much has been written about this concern, but the magnitude of this phenomenon and its corresponding impact are less understood.
Not since just prior to the Great Depression, do so few own so much…
To put this in perspective, the top 1% globally gained US$45 trillion of wealth over the last seven years while the bottom 90% has struggled to stay even. Moreover, the top 10% now owns nearly 90% of worldwide assets and the top 1% alone hold over half.
So, what does all this mean for the top 10%? What is the impact of this wealth concentration on the affluent traveller?
Put simply, being wealthy is a reward that carries a variety of risks. Assumptions of being blind to austerity and lacking empathy for your fellow human are rife. These well-educated and political shrewd wealthy consumers, however, are alive to the struggle between entitlement and responsibility, and factor this increasingly into their behaviour. In fact, 80% feel it is their responsibility to help the less fortunate. Their desire to give back is genuine, and not often tied to feelings of guilt or overindulgence that can sometimes be a feature of “living in the bubble” of wealth.
Fear is anchored in the risk of disproportionate affluence and luxury travellers are therefore turning to a few key tactics to overcome this. One of the most important factors being the need for privacy. Now when we say privacy we do not mean an isolated, private island in the Maldives, rather privacy in the old-fashioned sense before the likes of Twitter and Facebook, when our private lives were genuinely private. In other words, affluent people are making attempts to hide their wealth for others and this includes their own family members as many wealthy individuals have exceeded the wealth of their brothers and sisters.
So, what effect does this need for privacy have on the affluent community?
Enclaving. The act of surrounding yourself with others with whom you share common values, ethnicities, and most importantly, socioeconomic status has emerged as a significant behaviour of luxury travellers.
Nearly all (91%) luxury travellers prefer socialising with people who share their values and 73% indicate that the vast majority of their friends have achieved a similar level of success. There is greater comfort in the familiar and while new experiences are high on the traveller’s list of priorities, they are increasingly comforted by brands that offer a hyper-segmented, close circle of like-minded people to share them with.
So, what does this mean for those targeting the affluent consumer?
As a luxury travel brand, you need to ask yourself:
- How well can we present a feeling of intimacy that requires knowledge about our guest to a client population that is increasingly protective of their privacy?
- If our target consumer base is comforted by a close circle of like-minded people, how do we capitalise on referrals? How do we ensure that our travellers are sharing their experiences with their enclave?