Defining The Concept
The origin of the word ‘luxury’ dates back to mid 17th century and comes from Latin word ‘luxus’, which has a meaning of ’excess’. The concept of luxury tourism in today’s world perfectly fits to its original meaning, as by all means it can be described as ‘excess tourism’.
Luxury tourism had always its own share in overall tourism market from ancient times, but it became extremely widespread especially in recent years, due to high competition, new consumer behavior and technological progress.
One of the main issues in tourism is its concepts and definitions. From the economic perspective, the terms and concepts needed to be defined clearly and objectively, however, the cultural and social perspective of tourism phenomena doesn’t always allow to do that. As a result tourism stakeholders have to deal with changing definitions of concepts and act accordingly, which makes tourism industry unique, even more challenging and at the same time the most demanded.
The concept of luxury tourism has many definitions proposed by industry leaders and academicians, however, economic measurement criteria requirements create a notion of need for more clear luxury tourism definition.
Within the Scope of Tourism Industry
Luxury tourism is considered as niche tourism industry as it serves customers providing unique, authentic ‘excess’ service, so that customer won’t need to worry about the organization or lack of amenities.
In general terms under the term ‘luxury tourism’ we can include the following particular niche markets:
1. Staying at all inclusive luxury 5 star hotel suites and resorts
2. Cruise ship travels
3. Travels involving luxury shopping
4. Unique customized and personalized tours with authentic experience
5. Golf tourism
6. Private jet journeys
7. Extreme experience tourism, such as deep ocean tourism, space tourism, undiscovered destinations tours (Antarctica, Greenland, Iceland)
8. Personalized yacht and boat tours, river cruises
9. Mini indulgencies, such as VIP airport services
One of the distinctive features of luxury tourism is the fact, that it is a complete opposition to mass tourism.
Luxury Leisure Marketing
Case: Abercrombie & Kent (A&K)
One of the market leaders in luxury tourism UK based tour operator Abercrombie & Kent markets itself by offering ‘singular and renowned service with unbeatable value…providing unmatched on-the-ground expertise’.
When it comes to pricing marketing strategy Abercrombie & Kent, despite serving niche luxury market, it has special offers for its customers and discounts for members of its loyalty program Marco Polo Club.
It positions itself with a brand of A&K depicting in every possible opportunity A&K Way of luxury traveling. It has also different A&K sites such as A&K Villas, Philanthropy, International Estates, Magazine and Blogs and active online.
Dubai is the only city in the Middle East attracting luxury tourists from other continents, such as Russia, India and Africa.
According to Bain & Company’s research, Dubai luxury market comprises 30% of total Middle East region luxury market and about 60% of UAE. Dubai Mall, considered as the largest shopping mall in the world with nearly 1,200 shops, accounts for 50% of all Dubai market. Dubai Mall hosted over 38 million visitors in 2009, thus surpassing other world leisure destinations such as Times Square, Central Park and Niagara Falls.
In Dubai luxury tourism marketing is managed through local and international travel agencies. The main categories of luxury tourism services are:
1. The Night in the Desert
2. Safari in the Desert
3. Authentic Dubai City Tours
4. Golf Tourism
5. Horse Races
6. Helicopter Tours
7. Cruises in sunset
8. Luxury Shopping
9. Indoor skiing at the World largest ski resort
11. Dune bashing – car tracking in dunes
12. Wild Wadi Waterpark Dubai
From the other way around, UAE citizens themselves have an image of being luxury shoppers in other countries around the world. The primary destinations for them are still European cities, such as Paris.
Despite recent crisis periods luxury tourists proved to stay loyal despite that. We can project, that the demand for luxury tourism is going to grow especially according to new consumer behavior of generation Y. Generation Y demands sophisticated technology experience, personalized products and services. The luxury tourism is the first and the most flexible industry, which has an opportunity to meet expectations of new generation consumers.
Worldwide Luxury Markets Monitor, Spring 2013 Update, Milan, 16th May 2013
Kaleichev S. et al., The cutting edge between the mass and luxury tourism, 2013, Academia.edu