Upchurch foreshadows ‘asynchronous’ bubble softening

Virtuoso Chairman believes travel industry will have "more resiliency"

Geopolitical and/or financial shocks could be the catalyst for bringing an end to luxury travel’s golden era following the COVID pandemic, suggests Matthew Upchurch, Chairman and CEO of luxury travel network, Virtuoso.

That was Upchurch’s feedback when quizzed recently by LATTE as to how much longer this period of continued prosperity in high-end travel will likely continue.

“Coming out of COVID a couple of years ago I said, I thought that the revenge side of this was going to be at least a year up to five years, maybe a little more. But I don’t know. When you look at all the demographic information, the desire to travel, the prioritisation of experiences over goods, etc…”

“Where I think the bubble will burst is there could be geopolitical shocks, there could be some financial shocks, but I think we’ll have more resiliency.”

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Upchurch said based on his discussions with hoteliers and other travel industry partners, “I’m not sure the bubble will burst evenly,” warning scrupulous partners taking advantage of huge pent-up demand to be prepared.

“I think those products, partners and destinations that allow the overall value equation to deteriorate… meaning, I just paid 2,000 Euros a night and the service is crap — right now, there is so much demand, but if there’s any kind of softening, the bubble will be asynchronous.”

“The organisations that really deliver value, personal touch, customisation, I think they’ll maintain pricing power, whereas as some of the others will suffer.”

Matthew Upchurch, Chairman and CEO, Virtuoso at last month's AU/NZ Owner/Managers Forum in Bangkok

Upchurch also raised the overzealous use of the word ‘luxury’ in the industry.

“There’s a lot of ‘luxury’ that’s really not luxury. It’s ‘aspirational luxury’. That’s the problem,” he said concerned.

Meanwhile, Upchurch said Australian travel advisors should be ensuring their value as professionals by charging service fees to clients, reiterating past feedback on the topic.

“I know it’s still early days in Australia, but in other parts of the world — Canada, the US, Latin America — more and more advisors are charging serious fees.”

“You have advisors that charge a retainer, which says to the client if you want to deal with me it’s five or ten grand a year retainer. There’s a lot of different business models out there to consider.”

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