Luxury Travel, Lifestyle and Marketing Trends

High End Bricks and Mortar Retail: Last Man Standing

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All the signs are there in luxury retail trends. Soaring urban real estate costs. Inevitable lifting of rent controls, most recently in Spain. Struggling popular priced malls. Lower middle class and middle class incomes strapped by stagnating wage growth. And add to this the rapid acceleration of online shopping.  In the developed world malls and mom and pop retailers are going away, the pace picking up steam.

What will replace them? For starters, in the short term, more ubiquitous and ever larger emporiums of global luxury brands and shopping centers geared to the affluent and elite affluent. Every summer when I go to Madrid I see it happening – independent fashion boutiques replaced by the names you know. In Miami, it’s starkly apparent. With Brickell’s CitiCentre project by Swire Properties, Miami-Dade County will have four high end shopping destinations – Bal Harbour Shops, Village of Merrick Park, and the Design District. During Art Basel I paid a visit to the new section of the Design District and frankly couldn’t believe my eyes – I thought I was transported to Beijing and the shopping center adjacent to the Opposite Hotel (operated by Swire Hotels).

I wrote “the short term” because I think that longer term, the affluent will be looking for more alternatives to the same global designer fare you find in Paris, London, New York or Shanghai. LVMH, Hermes and others have recognized this, and for awhile a few years back there was talk about going global and thinking local, as in designing products that were more of the place. I think they were on to something big, but there hasn’t been much talk of that recently. Absent this, and there will come a time when the affluent will look elsewhere, which they’re already doing online.

At the same time, the cost of marketing for small, independent retailers used to make business challenging, but now, with social media, promotion for a small budget is in the cards. And how about rents? I predict independent high end retailers will thrive despite the rents, considering the kind of profit margins they enjoy.

But there’s a lesson here too for smart real estate developers. My advice? To sprinkle their shopping centers with unique shops at mid-high price points to not only provide variety, but also, draw in the lesser affluent who can make one time luxury purchases and patronize the restaurants and bars. I read that CitiCentre plans to do this very thing. The shopping part of the project is run by the owners of Bal Harbour Shops. It will be very interesting to see what they do. Stay tuned.

 

 

 

 

Baby Boomers and Retirement Niches

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Arguably the most well traveled generation in American history, Baby Boomers, used to the new and different weren’t content with the same old, same old. They helped propel the niche economy, facilitated by technology. We’ve seen everything from special interest cruises and tours to dating sites and ever more niche culinary sensations which we’ve written about over the years. It’s no surprise, then, that in their retirement, boomers are looking for senior-oriented communities to pursue their special interests with the like minded and to be more active in body, mind and soul. And their numbers and healthy assets are propelling a growth in this newest niche.

True, some sports oriented communities like golf and polo have been around for decades. The differences now are that interests are a function of everything from sexual orientation to a wide range of passions and hobbies. Think LGBT focused communities and university based enclaves where residents take classes and have access to skilled nursing care. Others are devoted to the arts such as the NoHo Senior artists Colony apartments in North Hollywood, California with classes in collage construction, creative dance and screenwriting. Probably one of the most unusual is Escapees Care Center in Livingston, Texas, for those with an interest in recreational vehicles and onsite medical treatment.

But don’t think these come cheap. At one multi generational community called NewBridge on the Charles entrance fee for independent living apartments range from $600,000 to $1.3 million besides monthly expenses. The fee is 90 percent refundable but it’s still a major outlay and isn’t risk free.

With the market potential in numbers and price tag, it’s a sure bet to conclude these kind of communities will grow. What’s the next niche?

In an article in the New York Times, Max Greenberg, a senior living adviser and senior real estate specialist in Palo Alto, California predicts we’ll see ones run by large national fraternities and sororities “allowing seniors to once again experience the partying, socialization and spirit of frat life they had in collage. I wouldn’t be surprised to see a Grateful Dead oriented community sprout up in the Bay Area, “he concluded.

Spirits Tourism

Kentucky Bourbon Road Trip

Kentucky Bourbon Road Trip

Wine tourism has been around for decades – tours of vineyards, wine hotels, and wine trails, from California and New York to New Zealand, Australia, Europe, the southern tier of South America and more. Of late, thanks to craft breweries we’re seeing a growing number of craft beer festivals and museum like brewery tours. The newest link in the chain, not surprising given the celebrity status of mixologists and interest in new beverage taste sensations, is spirits (as in liquor) tourism. Spirits tourism is following what is a major growth in spirits revenue nationwide. Excluding wine and beer it has doubled to over $50 billion from 2000. Its appeal is also based on an interest in local products and history and, similar to craft beers, the boom in craft liquors. A recent google search revealed a surprising number of states – Delaware, Washington, Oregon, New York, that have gotten on the bandwagon with spirits trails, sometimes combining them with wineries and breweries.

Not only distillers, but also state and local governments see this as a new source of tax revenue and jobs, as well as a new tourism niche. Kentucky, in particular, is getting in on the act, enjoying a special upswing from bourbon, with new distilleries being built, complete with a tasting room for sipping bourbon and looking at the local scenery. The Kentucky Bourbon Trail, a collection of distilleries on a scenic route, attracts thousands of visitors annually. Distilleries offer behind the scenes tours where one can watch vats of yeast bubbling and workmen rolling barrels of whiskey as they’ve done for decades. In downtown Louisville, Whiskey Row is being revived with a new distillery for Old Forester, the country’s first bottled bourbon. Another producer, Wild Turkey, has paid double in taxes this year, twice what it paid in 2010 thanks to robust sales. For hotels and restaurants, craft spirits are a new avenue for public relations, with the media devoting more space to everything from drink recipes and signature cocktails to star mixologists. One of the more clever outtakes is the bar at the new Traymore restaurant at the Metropolitan by COMO. It has a gin bar boasting 40 different kinds of gin and the Apotheker at the Shelbourne Wyndham Grand South Beach, a riff on bar as pharmacy.

Photo courtesy of NationalGeographic.com

Super Rich, What are they Buying?

G650 Gulfstream, the jet of choice of the uber rich

G650 Gulfstream, the jet of choice of the uber rich

 

A colleague said she developed a high end cooking tour to Italy, 7 days with classes each day and stays in Renaissance palaces. The cost? $10K plus airfare. She said she was concerned that she might not be able to sell it at that price. My advice to her? Charge a lot more and you’ll sell it.

As Robert Frank, chronicler of the top 1% wrote, today there are the “haves and the have mores”. And what’s selling are products and services for the top one-hundredth of the 1 percent. While sales of the smaller, cheaper jets, and 150 to 200 foot yachts have dropped, sales of $65 G650 Gulfstream private jumbo jets and yachts over 250 feet are booming (the largest is now the 590 foot Azzam owned by the president of the United Arab Emirates). A recent article by Frank in the New York Times quoted Jim Taylor, a wealth specialist and managing partner of YouGov, a marketing research and survey firm who said, “ The very wealthy are often the ones pulling the trigger right now, and they have a very big trigger.”

How many are in this financial stratosphere and what’s their fortune? The 16,000 families in this category have fortunes of at least $111 million. And, parenthetically, they’re also buying double digit million dollar condos and houses and art. Not surprising the art world continues to break records. If these ultra rich have to fly commercial – pardon the expression – there are new facilities for them as well. Eithad Airways’ A380 has a $20,000 suite with three rooms and dedicated butler and within no time of its being announced,  its 10 initial flights were booked.

To be sure, this is a limited market in terms of the numbers. But then again, with the markups and commissions to be had, you sure don’t have to sell a lot to make a good chunk of change.

 

 

Culinary Tourism Trends: What’s In and Out

Eat With ; Hummus Brunch with Naama Shefi & Noam Bonnie ; Photo By: Eilon Paz

Make no mistake about it, culinary tourism is booming. It’s now a mature special interest category which brings with it higher expectations for novelty, creativity, and innovative offerings. Cooking and mixology classes, food and wine pairings, and food festivals seem so, well, yesterday. Here’s a look at what was and what’s now.

 

THEN NOW
Cooking classes Behind the scenes with the chef
Wine tastings Hot sauce or other specialty food tastings
Eating local Eating with locals in their homes or outside venues (e.g. mama cooks, eat with a local)
Group food tours Personalized dining itineraries based on food preferences, traveling configurations, budget
World’s Fair with Food Courts Food themed world’s fair (Milan Expo 2015)
Chef driven menus Crowd sourced menus
Dining as party Dining and conversation (“silence is the new luxury”)

 

And in the category of dining trends, it’s important to not leave out gluten free. Any major restaurant has to cater to the needs of gluten free diners. Not only is it expected, but the absence of sensitivity to these special needs loses business and also makes a statement about service.

It’s interesting that in two restaurant visits in Miami in the past 45 days, one to a multi million dollar upscale restaurant operated by an international group, there were only two items on a multi page menu for gluten free. I was with a group of 8 and the diner walked out. In another case, another high-end restaurant, the waiter and kitchen staff had obviously not been trained about this special needs group. Take note!

Photo courtesy of Travel and Leisure

 

Behind the Scenes Travel Experiences

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It’s natural to think, who would be interested in a behind the scenes look at the engine room of a cruise ship? Or a look at the housekeeping department of a hotel? The answer, a lot of people. One of the favorite pastimes of cruise ship passengers at Carnival is the engine room tour.

In this day and age when all surveys point to an interest in travel experiences, certainly up there at the top are opportunities to see what is happening behind the scenes. This works not only for travelers, but also, for luxury brands in particular. It’s an opportunity to demonstrate craftsmanship, artisanry, expertise. A company that really gets the value of this is LVMH. And when they get behind a concept, they go all the way.

Case in point, in 2011 they launched what they called Open Days in which 25 of their brands from Dior to Dom Perignon opened their usually closed ateliers to the public. Tickets were free, but reservations were necessary. As reported in the New York Times, in year one 6,000 spaces allotted for Louis Vuitton’s workshop in Asnieres were taken within 90 seconds of release; for the Christian Dior Couture atelier it took 3 minutes to fill. They wrote, “From Paris to Poland, where Belvedere vodka is based, some 100,000 people attended the first open atelier weekend. Last year, the total was 120,000 and a third weekend is planned for 2015.”

This is obviously a low cost/no cost initiative and one most products and services could be able to do. Love to hear any behind the scenes offerings you do at your firm.

Photo courtesy of www.nytimes.com