Experience is the new luxury

Hans Lagerweij has seen expedition travel transform from a niche sector, to the pinnacle of every Instagram-ready traveller’s social story. The President of Albatros Travel International shares his insights about the changing sector, how to pivot to meet new consumer demands, and why travel should become more sustainable.

Can you tell us about your current role?
I oversee Albatros Travel International which is made up of four different businesses. The Scandinavian inbound companies are managed by Danish entrepreneur and biologist Soren Rasmussen and his family. I manage the international businesses for them, including products in Greenland and Africa.

You’ve worked in the travel sector for more than a decade – how have consumer demands changed in that time?
The biggest change I’ve noticed in the last ten years is a move towards experience-related products. There have been plenty of studies predicting the “experience economy”, and a move towards this rather than luxury goods. It’s so visible in our industry. When I started it was a segment that was 2-star, maybe 3-star. It was not about comfort, but about discovering new countries and areas away from mass tourism and the standard beach holiday or big cruise ships.

Over the years we saw interest coming in from the top end of the market. People with money simply got bored of the products designed for them – traditional luxury hotels in traditional spots: cruises, shopping trips in Hong Kong, shopping trips in Singapore. This new customer entered our experience market, and as a result operators had to upgrade, get better expedition ships, look for remote locations with hotels there (but not hostels). This trend is continuing, and traditional luxury operators are entering this market segment.

"There have been plenty of studies predicting the “experience economy”, and a move towards this rather than luxury goods."

Hans Lagerweij, President of Albatros Travel International

What kinds of investments are we seeing as a result?
The luxury river cruise company Scenic in Australia just launched its 6* expedition vessel, with helicopters, submarines, and all the toys and features the top end need. It’s a fascinating development. The expedition cruise industry is expected to grow by 30-40% in the next few years. The industry has more than 40 ships on order for the next few years.

What are the biggest markets for this sector?
Customers are coming in from China – it’s the biggest outbound travel market in the world, bigger than the US or Germany. With the US and Europe, the majority of the market is still looking for a beach holiday. Experience travel is niche in these countries. Chinese travellers want experiences and get bored on the beach, and younger generations with a lot of money want to go on hardcore expeditions but with today’s comforts.

What is considered a ‘hardcore’ expedition?
The most famous is probably the Antarctic. If you do a study in the UK on which travel destination is your ambition in the next ten years, Antarctica is probably mentioned by 2-5% of respondents. It’s far away and niche. Three years ago, in a similar study in China, 35% said Antarctica. The Chinese are more ‘doing’ orientated. One element of this is the culture. Travel has become a lifestyle product – it’s a product to show off your identity. And how do you show off your identity? With the ultimate picture of you in a very unique place. We’ve seen this across cultures, and it’s resulted in people sharing thousands of images on social media of them standing in front of an iceberg.

How has social media transformed the industry?
The growth of Instagram, and previously Facebook, has been a major driver behind this experience travel growth. People on one end show off their unique experiences, and at the same time that inspires thousands of others. Influencers are inspiring their followers with new experiences. For the travel industry, they are far more important than a TV or print advert.

How has the sustainability trend impacted the travel sector?
Our customers are well-educated, well-travelled and usually less conservative. For them it’s important to improve on sustainability and feel less guilty about flying or cruising to destinations. Messages brands give have become increasingly more important. There are lots of initiatives in the industry – cleaner engines, cleaner fuels, technology that lowers fuel consumption, removal of plastics, more sustainable foods, and non-toxic cleaning materials. At the same time, new luxury companies coming into our market are targeting the high end with new activities that might not be the most responsible ones.

How do you meet your consumer’s sustainability agendas in a genuine way?
Messaging and priorities are important. A new expedition ship was announced a few months ago – half the press release was about how sustainable and green and great it is, and half was about heli-skiing in Antarctica. This is absolutely concerning. I think you cannot do this – Antarctica is so beautiful and untouched by humans, we don’t want to create a ski resort there with noisy helicopters. Also, because activities are designed to attract the rich, there is a trend towards bigger cabin rooms on expedition ships. On the one hand this is needed – it used to be floating youth hostels with shared facilities. But if you create huge suites onboard these vessels, you actually increase the footprint per person. We’re making such good progress in the industry, but there are certainly opportunities to improve further.

Who is getting it right?
Intrepid Travel has sustainability in its DNA. It’s incredibly transparent about the negative versus positive impact of the organisation. They set an example in the industry and inspire other smaller companies to do better. Albatros won a travel award for sustainable travel back in 1995, when the majority of the industry didn’t know what sustainable travel was. We are a fast-growing, small company, and sustainability is in the hearts and minds of the organisation. It’s part of every decision we make, but that doesn’t mean we cannot improve – we should improve. It has to be genuine. Customers of today are well educated. As soon as they travel, they will understand if your approach is authentic or just your marketing department writing nice text.

What do the next five years look like for the travel industry?
If we look back to the last five years, we have seen tremendous growth, especially in niche segments. I think in the next couple of years we will see a pushback. Travel is always related to the global economy, and in the last five years we had the wind at our backs. It was easy, people wanted to have new luxury experiences and could pay for it. The limit was not the price of the product, it was your creativity and ideas for new experiences. The economy in China is slowing down, which has been very important in our segment. We will see a switch from new experiences at any cost, towards a more cost-conscious customer. The trend for sustainability will stay. We are already witnessing ‘flyer shame’ – companies need to explain to customers how they are careful about minimising emissions and negative experiences, while maximising the positives.

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