Finding Travel Opportunity and Value In 2009 Amid the Economic Slowdown
Gordon Dalgleish, co-founder and president of PerryGolf, a 25-year-old travel firm with offices in 12 countries, offers his thoughts on the state of the international golf and luxury lifestyle travel market amid current economic conditions.
Is the current economic situation testing the theory that luxury travel is recession proof?
I’ve always argued that we are somewhat recession insulated just by the nature of our clients. Our target group has an annual income of $300,000 and up. So there is some protection there. But the combination of the economic slowdown, presidential election and the market meltdown, when there was such wealth depletion over a fairly short period of time, has certainly had an impact, even with the best protected segment of the market.
How are luxury travelers adjusting their travel habits?
The analogy I draw is that the person with the $10 million portfolio woke up a few weeks ago with a $5 million portfolio. By any measure, he is still a wealthy person, but his mindset has clearly changed. And instead of buying that new BMW every two years, he might hold off. Instead of taking the three or four trips a year that he might normally take with his golf buddies or his wife, they take one or two. He lowers his spend rate until he sees where things may be going. It’s that mentality, coupled with the election and the uncertainty that goes with any election, that clearly has had an impact.
How is 2009 shaping up?
If you read the media, you want to slit your wrist; but you can’t overlook the fact that there are still a lot of people with money in the United States. The problem is that they are also reading the media and being very cautious because there is no consensus on when this is all going to end. There are still people out there who are buying trips and inquiring about trips and making plans. There is still activity going on, but it is nowhere near the level that it was before this current situation hit. Having said that, we are seeing some improvement each month over the previous. It’s not that fundamentally different a mindset than what took place after 9/11. But you can have a great trip in 2009 if you can get over the consumer confidence hurdle.
Have you found a silver lining yet?
Yes, very much. The dollar has strengthened against most other currencies, including the pound and the euro, and that is having a substantial impact on prices. If you look at the exchange rate from mid July, when the dollar was at 2.04 against the pound, to recently, when it got to 1.48 , that’s a dramatic swing over a very short period of time and well outside the normal trading ranges. That’s obviously good news for the golfer who wants to go to the British Isles. This is a fabulous time to travel for those who have the cash and the confidence to spend it.
What can firms such as PerryGolf do to make travel more affordable?
We’re in the process of going back out and promoting what we would consider special value trips that have come down in price in the past six months, principally because of exchange rates. We’re also trying to work closely with our suppliers to create value- added benefits. When you enter the luxury travel brand, it’s very difficult to start discounting and selling purely on price. It’s very much a double-edged sword. So you try to work with your suppliers to add value – include a dinner, a second round of golf in the afternoon or a bottle of wine at dinner. You try to add something that the consumer sees as great value without having to discount your prices. Our prices will come down, but that will be a function of exchange rates and not due to suppliers dropping prices.
Are there certain destinations that are going to benefit from this?
Because of the strength of the dollar, we will see some improved traffic to the British Isles. South Africa, which offers a combination of great golf, great wines and uncommon experiences that you just don’t get anywhere else in the world, is a fabulous destination that’s discounted fairly significantly right now. Courses in the south of Spain, Portugal and along the Mediterranean also should do reasonably well. Also, because of the relative strength of the dollar, Argentina, South Africa and New Zealand have some great deals right now.
Any advice to travelers?
I will be surprised if there are not some casualties among operators between now and next season. That means consumers need to be cognizant of who they are doing business with. An operator selling a package at a dramatically lower cost than other companies could signal the company is trying to raise short-term cash; that would be a red flag to me. Another area to be aware of is credit cards. Consumers should be wary of any operator that is unable to satisfy their credit providers of its financial stability.
About PerryGolf
Established in 1984, Wilmington, N.C.-based PerryGolf offers the travel industry’s most prestigious and diverse selection of luxury golf tours and lifestyle experiences to Scotland, Ireland, England, Wales, Portugal, Spain, France, Italy, South Africa, Australia, New Zealand and China. In addition small-ship and river barge golf cruises will respectively sail the Scottish shoreline in 2009 and the Rhône River through Provence, France. PerryGolf offers customized golf tour itineraries including a new portfolio of epicurean golf tours to seven different destinations. The company’s exclusive online trip calculator — Plan Your Own Tour™ — allows travelers to generate immediate quotations for trips they create entirely online. For more information on PerryGolf, please visit www.perrygolf.com or call a PerryGolf travel specialist at 800-344-5257 or e-mail Information@PerryGolf.com.
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