After the Cultural Revolution caused poverty, the 1980s saw the emergence of “revenge spending” in China. As stay-at-home orders eased across China in the past few months, researchers have reapplied it to the resurgence of luxury spending. The wealthy in Guangzhou responded by easing their quarantine blues by splurging on luxurious products.
The current pandemic has revived this mentality in spades across the globe in travel as many countries are now easing their travel and quarantine requirements. This article will explore what is revenge travel and how it will impact luxury travel.
What is Revenge Travel?
A popular term in the United States, revenge travel describes the idea of a huge increase in travel once we are given the green light. Since last year’s holidays were altered, most people have not gone on vacation.
In revenge travel, the goal is to take revenge on Covid for ruining so many people’s holidays. We can expect a boom in bookings once countries open up to each other.
There is already a return of confidence in the travel industry, and an increase in vaccinations is only fueling the fire as people prepare to travel again. Many of us seem to have revenge travel on our minds after more than a year of waiting patiently.
The Holiday Boom
Covid cases are likely to decline further as vaccination uptake continues. The surge in bookings could be a result of people realizing that things can change so quickly and making up for lost time now.
EasyJet recently announced that flight bookings have increased by more than 300 percent, while holiday bookings have grown by more than 600 percent. Travel appetites aren’t just strong, but people seem to be itching to travel.
They have the opportunity to return to normality through travel, which is crucial for that. The pent-up demand from travelers is ready to be released, as they are already planning their next getaway with more confidence and revenge against Covid on their minds.
Playing It Safe
People will sometimes travel far and wide as revenge, but others may prefer to go on holiday more conservatively. As people search for the sun in Europe following Covid, expect to see more trips there soon.
Spanish, Greek, Portuguese, and French holidaymakers are aching to rekindle their travel love affairs. The top destinations for first-time travelers are likely to be these countries.
To rekindle their travel lust, holidaymakers can look for affordable getaways closer to their homes. Then, once normality sinks in, people will start planning more adventurous trips, resulting in longer trips.
How Will Revenge Travel Impact Luxury Travel?
This repressed desire to travel could spark a trip of revenge that leads you to luxury escapes. A year after restrictions, avaricious travelers could splurge on their first trip abroad. Because of this, having flexible payment options can be essential to making sure you travel in style. To spread payments, more people turned to flexible finance during the Covid period.
Are we about to see a decline in travel appetite? It’s not a sure thing. Once again, the human spirit of contradiction makes you yearn for what you cannot have. Towards the end of 2020, when the first wave of consumers had subsided, wealthy buyers began to spend lavishly. There will be a wave of travel this summer or later when the borders re-open for travel. There is a pent-up demand for “flights to nowhere” as an example. Which leads to revenge travel.
Luxury Sales & Travel Demand
Travel demand and luxury sales often appear to be positively correlated according to observers of the luxury industry. You tend to feel guilty about not buying something special for your spouse and/or children after you’ve been away for a long time as a business traveler.
As well as shopping in Hong Kong, Japan, and Continental Europe, Chinese consumers would also spend a lot of money on luxury products that are more affordable than in mainland China. After the pandemic, as I explain in Future Luxe, the equation may actually be a bit different. You might be better off thinking of travel as a competitor to luxury (from a budget perspective) rather than a positive factor. Luxury tourism has enjoyed huge benefits, notably in the USA and China, from ‘staycations,’ and now the luxury sector is going back to basics.
Revenge Travel and The Luxury Spending
Rather than spending money on expensive air travel, hotels, Michelin star restaurants, and other services abroad, consumers spent their money on other things at home. So, many think of revenge travel as a kind of transfer from experiences to products. As soon as the world reopens, some budgets might not be able to expand and you might have to choose between that trip you’ve been longing to go on and that handbag or watch. You might have to reorder some of your priorities if you don’t use them for the same purpose.
In a world where restaurants, nightclubs, cruises, and hotels are open for business, imagine what we would experience if we were to live in another Roaring Twenties period. There will be many substitutes for traditional luxury items. It is probably because of this that the LVMH group had purchased RIMOWA, a luxury luggage manufacturer, and Belmond, a luxury hotel chain before acquiring Tiffany. Try to capture some of the consumer’s wallets differently, if you aren’t going to sell her another bag.
It shouldn’t matter whether people spend money on experiences or personal goods, say the optimists. Are you getting ready for a night out at a club or a cruise? As a result, while there is still pressure on personal products during a rebound in travel, the benefits of the world being closed are evident.
Bottom Line
The top takeaways based on all we discussed are:
- Although we are not sure whether or not the word revenge is the correct term to use in this case, pent-up demand should be seen in travel spending once the world re-opens, just as there was in luxury sales before the recession.
- Travel continues to be affected by COVID-19 infection waves of varying depth and extent, but this does not mean consumers do not wish to travel, quite the opposite. Expect a boom in luxury travel and spending!
- When the pandemic-related crisis has passed, luxury products and travel will compete for consumers’ wallets as they have been forced to stay indoors, and budget for necessities ONLY for so long.
