Challenges of luxury travel market addressed by API panel

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NEW YORK -- A panel of luxury travel experts said Y2K issues, unrest in Kosovo and Africa and millennium celebrations are all posing challenges for the luxury travel sector.

At the same time, however, the panel, conducted by the Fort Worth, Texas-based luxury travel consortium API Travel Consultants, underscored the growing demand for luxury travel amid consumers' changing expectations of what such products should deliver.

Larry Pimentel, president and chief executive officer of Cunard Line, said events in Kosovo have made some consumers balk at the prospect of European travel. He added that his company must constantly correct consumers' ignorance about the distances between war-torn Kosovo and other areas.

"We had some people who didn't want to do a Norwegian fjords cruise because of Kosovo," Pimentel said. "We are having to fax daily to potential guests maps of the eastern Mediterranean and surrounding areas overlayed atop a U.S. map to give them a perspective on where things are."

Peter Tauck, co-president of Tauck Tours, said growth in bookings to Italy and eastern Europe has been less than anticipated, but there is a positive side to the Kosovo situation. "My reservations people have been taking new bookings from people who think it's a great time to go when everybody else is canceling."

Matthew Upchurch, managing principal at API Travel Consultants, said the Dow Jones index has more bearing on consumer travel spending than world events. "Babyboomers don't see travel as a luxury, but rather as a part of their being," he said.

Alistair Ballantine, president of Abercrombie & Kent, said bookings to Africa have picked up in the last few weeks, although violence there has kept bookings "soft."

The panelists said their companies are addressing Y2K concerns; however, problems are likely to arise in less developed destinations. "Will you have water and will the telephones work [overseas] after midnight New Year's?" said Douglas McKenzie, vice president/luxury brand management for Starwood Hotels & Resorts Worldwide.

Upchurch said federal laws to limit the liability for such incidents would be "the greatest test in the world for the concept of personal responsibility." But there are other, intrinsic challenges in selling luxury travel, said Upchurch.

API Travel Consultants spent three years conducting research of 800,000 households and found consumers have widely divergent ideas about luxury travel.

"More than ever, it is incredibly tough to market to this sector," Upchurch said. "The definition of luxury used to be opulence. Today, it means anticipating and meeting the emotional, physical and mental needs of the vacationer," he said.

But the time is ripe for selling such products because the wealthiest market, baby boomers, have said they would rather spend their money on travel than anything else, Upchurch said.

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