Luxury beyond luxury : understanding the nature and processes of customer value in ultra-luxury travel

Worner, Jennifer (2015-04)

Thesis (MBA)--Stellenbosch University, 2015.


ENGLISH ABSTRACT: This research study has sought to gain a deeper understanding of the manner in which the ultra-luxury travel sector interprets the concept of customer value and how they go about designing an offering of potential value to the customer. In turn, the study explored the manner in which the traveller extracts value from the offering. There is a definite element of ambiguity to the precise meaning of the word ‘luxury’. Researchers have traced its meaning and developed frameworks to define the type of value it offers to the consumer. Ubiquitous to the delivery of the luxury good or service, is the significance that an individual will attach to it. The consumption of luxury will always be an experience – in one form or another. With the passing of time and globalisation of companies, the luxury good has become ‘democratised’. This massification of luxury has resulted in layers of offering, appealing to various categories of consumer; from the connoisseur and consumer of rare, niche products, to the bling young professional sporting a designer bag. This has created greater debate around the definition of luxury. Further frameworks have been developed to identify the types of value within the luxury offering that would appeal to the different categories of luxury consumer. The process of value creation has evolved from a firm-centred model to one where the customer is central. The focus is on identifying customer needs, and then delivering them via the use of firm competencies and capabilities. The lens of the value creation process has widened to include means of identifying potential for firm value creation pre and post consumption of the offering. The luxury travel sector generates a significant spend. As an industry that is intensely customer-centric, it provides the perfect vehicle to examine how the industry seeks to understand the guest, and in turn, deliver value. A qualitative, multiple case study methodology was employed to examine four luxury properties in South Africa. Employees and independent consultants within the industry were interviewed. The results yielded a coherent message of passionate engagement with the product and the guest. The surprising element was the employee’s fierce commitment to the luxury asset and their pride in the owner. The element of sustainability featured strongly as, whilst every effort was made to give the guest a magical experience, this was not done at the expense of the underlying asset. There will always be an element of experience attached to the immersion in a luxury product or service and the luxury travel industry is no exception. Experiential travel has been a driving force within the industry for many years. As this evolves, the pressure to plumb greater depths of meaning and create significant shifts in ‘being’ has developed. The industry is ripe for creative collaborations and new partnerships in order to deliver life-long memories to the luxury traveller. Technology has been a disrupter within the luxury value chain and tour operators and travel agents find themselves competing with online travel agents. Those who survive are those who deliver highly personalised, creative and bespoke offerings. Social media is another area of potential innovation. The Millennial traveller will soon command the lion’s share of luxury spending. They are highly connected and desire authentic, fun experiences. Luxury accommodation has also suffered the ambiguity attached to the definition of luxury brands in general. The 5-star hotel which once commanded pride of place as the highest level of accommodation has been usurped by private luxury properties, boutique and destination hotels. The potential exists to apply the lenses of luxury value frameworks in order to provide greater clarity to the type of offering they deliver to the luxury traveller.

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