Households with incomes $100K - $249K seek luxury experiences and have similar expectations to households with $250K+ incomes.
When you sell luxury, focusing on customers who make $250K or more per year is a safe, understandable, and successful business plan. The “if it’s not broken, don’t fix it” ideology can be a good strategy, until it’s not.
That somewhat arbitrary $250K+ income threshold may be holding some brands back from targeting a wider audience, thereby limiting their overall sales.
Our study revealed that people who view themselves as luxury travelers are very similar, regardless of whether they make $100K or $250K+ per year.
They want the same things.
They have the same expectations, desires, and motivations.
They exhibit a lot of the same behaviors.
On that front, then, it makes sense to target both the lower income ($100K - $249K+) and higher income ($250K+) luxury travelers. You might not get everyone in the first group, but you might get some.
Objectively, there is a substantial difference between $100K and $250K+ incomes. It might not be as large as it seems, though. When you factor in family size, where people live, and what their household expenses are, there may not be much difference in disposable income.
It all comes down to prioritization. Some luxury travelers in the lower income level may put a greater emphasis on luxury travel experiences as a way to relax, unwind, and enjoy life. In this way, luxury travel may be more about mindset and less about income.
If people have that mindset and are willing to spend money to have luxury experiences, then why not let them spend?