Forget about the fussing of the American West or your solitary local vacations — Americans are ready to head back to Europe, and they’re doing so in a big way. Gone are the days of pandemic-proof travel; Instead, travelers are gearing up for a visual summer filled with socializing and big spending.
Says Jacqueline Sienna India, founder of the membership-based luxury travel company Sienna Charles, whose customers are valued at $500 million or more. And in the hunt for the most expensive reservations, from grand hotel suites to extended yacht charter cruises, Americans are helping to solve a problem that has worried many in the travel industry this summer: the lack of those who usually spend the big tickets, the Russians.
Tourism was of course strained during the pandemic, but with restrictions now loosening in top destinations around the world, people are back to their favorite favorite destinations. Despite the raging and devastating war in Ukraine, wealthy travelers are not deterred from going to Europe in particular. Mediterranean regions such as the Cote d’Azur, the Amalfi Coast and Spain are preparing for an influx of tourists, mostly Americans, who are coming in droves with their wallets open.
Notably absent, of course, are wealthy Russians, including many home-owned oligarchs throughout southern France and Italy. Russian billionaire Roman Ambramovich, for example, owns the historic Château de la Cröe, which has already been seized by the French government, and many luxury yachts owned by individuals affiliated with the Kremlin have also been seized. While they represent a low part of total tourism in actual numbers, wealthy Russians have long accounted for a lot of spending in places like Monaco, Saint Tropez, Portofino and Amalfi. Now, this role is filled by Americans.
“Americans are the new Russians,” says Jack Eazon, founder of luxury travel agency Embark Beyond. “They’re filling Mediterranean hotspots with ridiculously inflated rates, and they just can’t seem to get enough of it.”
India adds that wealthy Americans are “spending money like it’s outdated”. They collect the best suites, yacht charters, and the most expensive experiences that wealthy Russian clients may have booked in advance. Case in point: Two of her wealthy American clients are spending over $2 million on yacht rentals in the Mediterranean this summer, and a separate American family just booked a grand suite in Monte Carlo for $30,000 a night at the upcoming Monaco Grand Prix.
“Spending is up anywhere between 25 percent and 60 percent for the same vacations that clients have booked over the past three years,” she says. “They want what they want in terms of the best wings, experiences or the best tickets for events like the Monaco Grand Prix, Art Basel or the Open.”
Eazone notes that people want to travel to familiar places they haven’t been able to go for the past two years. He also discovered that hotels are increasingly popular compared to villas, which have been more desirable in recent years thanks to their secluded nature. “This year people want to be with the people,” he says, adding that clients have been looking for hotels all over the Mediterranean such as Hotel du Cap-Eden Roc, Hotel Santa Caterina, Le Sirinos, Borgo Santandria and Grand Hotel du Cap- Virat.
He says there was initially great concern from hotel owners, managers and salespeople about the fallout from Russian tourism after the start of the war in Ukraine, particularly in destinations such as Sardinia, Monte Carlo, Cannes, Paris, London and Milan. But with the demand for travel soaring, Americans are spending up to three times more on an average hotel room. Rooms that were priced at $3,000 a night, for example, will now be closer to $6,500.
“Getting a hotel room in the top European destinations this year is like getting toilet paper in a supermarket during Covid,” laughs Eazone. “They are so desperate to take it that no one asks questions about prices.”
However, some hotels that were not expecting this demand fall short in terms of good staff and service. “(Guests) know they’re getting a lower value service experience, but they don’t care,” says Ezon. “They desperately need to go. For luxury travelers, a pilgrimage to the Mediterranean is summertime. At this point, customers are so numb to the inflated prices that they are absorbing them.”
There are, of course, benefits from an influx of revenue from American customers (and an increase in Brazilian and Middle Eastern travelers), but some local businesses that rely on large chunks of Russian money in the summer will still suffer a loss. Jean-Noel Aimasu, a luxury private chauffeur on the French Riviera and owner of the Kingdom Côte d’Azur, says his wealthy Russian clients spent at least $215,000 in two months for auto services over the summer. The Russian oligarchs who own homes here, including Ambramovich, Suleiman Karimov, Andrei Melnichenko, Alexander Ponomarenko, and Viktor Rashnikov, also provide jobs for employees in their homes, catering companies and local restaurants, and generate revenue for yacht ports.
“The yachting trade was tough,” says Eazon. “About 30 percent of the yachts are now out of the charter market because they were owned by Russia. This has actually led to more pressure in the Mediterranean this summer, driving up rental prices, and a rush to find a great yacht.”
International yacht charter company IYC says bookings for 2022 have surpassed those of 2019, but local agencies are spooked this season. Headquartered in Cannes, the Liberty Yachting Agency helps luxury yachts stop in ports, save fuel, and transport, and manager Fabrice Viard says 30 percent of the 1,500 wealthy Russian families who frequent Monaco have returned to Russia, and their yachts do not exist. Anywhere near the city. French Riviera. However, he remains confident that the increase in yacht charters from American customers, who he says make up the majority of the yacht charter market, will provide him with good business this year.
One booming luxury category is private aviation, which has seen a 300 percent increase in new customers as a result of the pandemic. Global airline VistaJet, which operates in more than 182 countries and specializes in ultra-long-haul aircraft, has achieved a 93 percent year-over-year increase in annual total hours sold.
While many companies struggle to provide available planes and hours for their members, VistaJet has been strategically acquiring new companies over the past few years to increase its fleet and accommodate new and existing members. The company owns 10 percent of the world’s largest aircraft, including the Global 7500, which can fly non-stop on routes such as Abu Dhabi to Washington, DC.
“In the past, a large percentage of our customers would fly the long portion of their journey commercially in first class and then commute to VistaJet to reach their final destination, but now we’re seeing a trend of people traveling exclusively private,” says Leona Key, president of VistaJet US, who adds The United States now represents 40 percent of its customer base.
Even India says many of its customers have been looking to buy planes too, as tax breaks for the wealthy have spurred asset purchases. Eazone says he also books a lot of private jets and helicopters within Europe to final destinations like Mallorca, Ibiza, Sardinia and Mykonos.
Another country that attracts Americans more than usual is Switzerland, where many combine mountains and the Mediterranean. Switzerland has always been a desirable destination for wealthy Russians, especially for those who come for plastic surgery, general surgery, or other health and wellness related services.
“For Russians, Switzerland is a status symbol,” says Aurelia Carlin, Market Director of the Americas at Zurich Tourism. “Traveling here means that they have money and that they are successful in life in business. The quality of our lives is very high, and Switzerland is famous for the quality of the service we provide.”
As in southern France, the total volume of Russian tourism in Switzerland is low, but it brings significant purchasing power, says Karlin. But without much of it, she says, Americans are booking the best hotels and suites in Zurich — and for longer, on average, than ever before.
“Travel is an indication that life is getting back to normal,” Ezon says. “Wealthy travelers can fly from the Hamptons to the Mediterranean, feeling their lives can resume.”