Luxury tourism

Differentiated service has been a long-standing tradition in the airline industry which introduced three (and sometimes even more) price classes for first, business, and economy. While the last category is sometimes given fancy names like "fiesta" or "coach," the first two are unabashedly descriptive of their target niches. This upscale service offers amenities like a lounge with showers and shorter queues, along with a higher luggage allowance and better wines.

In his book Undercover Economist (2006), Tim Harford, a columnist ("Ask the Economist") of the Financial Times, writes of this differentiation and luxury niching from coffee to software packages. He maintains that marketers are able to promote price differentials for the same service often by intentionally degrading the basic (i.e., cheapest) alternative. Pre-departure areas for coach offer limited seating and uncomfortable chairs. Economy passengers are also barred from exiting the plane ahead of the upper classes. This stark difference then makes premium pricing easier to accept.

This strategy of lowering the product properties of the cheap alternative to push the customer to the premium-priced option is not possible in the hotel business. When a hotel offers only suites, it signals its intention to cater only to the elite market and its pricing will reflect this. Thus, the look and amenities of the accommodation justify its rack prices.

Luxury service, with its matching pricing, is rare enough in the Philippines, used as we are in looking at goods and services like a Dutch auction where the price keeps being bidded down until there is a taker. The bargain mentality is strongly rooted in our psyche.

Is it possible then to create a luxury market for tourism? The bargain hunter will rationalize his cheap lodging with the thought that a resort room is just for sleeping in. One does get access to the same beach and dolphins to watch, after all.

So, is there a clientele willing to pay 15 to 20 times the budget room rate in one particular place to experience luxury tourism?

I didn’t think so until I was treated by my son to a luxurious beach weekend in Panglao in Bohol, a place I have not been to before as I do not count myself as a beach person. Salt water and sand on my toes do not constitute my idea of Heaven.

But from the moment I step out of the luggage claim area to the waiting van of Eskaya Hotel, it is like being transported to a parallel universe. There are cold face towels offered and ice-cold bottled water in the van. At the reception, the flower leis await as a golf cart whisks us away to a table with coconut juice on its shell.

But what about a view that looks out to the infinity pool and farther to the sea and a functioning bar for swimmers? A sense of shock and awe (of the pleasant kind) passes through the mind — am I still on one of our 7,100 blessed islands? This parallel universe does not fade away when we are ushered into our room, which has its own pool and bamboo grove just three steps down from a veranda.

The 10 villas that make up the resort are designed with a distinct Philippine architecture, using a high ceiling and bamboo beams and tall windows looking out to the wooded surrounding.

A verdant setting leads to the beach. At all times, the staff combines precision and thoughtfulness — do you want to have a bonfire and dinner at the beach? Housekeeping is invisible and intentionally unobtrusive, making up the bed and laying out the incense while guests are out.

For a self-confessed Baguio lover who forgets to pack sun-block lotion in his infrequent forays to the beach, Panglao to me now is a synonym for elegance and pampering. And with a spa coming up shortly with waterfalls and a view of the ocean, the setting is complete.

Luxury tourism seems here to stay.