Luxury Goes Undercover

In nearly all aspects of luxury travel, understated is now the rule. Rather than a bottle of free Cristal or a mammoth plasma TV—now standard in even midpriced hotels—sophisticated travelers prefer the thoughtful touches: a bundle of fragrant local flowers left on the back seat of their car upon departure, a surprise trip to the concierge's own favorite local haunt or the recipe for a favorite dish printed up and left with their bill. "It's all about 'being' versus 'having'," says Jacques-Olivier Chauvin, CEO of the small high-end hotel group Relais & Chateaux.

Not surprisingly, there are a host of new companies springing up to help the wealthy "be." The education of a new breed of domestic workers—butlers, maids, personal chefs and wine stewards—has be-come a cottage industry, and training centers like the Starkey International Institute for Household Management in Denver, Colorado, are booming. Students learn things like how to best serve the low-key, self-made owner of a $10 million Jackson Hole, Wyoming, fishing shack, who may prefer burgers on the deck with the kids rather than three-course meals on fine china. PinnacleCare medical concierge service not only advises on health but can also secure hard-to-get appointments with a coveted fertility expert or cancer specialist. Family Office Exchange brings together the growing number of family investment officers around the world to exchange stock tips and trade references for top lawyers or brokers.

This trend of the rich servicing the rich will only grow. Already, many new niche luxury brands are being started by socialites who have the most intimate knowledge of what their peers are looking for. The Luxury Institute's Pedraza expects that the scions of today's wealthy families will be the ones to launch tomorrow's private-jet management companies and new Web sites catering to the affluent; already there are a number of closed-door sites (including one run by the Luxury Institute, which vets members by wealth) where the world's richest people can exchange everything from restaurant recommendations to business plans. "The rich will increasingly exist in gated, private communities, online and offline," says Pedraza.

But there is an encouraging backlash to this somewhat disturbing trend: when you can have anything you want, the most discreetly fashionable gesture of all, it turns out, is giving it all away. There has been a sharp rise in philanthropic giving among the growing crop of younger financiers and entrepreneurs, often via their own namesake foundations. It's perhaps no surprise that a recent HSBC luxury-goods research report contained a graphic of American psychologist Abraham Maslow's famous hierarchy of emotional needs. After all, some of the most successful luxury launches in recent memory (American Express's Red Card, Bono's green clothing line) have been linked to higher causes. "The future of luxury will be about imparting real meaning into a product," says Elixir's Zauder. It's anybody's guess what the next generation of luxury products and services might look like. But if it touches a mogul's heartstrings, you can bet it'll be expensive.

© 2007