The latest Luxury Travel Market report shows that luxury travel is increasing with a compound annual growth rate of 6.4 percent, leading the industry to $1.2 billion by 2022. With significant trend changes and growing interests in longer trips, adventure and experiences – the face of luxury travel is evolving. Though baby boomers still lead the way for the luxury travel market, spending in high numbers and with multiple visits per year, a thrill-seeking upper middle class helping to redefine the industry.
According to Allied Market Research, baby boomers are creating the most growth within the market due to their disposable income and savings and interest in travel along. They also aren’t bound by the health constraints those 70 and up see. Travel is the most popular leisure activity for this generation, with Europe and the Caribbean as the top preferred destinations.
Graph from Allied Market Research
Priyanka Bisht, research associate at Allied Market Research told Luxury Travel Daily, “The global luxury travel market is expected to garner $1.154 billion by 2022, registering a CAGR of 6.4 percent during the forecast period 2016-2022. Luxury travel market epitomizes most desirable destinations, luxurious accommodations, convenient transport facilities and authentic travel experience. Luxury travel aims in giving exotic experience to its travelers,” she said. “Private jet planes, spas, special menus, private island rentals and private yacht are some of the unique services offered to the luxury travelers.”
No longer strictly for the elite consumer, luxury travel is also expanding to the middle class who are seeking experiences over basic experiences and many hospitality brands are working to attract these customers. With a growing interest in adventure-type vacations, affluent and upper-middle class consumers have shown a likelihood to spend more money on exciting experiences.
Top hospitality brand, Ambercrombie & Kent is working to appeal to the upper-middle class and is providing a wide array of experiences by renewing its partnership with Land Rover, luxury travel company and British Auto-maker, to offer guests a new list of seven self-driven “off the beaten path” trips around the world.
These types of collaborations allow brands to generate more attention from a wider audience and work with other like-minded brands to establish partnerships that curate new and interesting options for consumers.
With consumers also becoming more invested in longer vacation stays overseas, new and off-the-grid locations are dramatically increasing in interest with adventure seekers and affluent families as well. The 2017 Virtuoso Luxe Report showed that Cuba is a highly sought after destination right now, and Iceland has recently jumped up as a coveted vacation destination, ranking second for most desired location to Cuba.
“The luxury travel industry has emerged as one of the fastest growing sectors to contribute significantly to global economic growth and development. Growth in disposable income and increase in upper middle class expenditure has raised the demand for higher service standards. To capitalize the same, market players formulate unique strategies to target the growth in middle class segment; for instance, hiring qualified individuals who can speak international languages and communicate easily with travelers. This rise in demand for unique travel experience offers tremendous opportunists for the market players to remain competitive,” – Priyanka Bisht, Allied Market Research