The Global Luxury Travel Market is expected to generate $1,154 billion by 2022, growing by at least 6.4% (CAGR) annually over the next six years, according to a new report published by Allied Market Research. In 2015, North America and Europe collectively accounted for around 66% of the overall travel market revenue.
Growing preferences for unique and exotic holiday experiences, rise in middle and upper middle class spending and the increasing impact of social media on the travel industry are the key factors marking this growth. Then we are seeing that emerging new destinations now adopting rising service standards in the travel industry are helping to drive the demand for luxury travel, globally.
Key Findings in the Luxury Travel Market:
- In the year 2015, adventure and safari segment led the overall luxury travel market revenue, and is projected to grow at a CAGR of 5.8% during the forecast period.
- Adventure and safari is the most sought after tour type, with travelers from Europe, Latin America, and North America, comprising 78% of overall international departures in this segment in 2015.
- The millennials age group segment is expected to grow at a CAGR (compound annual growth rate) of 8.1%, owing to a rising popularity of travel among this generation and the fact that they travel more often than the other generations.
- Absolute luxury traveler segment is projected to generate largest revenue in the luxury travel market.
- Asia-Pacific is estimated to witness significant growth during the forecast period (2016 to 2022), with China being the major stakeholder.
- The adventure and safari segment accounted for about 44% of the overall luxury travel market revenue, by tour type in 2015, as this is identified as the most popular vacation option among young and middle age group travelers.
- Tours aimed at culinary and shopping experience will witness the fastest growth, registering a CAGR of 7.8% during the forecast period. An increasing number of luxury travelers are indulging in these tours as they enable these travelers to experience the finest local delicacies and also buy some of the most exquisite handicrafts. These trips are getting popular among travelers of all age groups, especially the Millennials (21 – 30 years). In 2015, approximately 70% of Millennials took a trip based on culinary interest.
Luxury Travel in the Baby Boomer Market
The Baby Boomers segment is projected to hold the highest market share in the overall luxury travel market, by age group, as they have been identified as the highest travel spenders. According to industry sources, about 68% of the disposable income in the U.S. is controlled by Baby Boomers and they are estimated to inherit $15 trillion in the next 20 years. Interestingly, only 5-10% of marketing dollars are targeted at this traveler segment.
Absolute Luxury in Mind
High spending power and search for exclusivity with high comfort and first class facilities are the major factors that promote the demand for luxury. These travelers take at least three to four luxury trips in a year. Regionally, Asia/Pacific’s luxury travel market would exhibit the fastest growth owing to the rise in number of middle income groups. Within Asia/Pacific luxury travel market, India is estimated to register a growth of 12.3% from 2016 – 2022. Europe and Caribbean would continue to be the most preferred luxury travel destinations. The most popular luxury travel destinations in Europe are identified as Germany and Italy. Paris is the leading global metropolitan destination and witnesses nearly 18.8 million international arrivals yearly. In LAMEA, Brazil continues to show a promising potential and is predicted to become one of the top-five global economies by the middle of this century. As per the tourism statistics, tourist arrival in Latin America has observed an increase of 50% in the past decade.
Key players profiled in this report are Abercrombie & Kent Ltd, Cox & Kings Ltd, Micato Safaris, Ker & Downey, Tauck, Thomas Cook Group, Scott Dunn Ltd, Kensington Tours, and Butterfield & Robinson, and some players in the value chain –TUI Group, Zicasso, Black Tomato, Backroads, Lindblad Expeditions, and Exodus travels.
More information on the luxury travel market here.