The global luxury travel market is estimated to grow at an annual rate of around 5.7%
The luxury travel market is expected to grow significantly in the coming years due to the increasing number of high-net-worth individuals and strong economic growth in developing countries.
According to research conducted by Euromonitor International, the global luxury travel market is estimated to grow at an annual rate of around 5.7% and is forecast to reach a value of US$ 589.5 billion by 2022.
This growth is being driven by rising demand for high level of comfort and personalized services in travel, as well as an increase in the number of luxury travelers seeking unique experiences and authentic destinations.
In addition, the growing trend of exclusivity, as well as sustainable and experiential travel, is expected to boost the market over the forecast period.
According to estimates, the global luxury travel market Luxury travel market expected to reach $1,614.6 billion by 2026.
Prime determinants of the market
Rise in inclination toward exotic holiday experiences, surge in middle & upper middle-class spending, trend of online booking, and increase in impact of travel industry drive the growth of the global luxury travel market. However, varying socio-economic situations and impact of natural disasters hinder the market growth. On the other hand, demand for enhanced service standards and emergence of new destinations create lucrative opportunities in the industry.
Adventure and safari segment to maintain its leadership status by 2026
Based on type, the adventure and safari segment held the largest share in the global luxury travel market in 2018, accounting for more than two-fifths of the total share, and is estimated to maintain its leadership status during the forecast period. This is due to inclination toward transformative and engaged activities. On the other hand, the culinary travel and shopping segment is expected to register the largest growth rate with a CAGR of 9.7% from 2019 to 2026, owing to surge in outbound travel, eagerness for gaining unique dining experiences in various countries, and organization of many festivals and events.
Millennial segment to grow at the highest growth rate
Based on age group, the millennial segment would grow at the largest rate with a CAGR of 9.5% from 2019 to 2026, owing to inclination of millennials toward wanderlust and breaking life’s monotony, short trips to culturally rich and different countries, and local shopping. On the other hand, the baby boomer segment accounted for around two-fifths of the total market share of the global luxury travel market in 2018, and is estimated to maintain its highest contribution during the forecast period.
North America to grow the fastest
North America is estimated to register the fastest growth rate with a CAGR of 11.4% from 2019 to 2026, owing to increase in the international spending on travel, availability of ranches and spa retreats to private islands, and presence of established and highly exclusive resorts. However, Europe held the major market share, accounting for nearly two-fifths of the total share of the global luxury travel market in 2018, and is expected to maintain its leadership status during the forecast period. This is attributed to preference for customized and private vacation and cruise/ship expedition and surge in number of travelers in countries such as Greece, Spain, and Turkey.
Four keys for growing luxury travel in your city
1. Invest in Technologies That Make Travel Easier: Investing in the latest technologies can make it easier for luxury travelers to plan, book, and experience their trips seamlessly. Technologies such as artificial intelligence, machine learning, and data analytics can help travelers easily search for, find and book the perfect luxury tour.
2. Develop High-Quality Experiences: Loyalty programs, exclusive destination packages, and private airport transfers are just some of the ways luxury travelers can enjoy their experience. Developing high-quality experiences can help make luxury travel more desirable to potential customers.
3. Promote Destinations: Luxury travelers are interested in destinations that offer a different experience than the average tourist. Focus on promoting unique and interesting destinations that will appeal to luxury travelers.
4. Focus on Quality: Quality should be a priority when it comes to luxury travel. This extends to everything from hotel rooms and services to car rentals, tours, and activities.
