The Global Luxury Travel Market Size is Expected to Reach More than USD 2 Trillion by 2025

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11/7/2019
grandviewresearch.com

The global luxury travel market size was valued at USD 1.8 trillion in 2018 and is expected to expand at a CAGR of 4.6% over the forecast period. Increasing disposable income and consumer spending of middle and upper class, growing demand for accumulation of travel memories, increasing in micro trips, and emerging tourism and corporate industries across the globe are expected to drive the market.

Industry Insights

Growing traveler’s preference for personalized service, reliable transport, exclusivity, and positive and professional interaction with staff is setting the primary benchmark for luxury travel. Growing political stability across the globe regarding gender, ethnicity,sexual orientation, human rights, racism, citizenship, and less hustle in visa offering are influencing the people’s decision over potential travel destination. Long haul travelers are seeking to create their own unique holiday and are demanding flexibleitineraries for a combination of entertaining and relaxing travel. This personalization demand of the travelers is making their journey more convenient and full of experience.

Elite travelers are preferring to visit the unexplored destinations to gain experience and understand the new cultures worldwide. Moreover, they are planning unique trips that include cultural visit, cruising, and adventure activities putting experience over ownership. Travelers now care for access over acquisition and experience over possession, thereby contributing to the growth of the market. Micro trips the new trend in the industry is expected to boost the market in the forecasted period. Travelers are squeezing in more travel itineraries into shorter time frames. To stay and spend quality time during short getaways in unique and remarkable type of accommodation is expected to become trendy in the forecast period.

Furthermore, trend of online research has increased exponentially over the years, which is expected to fuel the market growth over the forecast period.  High tech rooms (smart rooms) are predicted to drive the demand for luxury room and travel over the forecast period, thereby giving travelers complete autonomy over the usage and engagement of the accommodation and travelling mode. Increasing use of internet and presence of social media are acting as a catalyst for the growth of the market. User generated travel content is more influential over traditional advertising. Moreover, travel storytelling over social media platforms like Instagram, Facebook, and blogging sites have increased exponentially.

Tour Insights

By tour, the luxury travel market is divided as customized and private vacations, safari and adventure,cruises, yachting and small ship expeditions,celebration journeys, culinary travel and shopping, and others. Safari and adventure accounted for the largest share of 35.3% in the year 2018 as luxury travelers are seeking more depth to understand local culture, sense of adventure, and less crowded environment. Personalized vacation aimed at safari and adventure is getting popular among all the age groups, which is surging the segment growth.

Luxury travel is not just limited to high-class accommodations, pools, and the most expensive furniture in the hotel room. Changing values, age, and attitude of the travelers have redefined the terms of luxury travel. Culinary travel and shopping is the fastest growing segment with a CAGR of 5.5%. Primary purpose of the culinary travel is to experience the unique food and drink of a particular region or area and understand the culture. Travelers are participating in cooking classes, retracing historical culinary routes, exploring wine, beer, and spirits trails, attending food fairs and festivals, and touring food plants and processing centers for exploration purpose. Growing popularity of cooking programs on television and online is influencing the travelers to travel abroad and experience local cuisines for themselves.  

Age Group Insights

On the basis of age group, the luxury travel market has been segmented into millennial, generation x, baby boomers, and silver hair. Millennial is anticipated to emerge as the fastest growing segment with a CAGR of 5.4% over the forecast period. Millennials have a mindset for luxury and its meaningful consumption over owing stuff. They tend to be more independent in their religious and political views, more entrepreneurial, less likely to be married, distrustful of authority, better educated, and more travel-oriented than any other generation. Millennials are shifting their focus from traditional pampering to a wider range of compelling experiences.

Baby boomers held more than 40.0% share of global revenue in 2018. Baby Boomers are expected to hold the largest market share in the forecast period owing to the fact that baby boomer travelers are healthier, wealthier, independent, educated, and have abundance of leisure time. They have flexible budget and are becoming tech savvy to get the best deal and have less hustle while planning the luxury travel. Baby Boomers are independent travelers who have visited many places, no-child responsibilities, and a wide bucket list ranging from taking a world cruise, long vacation on a luxury cruise liner, exotic ports, enjoying an upscale safari, to visiting multiple adventurous destinations.

Regional Insights

North America emerged as the largest regional market in the year 2018 and this trend is expected to continue over the forecast period. In 2018, U.S. was the largest shareholder of this market with a share of 85.5% in North America as it is a global financial hub as well as one of the most popular tourist destinations for people across the world. Increase in shorter trip over long haul trips is expected to fuel the market growth in the region over the forecast period.

Asia Pacific is anticipated to emerge as the fastest growing regional market over the forecast period. Rise in spending power and improving standard of living are some of the key factors responsible for attracting customers toward luxury travel. Demand for luxury travel for corporate events, corporate stays, and leisure trips is rising as more money is being injected into the economy. Countries facing political instability, economic crises, and stringent Foreign Direct Investment (FDI) regulations are anticipated to witness steady or slow growth in the market.

Luxury Travel Market Share Insights

Some of the key players in this market are TÜ Elite; TCS World Travel;Abercrombie & Kent USA;TUI Group; Micato Safaris; Butterfield & Robinson Inc.; Scott Dunn Ltd.; Cox & Kings Ltd.; Exodus travels; and Lindblad Expeditions.

Market players are entering into mergers and acquisitions (M&A) and strategic partnerships to expand their geographical footprint. For Instance, in July 2015, Lindblad Expeditions, Inc. merged with Capitol Acquisition Corp. II, which will enable it to have attractive future growth opportunities including new ship builds and expanded charters. Lindblad, in partnership with National Geographic, is a global leader in expedition cruising and luxury travel experiences, featuring highly curated content to 40+ destinations on all seven continents.

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