Our research indicates that travel is becoming more polarized, reflecting the wealth patterns of the world’s citizens. At one end of the spectrum, we are seeing the introduction of ultra-budget products, such as the launch of new cabin classes below economy. At the other end of the spectrum, the growth rate in outbound luxury trips is projected at 6.2%, almost a third greater than overall travel at 4.8% over the next 10 years.
Luxury long-haul travel will grow faster than any other form of travel, and will overtake travel between countries that share a border shortly after 2025. This is shown through Tourism Economics data that forecasts the distance of the next decade’s luxury outbound trips based on current trends and growth rates.
As middle-class markets develop and mature across the globe, the luxury hospitality market is expanding to meet their needs. A recent report from Transparency Market Research found that the global luxury hotels market will continue to expand at a compound annual growth rate of 4% from 2015-2021. The increased wealth and refined travel aspirations of these new middle classes will compel them to invest in long-haul travel to new destinations, thus encouraging their peers to follow suit and explore other corners of the globe.
North America and Western Europe currently account for 64% of the world’s outbound luxury trips – despite only making up 18% of the global population. This clear majority of the market share will continue over the next 10 years; the maturity of these luxury markets and the relative affluence of their populations explain this dominance.
Between 2011 and 2025, Asia Pacific’s luxury travel market will see faster overall growth than Europe’s, but will decelerate from 2015-2025, while Europe’s will continue to grow steadily. This pattern is indicative of the regions’ economic performances. For example, China’s GDP growth slowed from 10.3% in 2011 to 6.9% last year, a trend which could have a significant effect on the growth pattern for Asia considering its dominance of the market.
Interested in learning more about how the future of luxury travel is shaping up? Check out our Shaping the Future of Luxury Travel report.