Global consumers are increasingly spending their disposable income on experiences rather than material goods. Consumers’ desire for life experiences is spurring a growth in luxury travel that is outpacing the rest of the travel industry, finds a new Amadeus report featuring data from Tourism Economics.
Between 2011 and 2015, luxury travel, in terms of outbound flights on business or first class, saw a 4.5% compound annual growth rate (CAGR), versus 4.2% for overall travel. This trend will continue to accelerate over the next ten years, with luxury travel trips projected to grow at a CAGR of 6.2% between 2015 and 2025, almost a third faster than overall travel at 4.8%.
This trend is good news for the luxury travel sector. The report, Shaping the Future of Luxury Travel
, reveals the fresh challenges and opportunities that the luxury travel market will face over the next decade.
Some key findings from the report include:
· We have entered a new age of luxury travel, where luxury is curated, real-time and experience-led
· North America and Western Europe account for 64% of global outbound luxury trips, despite only making up 18% of the world’s population
· From 2011-2025, Asia Pacific’s luxury travel market will see faster overall growth than Europe’s, but this growth will decelerate from 2015-2025
· India’s luxury market CAGR of 13% is higher than any of the other BRIC nations, and is the highest of the 25 countries explored in this report
· A human desire for more rewarding experiences provides an essential catalyst to evolve and improve travel industry quality and service standards
· A hierarchy of luxury travel needs is identified, ranging from 5 star quality and service standards to exclusive VIP privacy and security
In 2015, Amadeus released a report called Future Traveller Tribes 2030,
which identified six traveller tribes based on consumer behaviour, recognizing that purchasing patterns change depending on the circumstances of each trip.
Using similar methodology, Shaping the Future of Luxury Travel
, identifies six luxury traveller tribes to help travel providers better target their luxury customer market: Always Luxury; Special Occasion; Bluxury; Cash-rich, time-poor; Strictly Opulent; and Independent Affluent.
“Luxury means different things to different people and this is especially true today. As emergent middle classes seek the material aspect of luxury travel, more mature markets are craving a new, evolved kind of luxury. This is why offering luxury customers a relevant personal and exclusive experience will become even more crucial than it is today – it will be a differentiating factor between old and new luxury,” says Rob Sinclair-Barnes, Strategic Marketing Director at Amadeus IT Group.
“Understanding your business’s role in delivering an end-to-end luxury experience for a traveller is key to improving collaboration, and reinforcing an industry-wide push for consistent luxury service. Exploring the latest technologies and innovations for making the industry work better as a whole is key to achieving a new level of luxury that has never existed before” says Sinclair-Barnes.
You can download a free copy of the Shaping the Future of Luxury Travel report here.