Global consumers are increasingly spending their disposable income on experiences rather than material goods - spurring a growth in luxury travel that is outpacing the rest of the travel industry.
This is according to a new Amadeus report, featuring data from Tourism Economics, that found a 4.5% compound annual growth rate (CAGR), versus 4.2% for overall travel, for luxury travel between 2011 and 2015.
This was measured in terms of outbound flights on business or first class.
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%, predicts Amadeus.
The report, Shaping the Future of Luxury Travel, pinpoints challenges and opportunities faced by the luxury travel market over the next decade.
It was commissioned by Amadeus, a global travel technology provider, and developed with data from Tourism Economics and with dozens of expert interviews with global luxury travel experts across travel concierge agencies, airlines, hoteliers and intermediary suppliers through Connections, a global networking event organiser for luxury travel providers.
Some key findings from the report include:
- North America and western Europe account for 64% of global outbound luxury trips, despite only making up 18% of the world’s population
- Between 2011 and 2025, Asia Pacific’s luxury travel market will see faster overall growth than Europe’s, but this growth will decelerate from 2015 to 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
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In 2015, Amadeus released a report called Future Traveller Tribes 2030, which identified six traveller tribes based on consumer behaviour, recognising 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. These are: 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,” said 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,” added Sinclair-Barnes.
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