Global Luxury Travel Market is expected to generate $1,154 billion by 2022, growing at a CAGR of 6.4% during 2016-2022, according to a new report published by Allied Market Research. In 2015, North America and Europe collectively accounted for around 66% of the overall market revenue.
Growing inclination of people towards unique and exotic holiday experiences, rise in middle and upper middle class spending and the increasing impact of social media on travel industry are the key factors that drive the market growth. Emerging new destinations coupled with rising service standards in the travel industry, is anticipated to further drive the demand for luxury travel, globally.
The adventure and safari segment accounted for about 44% of the overall luxury travel market revenue, by tour type in 2015, as this is identified as the most popular vacation option among young and middle age group travelers. In addition, tours aimed at culinary and shopping experience, would witness the fastest growth, registering a CAGR of 7.8% during the forecast period. An increasing number of luxury travelers are indulging in these tours as they enable these travelers to experience the finest local delicacies and also buy some of the most exquisite handicrafts. These trips are getting popular among travelers of all age groups, especially the millennials (21 – 30 years). In 2015, approximately 70% of millennials took a trip based on culinary interest.
Baby boomers segment is projected to hold the highest market share in the overall luxury travel market, by age group, as they have been identified as the highest travel spenders. As per industry sources, about 68% of the disposable income in the U.S. is controlled by Baby boomers and are estimated to inherit $15 trillion in the next 20 years. However, it has been identified that only 5-10% marketing is targeted at this traveler segment. Among the other age groups considered in our study, the segment of millennials; would exhibit the highest growth during the forecast period.
High spending power and search for exclusivity with high comfort and first class facilities are the major factors that promote the demand for luxury travel by absolute luxury travelers. It has been identified that the absolute luxury travelers take at least three to four luxury trips in a year. Among the three luxury traveler types, the absolute luxury traveler segment is projected to grow at a CAGR of 6.5% during the forecast period (2016-2022).
Regionally, Asia Pacifics luxury travel market would exhibit the fastest growth owing to the rise in number of middle income groups. Within Asia-Pacific luxury travel market, India is estimated to register CAGR of 12.3% from 2016 – 2022. Europe and Caribbean would continue to be the most preferred luxury travel destinations. The most popular luxury travel destinations in Europe are identified as Germany and Italy. Whereas, Paris is the global leading metropolitan destination, which witnesses nearly 18.8 million international arrivals yearly. In LAMEA, Brazil continues to show a promising potential and is predicted to become one of the top-five global economies by the middle of this century. As per the tourism statistics, tourist arrival in Latin America has observed an increase of 50% in the past decade.
Key Findings of the Luxury Travel Market:
- In the year 2015, adventure and safari segment led the overall luxury travel market revenue, and is projected to grow at a CAGR of 5.8% during the forecast period.
- Adventure and safari is the most sought after tour type, with travelers from Europe, Latin America, and North America, comprising 78% of overall international departures in this segment in 2015.
- The millennials age group segment is expected to grow at a CAGR of 8.1%, owing to rising popularity of travel among this generation and the fact that they travel more often than the other generations.
- Absolute luxury traveler segment is projected to generate largest revenue in the luxury travel market.
- Asia-Pacific is estimated to witness significant growth during the forecast period (2016 to 2022), with China being the major stakeholder.