Allied Market Research published a report
showing global luxury travel market is projected to generate $1,154 billion by
2022, growing at a CAGR of 6.4% during 2016-2022. The key factors that drive the market growth
are the 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.
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 travellers. 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 travellers are indulging in
these tours as they enable these travellers to experience the finest local
delicacies and also buy some of the most exquisite handicrafts. These trips are
getting popular among travellers of all age groups, especially the millennials
(21 – 30 years). In 2015, approximately 70% of millennials took a trip based on
culinary interest.
The highest market share in the overall
luxury travel market is however expected to be from the baby boomers segment.
This is because, by age group, they have been identified as the highest travel
spenders. 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 as the
industry sources say. However, it has been identified that only 5-10% marketing
is targeted at this traveller segment. Among the other age groups considered in
our study, the segment of millennials; would exhibit the highest growth during
the forecast period. “Luxury travel market has a huge growth potential and
would see immense demand from the emerging markets. Exposure to social media,
growing disposable income and easy visa availability are some of the factors
which are propelling the growth of the market. Nowadays, luxury travellers are
seeking unique traveling experience, thus opting for exotic and unexplored
destinations”. Says Yogiata Sharma, Research Analyst, Consumer Goods Research
at AMR.
The major factors that promote the demand
for luxury travel by absolute luxury travellers are the high spending power and
search for exclusivity with high comfort and first class facilities. The
absolute luxury travellers take at least three to four luxury trips in a year.
Among the three luxury traveller types, the absolute luxury traveller 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.
The major finding of the luxury travel
market include the following:
-Absolute luxury traveller segment is
projected to generate largest revenue in the luxury travel market.
-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 travellers from Europe, Latin America, and North America,
comprising 78% of overall international departures in this segment
-Asia-Pacific is estimated to witness
significant growth during the forecast period (2016 to 2022), with China being
the major stakeholder
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