Global consumers are increasingly spending their disposable income on experiences rather than material goods. And consumers' desire for these life experiences is spurring a growth in luxury travel that is outpacing the rest of the travel industry, according a new report commissioned by global travel technology company, Amadeus.
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
The report was developed with data from Tourism Economics and with dozens of expert interviews with global luxury travel experts across specialist travel concierge agencies, airlines, hoteliers and intermediary suppliers through Connections, a global networking event organizer for luxury travel providers.
In 2015, Amadeus released a report called Future Traveler Tribes 2030, which identified six "traveler tribes" based on consumer behavior, recognizing that purchasing patterns change depending on the circumstances of each trip. Using similar methodology, Shaping the Future of Luxury Travel, identifies six luxury traveler tribes to help travel companies better target and serve the luxury customer market:
- Always Luxury: luxury is a minimum requirement rather than a perk
- Special Occasion: luxury travel is a treat, not a given
- Bluxury: their trip has a business objective, but they will extend it to enjoy a luxury leisure experience
- Cash-Rich, Time-Poor: likely to seek and pay for third-party travel planning assistance
- Strictly Opulent: seek the most glamorous experiences and will likely share on social media
- Independent Affluent: often solo travelers seeking luxury travel to pamper themselves or try something new
"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.
"For travel companies, understanding their role in delivering an end-to-end luxury experience for a traveler 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," said Sinclair-Barnes.
You can download a free copy of the Shaping the Future of Luxury Travel report here.
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