Global luxury travel market to surpass $1,154 billion by 2022
A report published by Allied Market Research has shown that the 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 would 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 the travel industry.
In 2015, the adventure and safari segment accounted for about 44% of the overall luxury travel market revenue, by tour type as this has been identified as the most popular vacation option among young and middle age group travellers. Additionally, tours aimed at culinary and shopping experience would see the fastest growth, registering a CAGR of 7.8% during the forecast period.
A growing number of luxury travellers are indulging in these tours, which enables travellers to experience the local delicacies and also buy some of the 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.
However, the highest market share in the overall luxury travel market is expected to be from the baby boomers segment. This is due to the fact that 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. Though, it has been identified that only 5-10% marketing is targeted at this traveller segment. Among the other age groups considered in the 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 travelling experience, thus opting for exotic and unexplored destinations,” says Yogiata Sharma, Research Analyst, Consumer Goods Research at AMR.
Regionally, luxury travel market of Asia Pacific would exhibit the fastest growth due to the rise in a 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 have been identified as Germany and Italy. Whereas, Paris is the global leading metropolitan destination that 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.
January 25, 2021