Luxury Travel Market by Tour Type (Customized & Private, Adventure & Safari, Cruise/Ship Expedition, Small Group Journey, Celebration & Special Events, Culinary Travel, and Shopping), Age Group (Millennial, Generation X, Baby Boomer, and Silver Hair), Traveler Type (Absolute Luxury, Aspiring Luxury, and Accessible Luxury), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2021–2028

Luxury Travel Market Analysis

The global luxury travel market is anticipated to garner $1369.1 Billion in the 2021–2028 timeframe, growing from $461,741.6 million in 2020 at a healthy CAGR of 8.8%.

Market Synopsis

The technological advancements that provide convenience of booking, with facility to see all accommodation options, offering best deal and special discounts along with contactless payment option are estimated to drive the growth off luxury travel market. 

However, natural disasters or outbreak of diseases such as the COVID-19 virus that has led to socio-economic disruptions are anticipated to restrain the market growth.  

According to the regional analysis of the market, the Asia-Pacific luxury travel market is anticipated to grow at a CAGR of 14.5% by generating a revenue of $447,151.1 million during the review period.

Luxury Travel Market Overview

Luxury travel refers to exploring various destinations in an inspirational and unprecedented ways that offer personalized experience as per the traveler’s preference. Luxury travel offers exceptional experience to the users regardless of destination with warm, superior, and anticipatory services offered by luxury travels. 

Impact Analysis of COVID-19 on the Global Luxury Travel Market 

The COVID-19 outbreak has severely disrupted the economy with devastating effect on several industries and the luxury travel also experienced a negative impact owing to unprecedented lockdowns and travel restrictions imposed across various countries. The travel restrictions have negatively impacted the tourism industry and led to cancellations of various domestic and international tours resulting in huge revenue losses. Many tourism companies have shut down their operations due to lockdowns imposed across various countries with no definite update to rollback. The social distancing measures, work from home, restrictions on social gatherings, stay at home initiatives, and self or mandatory quarantine have negatively impacted the tourism industry. In addition, tourism related sectors such as catering, entertainment, lodging, retail, and transportation have also faced severe revenue losses. The financial uncertainties leading to limited spending on non-essential goods is estimated to retrain the growth of luxury travel market during the pandemic.      

Several companies, with their technological advancements and initiatives, are helping the society to recover from the chaotic situation. For instance, the changing customer mindset has led to development of contactless check-ins and check-outs as travelers want to feel safe while travelling with emphasis on hygiene. Instead of staying in hotels, people prefer to stay in private rooms with an isolated environment with key focus on exploring remote places. Also, their catering requirements have changed, and the travelers prefer to have a private chef and a butler for daily cleaning. Various government initiatives to support the travel and tourism sector, as it is the integral pillar of any country, have been launched by the government. For instance, as stated on April 10, 2021, in the Financial Express, a leading news platform, the Government of India has launched various initiatives such as SEIS (Service Exports from India Scheme), National Skills Development Program, and others to support the tourism industry. The incentives provided by the government under SEIS scheme is helping the travel sector in offering attractive packages to the visitors visiting India. These factors are anticipated to boost the luxury travel market growth during the forecast period.       

Growing Demand for Unique and Exotic Holiday Experience to Drive the Market Growth 

The global luxury travel market is witnessing rapid growth due to increase in demand for unique and exotic travel experience that helps people to ward off the stress. Luxury hotels offer unique experience to travelers, and the travel quality is measured by accommodation and quality of services offered. Luxury travel is a holiday free from worries and a break that helps you to meet your wishes. Private, serene, and quiet locations are top factors that people consider while choosing any luxury travel location. The places that are culturally and traditionally intriguing are considered by the travelers as people can learn about local culture. Luxury travel improves the physical and mental health with fresh air that helps in reducing stress and provides relaxation. Some of the popular untouched luxury travel activities and destinations are Kayaking in Costa Rica, walking in Italy’s Puglia region, incredible winter landscape of Iceland, and others. In addition, the security offered by hotels during luxury travel is excellent with cameras and special card access to rooms even while using elevators to your floor. Some hotels also offer exceptional services such as welcome drinks on arrival, flowers in your rooms, butler service, car parking service, beautiful rooms, and others.  All these advantages are anticipated to drive the luxury travel market demand during the analysis timeframe.     

To know more about global luxury travel market drivers, get in touch with our analysts here.

Varying Socio-economic Conditions to Restrain Market Growth 

The changing socio-economic conditions resulting due to various factors such as terrorist attacks, riots, and political unrest are a major setback for the luxury travel market growth. In addition, the COVID-19 pandemic is the biggest factor that has adversely affected the luxury travel industry and led to cancellations of various travel programs due to lockdown and restrictions on large gathering of people. Also, this has led to financial crisis as various business across the globe were shut down for several months. These factors are estimated to restrain the luxury travel market growth during the forecast period.  

Technological Advancements and Emerging Destinations to Create Enormous Investment Opportunities

The technology has rapidly changed the way in which people used to travel with an increase in personalization take off. The breakthrough technologies such as high-speed internet that enables people to book flights and hotels online by searching online reviews, offering easy cancellations, and online check-in and check-out facilities is estimated to generate huge opportunities in the market. For instance, the luxury travel companies such as Airbnb is giving more freedom to people to explore various places and digitalization is enabling them to gather more information about the place online. The complete luxury travel experience has been personalized with transformations brought by technology right from booking hotels and travel tickets to checking in, unlocking the door, and personalizing your stay. Artificial Intelligence based voice search, voice control with the help of smart speakers, and smartphones have transformed the luxury travel industry with increase in the number of travelers. In addition, the growth in number of luxury travel destinations such as the Seychelles, Tanzania, Aguas Calientes, Peru, Mirihi Island in Maldives, and others is estimated to generate excellent growth opportunities for the market players during the analysis timeframe.    

To know more about global luxury travel market opportunities, get in touch with our analysts here.

Source: Research Dive Analysis

The adventure & safari sub-type is anticipated to have a dominant market share and generate a revenue of $543,892.0 million by 2028, growing from $189,843.8 million in 2020. The safaris offer unique and unforgettable experiences to the users with mix of wildlife adventure, spectacular scenery, and unusual cultural encounters. For instance, the African Safari enables you to escape from the hustle and bustle of daily life and offers budget-friendly holidays. The safari provides you the chance to see wild animals in Africa that roam freely in the reserves. The adventure travels such as trekking into the mountains, cycling along rural back roads, climbing expedition, and others liberate the soul and offer mental & physical well-being. Such adventures and safari tours help in reducing stress. Spending time in nature can help to rejuvenate your soul, and spending time outdoors can make you smarter, help in learning new skills, and can forge new friendships. All these factors are estimated to drive the growth of adventure and safari sub-segment during the forecast period.  

The cruise/ship expedition sub-segment is anticipated to witness the fastest growth and shall generate a revenue of $115,479.0 million by 2028, increasing from $37,515.7 million in 2020. The growing popularity of cruise/ship expedition is owing to the soft adventure experience offered by this expedition, and it allows you to explore the places that can’t be reached by land. Furthermore, the cruise/ship expedition focuses on learning and are led by geologists, anthropologists, and specialists who help you in exploring local wildlife and cultural diversity. Some cruise/ship expeditions are equipped with dinner, musical productions, and night clubs that provide entertainment to the travelers and make their journey joyful, which is estimated to drive the growth of cruise/ship expedition sub-segment during the forecast period.   

Source: Research Dive Analysis

The baby boomer sub-segment of the global luxury travel market is anticipated to have a dominant market share and fastest growth, surpassing $517,801.8 million by 2028, with an increase from $180,031.3 million in 2020. The baby boomers refer to the people born in between 1946 and 1964. Currently, these people are 57-75 years old. The growth in this sub-segment is attributed to flexible schedules of baby boomers that allows them to travel and opt for longer holidays. Also, they want to ensure that they are physically fit and prefer travelling in groups since it gives them company of good friends and security which is predicted to propel the growth of baby boomer sub-segment during the forecast period.

Source: Research Dive Analysis

The absolute luxury sub-segment of the global luxury travel is anticipated to have a dominant market share and surpass $757,089.2 million by 2028, with an increase from $253,468.1 million in 2020. This is majorly owing to priority check-ins, excellent hotels, food services, enhanced entertainments such as cruise dinner, nigh clubs, on-demand service, and others. This helps in offering unique and unforgettable travel experience.   

Source: Research Dive Analysis

The Market for Luxury Travel in Europe to be the Most Dominant

The Europe luxury travel market accounted $174,670.3 million in 2020 and is projected to register a revenue of $452,216.8 million by 2028. The rapid growth in Europe luxury travel market is attributed to various factors such as personalized service, reliable transport, excellent quality food & wine, professional staff, health & safety measures, political stability, and leisure luxury. Furthermore, the Europe luxury travel is among the wish lists of many people across the world. France is the most popular luxury travel destination in Europe with Eifel Tower, museums, enormous palaces, castles, cathedrals, and others being the top attraction. Other top luxury travel destinations in Europe include Spain, Italy, UK, Germany, Austria, Greece, Russia, Portugal, and others. The top attractions in Europe are Tortilla Espanola, located in Spain; Leaning Tower of Pisa, Italy; Stonehenge in the UK, and Neuschwanstein Castle, Reichstag building, Heidelberg Castle, Aachen Cathedral located in Germany, and others. All these aspects are estimated to drive the demand for Europe luxury travel during the forecast period.  

The Market for Luxury Travel in Asia-Pacific to be the Fastest Growing  

The share of Asia-Pacific luxury travel is anticipated to grow at a CAGR of 14.5% by registering a revenue of $447,151.1 million by 2028. This growth is majorly attributed to economic growth, desire to explore various places and growing popularity for adventure, ship/cruise expedition among the young population. Asians travel more to gain a unique travel experience, to live a stress-free life, and to explore various cultures. In addition, rise in the disposable income among people, double-income households, higher purchasing power is driving the demand for luxury travel in Asia-Pacific region. In addition, Japan is one of the luxury travel destination that offers high-class accommodation, cultural experience, excellent hospitality, best gourmet experience. Also, people can attend various cultural events such as a geisha or maiko. These factors are anticipated to propel the Asia-Pacific luxury travel demand during the forecast period.    

Competitive Scenario in the Global Luxury Travel Market  

Technological advancements, partnerships, and business expansions are common strategies followed by major market players.

Source: Research Dive Analysis

Some of the leading luxury travel market players are Abercrombie & Kent USA, LLC., Cox & Kings Ltd., Butterfield & Robinson Inc., Scott Dunn Ltd., Kensington Tours Ltd., Micato Safaris, Thomas Cook Ltd., Meredith Corporation, LLC, Travcoa Corporation, and TUI AG

Porter’s Five Forces Analysis for the Global Luxury Travel Market:

• Bargaining Power of Suppliers: Most of the companies operating in luxury travel focus on providing the unique experience to the users. The number of suppliers that provide luxury tour packages are less in number as the market is still under the development stage. The suppliers have high bargaining power as customer opt for best and elegant services irrespective of cost. The customers are willing to pay more for better services that gives high power to the suppliers. 
  Thus, the bargaining power suppliers is high.
• Bargaining Power of Buyers: Buyers have low bargaining power as number of buyers is high. The buyers opt for best-in-class service, they are loyal to their brands and don’t prefer switching between the travel companies as the cost they paid is very high. 
  Thus, the bargaining power of the buyers is low.
• Threat of New Entrants: The companies entering luxury travel requires high investment cost and expertise knowledge to provide the travelers with best experience. Also, travelers are loyal to their travel companies and don’t prefer switching to other companies. 
  Thus, the threat of the new entrants is low.
• Threat of Substitutes: The non-luxury travel that offer cheap and budget-friendly travel options along with excellent customer service and good travel experience acts as a substitute for the luxury travel. It totally depends on the travelers which travel option they want to choose. 
  Thus, the threat of substitutes is moderate.
• Competitive Rivalry in the Market: The competitive rivalry among industry leaders is moderate. The number of players operating in luxury travel are high and strategies adopted by these players such as acquisitions, partnerships, and new technologies are increasing significantly.  
  Therefore, competitive rivalry in the market is moderate.