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The luxury travel market is estimated to grow at a CAGR of 11.5% between 2022 and 2027. The size of the market is forecast to increase by USD 703.14 billion. The growth of the market depends on serval factors, including increasing disposable incomes along with advancement in technology and growing digital connectivity.
This report extensively covers market segmentation by type (adventure, personalized, cruising and yachting, culinary, and others) and geography (Europe, North America, APAC, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Technavio categorizes the global luxury travel market as a part of the hotels, resorts and cruise lines market & within the global consumer discretionary industry. Growth in the global hotels, resorts, and cruise lines market will be driven by the growing travel and tourism industry. The parent global hotels, resorts, and cruise lines market covers companies engaged in operating hotels, resorts, and cruise ships, including travel agencies, tour operators, and related services. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Luxury Travel Market Driver
Increasing disposable incomes are notably driving the luxury travel market growth. The disposable income of people increased significantly globally. For instance, according to the data stated by the US Bureau of Economic Analysis in April 2022, disposable personal income (DPI) increased by USD 89.7 billion (0.5%) over that in March 2022 in the US compared to February 2022. According to the Organization for Economic Co-operation and Development (OECD), household disposable income has increased in all developed and developing countries since 2021.
The growth in disposable income is expected to increase the spending and purchasing power of consumers. The boom in the tourism industry has also encouraged consumers to spend on travel and leisure activities that offer exotic holiday experiences. For instance, according to the data published by the Department of Commerce, the US is projected to welcome 95.5 million international visitors annually by 2023. Therefore, the increasing disposable income boosts the demand for luxury travel to different destinations across the world, which, in turn, is fostering the growth of the market during the forecast period.
Key Luxury Travel Market Trend
Sports tourism is the primary trend driving the luxury travel market growth. Sports tourism involves travelling from one destination, such as a city, state, country, or region, to another to watch or participate in a game. Sports tourism has gained popularity in the last 5-7 years, resulting in a large number of sports enthusiasts attending sporting events. such as the Olympics, the Federation Internationale de Football Association (FIFA) World Cup, the Super Bowl, and the Cricket World Cup, which are among the most popular sports viewed by billions of people globally.
A large number of sports tourism operators offer packages that combine accommodation and sporting event tickets, which include special or VIP seating so that the viewers can have a clear view of the game. People are travelling far and wide to attend their favourite sporting events, which is likely to drive the growth of the market during the forecast period.
Key Luxury Travel Market Challenge
The threat of natural calamities and other issues may impede the luxury travel market growth. Some other major threats faced by the global travel and tourism industry are political unrest and a sudden outbreak of a pandemic. While environmental disasters may have a direct impact on biodiversity, human health, and the tourism industry and may take about 20-24 months to recover, political unrest may take the tourism industry about 27 months to recover.
The sudden outbreak of infectious diseases also affects the tourism business to a certain extent. For instance, the sudden outbreak of COVID-19 has had a major impact on the tourism industry, as travel bans were implemented worldwide in 2020 and 2021 to prevent the transmission of the disease. An increase in travel to affected places and close contact with patients diagnosed with COVID-19 were among the major factors that were responsible for the growth in the number of COVID-19 cases in the US. With the initiation of vaccination programs in 2021, the global tourism industry is recovering slowly. Therefore, the threat of natural calamities and other issues may impact the revenue growth of the luxury travel market during the forecast period.
Key Luxury Travel Market Customer Landscape
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Luxury Travel Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Absolute Travel Inc. - The company operates under multiple segments, including ship cruises, vacations, tours, and others. Under the cruises segment, the company provides luxury travel by cruise ship to destinations such as the Caribbean, Australia, New Zealand, South Pacific, Transoceanic, Europe, and Africa. The company also offers travel packages for luxury music tours and concerts in New York.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the domestic segment will be significant during the forecast period. Globally the domestic segment of the luxury travel market has grown significantly across the globe. The growth in domestic luxury travel is driven by favourable government regulations, the lack of currency exchange issues, and familiarity with the culture and the language. The domestic tourism economy is lucrative, and it is growing due to the rising trend of micro trips and staycations. Domestic luxury travel is cost-effective for people in comparison to international travel. Domestic tourism and luxury travel mainly encourage tourists to visit natural attractions and aim at making them aware of the history and culture of their own country. Such travels provide a hassle-free experience for tourists, as they are already aware of food habits or etiquette and language. India, China, and the US are the most preferred destinations for domestic luxury travel. The number of domestic tourists has increased significantly in these countries.
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The domestic segment showed a gradual increase in market share from USD 409.38 billion in 2017 and continued to grow by 2021. For example, in Morrocco, domestic luxury travel packages take tourists to various tourist destinations across the country, which include destinations such as the Atlas Mountains to seaside Essaouira, the Sahara desert to the palmery of Todra Valley, and the medieval old town of Fes to the spice markets of Marrakech. Such domestic luxury travel tours in a single package attract many people living in the country. Such packages that include domestic luxury travel plans, especially for families, are expected to drive the growth of this segment of the market during the forecast period.
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Europe is projected to contribute 29% by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Growing disposable income, the increasing spending capacity of Baby Boomers, the presence of numerous exotic destinations, the increasing demand for personalized vacations, the availability of easy transport facilities, the rapid increase in the number of food and beverage festivals, and the presence of major vendors contribute to the growth of the market in Europe. The spending capacity of Baby Boomers is increasing significantly in Europe. This generation prefers multi-generational and tailormade vacations that include good dining and fun-filled activities with family. The increasing demand for such travel experiences boosts the growth of the market in the region. In countries such as the UK, Germany, Spain, and Switzerland, an increasing number of food festivals and the rising number of adventure sports such as kite surfing, hiking on mountains, and paragliding attract a large number of domestic and international tourists to these countries. Also, Paris is the world's most visited city both by international and domestic tourists. Therefore, the growing tourism in the above countries will drive the growth of the regional market during the forecast period.
To recover from the impact of the COVID-19 pandemic, vendors are making efforts to reassure customers by offering more flexibility and outdoor and crowd-free destinations. Luxury travel staycations are witnessing gradual growth in the region, especially in countries such as the UK and Spain. Domestic luxury travel is a popular choice for people, especially among families that prefer to have one-day travel or a weekend vacation at prominent locations within their home countries. In 2021, vendors offering luxury travel services, for a group of people or families, at considerable price points were expected to witness an increase in their customer base. Moreover, many high-end hotels, restaurants, and leisure are witnessing a rise in booking by people for short durations in their home countries. Hence, the vendors operating in the regional market have an opportunity to coordinate with such hotels, restaurants, and leisure operators to increase their customer base during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by type, product, distribution channel, and region.
Luxury Travel Market Scope |
|
Report Coverage |
Details |
Page number |
164 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 11.5% |
Market growth 2023-2027 |
$ 703.14 billion |
Market structure |
Fragmented |
YoY growth (%) |
10.35 |
Regional analysis |
Europe, North America, APAC, Middle East and Africa, and South America |
Performing market contribution |
Europe at 29% |
Key countries |
US, China, Germany, France, and UK |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Abercrombie and Kent USA LLC, Butterfield and Robinson Inc., Classic Journeys, Exodus Travels Ltd., G Adventures, Indigenous Tourism BC, Intrepid Group, Lindblad Expeditions Holdings Inc., Micato Safaris Inc., Myths and Mountains Inc., Odyssey World, Responsible Travel, Scott Dunn Ltd., Tandem Travel OOD, Tauck Inc., Travelopia Group, Wilderness Travel Inc., Geographic Expeditions Inc., and Absolute Travel Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Consumer
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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