Luxury Travel Market was valued at USD 1.85 Trillion in 2019 and is expected to reach USD 2.4 Trillion by the end of 2025 with a CAGR of 7.9% during the outlook period 2020-2025.

The market of luxury travel has gone up to a whole new level in recent times as the rich prefer this more than standard travel and are heavily spending on luxury travel packages. The middle-class consumers of today are shifting their focus towards urbanization and look for more materialism in luxury travel. The increasing options for luxury travel for people are also improving market dynamics.

Recent Developments

In October 20, The Ambercombie and Kent USA announced resuming operating small groups of tourists in Africa.

The Enforcement Directorate (ED) in India arrested Cox & Kings promoter Peter Kerkar in a money laundering case linked to the alleged loan default at the Yes Bank.

Drivers

The main factor driving the growth of the Global Luxury Travel Market is an increase in personal income of people which allows them to spend more on holidays and travel. The growing demand for the accumulation of memories when traveling is a major positive influence on the growth of the luxury travel industry. Increasing tourism due to government initiatives and other factors has also boosted the developments in this market. Growing traveler's preference for personalized service and reliable transport has also increased the demand for travel options that are more luxurious and provide the best facilities. Growing political stability across the globe regarding gender, ethnicity, sexual orientation, human rights, racism, citizenship, and less hustle in visa offerings are influencing people’s decisions over potential travel destinations. The increasing trend for online searches about travel destinations has also supported the expansion of the Global Luxury Travel Market.

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Restraints

The major factor hindering the growth of the market is lack of awareness among people about the facilities available during luxury travel and how it is a unique experience. This decreases the growth rate of the market. Another major factor hindering the business is variation in prices in the country to country regarding luxury travel.

COVID-19 Impact on Luxury Travel Market

The coronavirus has negatively impacted the growth of the Luxury Travel market. The increasing prevalence of viruses in the world forced the governments to impose lockdown so that movement can be restricted and the spread of the virus can be controlled. This resulted in a decrease in spending to almost zero and thus the bookings about to be done had to be canceled which resulted in a major loss for the luxury travel market.

The COVID-19 has also forced governments to issue some travel advisory for all the people traveling and this may require getting quarantined for 14 days which is negatively impacting the growth of the Luxury Travel Market. With the conditions of lockdown easing all around the world, we may see the luxury travel market back on track by the end of 2022, and it may even surpass the previous expectations.

Segment Analysis

By age group, it is classified into millennial, generation X, baby boomers, and silver hair. Baby boomers are people between 51 and 60 and had the largest market share in 2019 and is expected to grow at a healthy rate in the future. The increased savings along with desire to travel at this age make this segment most dominant in the market. The silver hair population or people above 69 had lowest market share mainly due to the fact that traveling might be exhausting for the people of that age.

Based on type of tour, the market is divided into customized & private vacations, adventure & safari, cruise/ship expedition, small group journey, celebration & special events, and culinary travel & shopping. The adventure and safari segment had the largest revenue share in 2019 and is supposed to retain its position in the future. Culinary Travel and shopping segment is likely to be in the second spot in terms of market share by the end of the forecast period.

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By type of traveler, Luxury Travel Market is categorized into absolute luxury, aspiring luxury, and accessible luxury. The absolute luxury segment had the highest revenue share in 2019 and is supposed to dominate others in the future. The aspiring luxury segment is predicted to grow at a healthy rate during the outlook period.

Regional Analysis

The North America region is foreseen to grow at a good rate during the outlook period. The increasing population of the region coupled with an increase in disposable income is propelling the region’s growth rate. The surge in government initiatives to promote tourism in the area is positively impacting the region’s growth rate. The growing awareness among people about the facilities of luxury travel is also a major cause for a positive growth rate.

The Europe region is expected to dominate other segments and continue to grow at a healthy rate during the envisioned period. The increasing income of people is also boosting the region’s prospects. The rising initiatives by the governments promoting the historical places of Europe is boosting the local growth rate. It is a major contributor in the revenue of the regional business.

The Asia Pacific is projected to showcase the highest growth rate during the conjecture period. The increasing population rate particularly in countries like India and China is responsible for the region’s highest growth rate. India is supposed to grow as a dominant player in the Asia Pacific area with the rising number of travelers to different parts outside this continent. China is currently the leader in the Asia-Pacific luxury travel market, with almost 7 million outbound trips recorded every year, with Singapore in the second position.

Key Market Players

Key players profiled in the global luxury travel market report are Abercrombie & Kent USA, LLC, Cox & Kings Ltd, Travcoa, Micato Safaris, Ker & Downey, Tauck, Thomas Cook Group PLC, Scott Dunn Ltd, Kensington Tours, and Butterfield & Robinson Inc.