Land of plenty
Luxury travel is booming.
According to HospitalityNet, luxury travel trips have grown by 18% since 2014, which is nearly twice as much as international travel trips in general, which grew by about 9% in the same period.
Demand is being driven by increased choice and affordability of luxury holidays with most luxury travellers coming from the USA and China. Travellers' preferences are also shifting from seeking opulence to seeking experiences, which many are willing to trade up for. This is also helped by millennials entering the world of luxury travel. While millennials may not spend excessively on accommodation, they are willing to splurge on exclusive experiences that can be instantly shared on social media platforms.
Sports and adventure tourism as well as health and wellness, with "self-discovery", and "responsible-tourism" are particularly popular types of luxury holiday at the moment. The number of safari holidays, wellness / yoga retreats, and local culture-focused trips have all steadily risen over the past few years. &Beyond began by providing safari lodges at an African game reserve but now offers guests premium, authentic visits across Africa, Asia and South America, while "expanding and protecting the biodiversity of the Earth’s lands and oceans".
Allied Market Research predicts the global luxury travel market to grow at a 6.4% CAGR from 2016-2022, and even faster for millennials at 8.1%. This growth presents an exciting opportunity for luxury retailers and hospitality providers to capitalise on.
Some businesses have already begun to adapt their offer accordingly:
- After acquiring a high-end home rental company,Luxury Retreats, last year, Airbnb is launching its own luxury tier called Beyond by Airbnb, which looks to bundle some of its most luxurious properties with high-end travel services. It aims to help travellers build their whole trips, from accommodation to experiences
- British Airways partnered with Liberty of London to offer amenity kits to business class customers and United Airways collaborated with Saks Fifth Avenue to launch the Polaris cabin, giving premium passengers custom-made bedding and accessories
- Airports are continuing to open premium, Michelin star chef-owned restaurants to cater for various affluence levels
However, as exclusive experiences become accessible to a greater market, how will luxury tourism change? As Emily Segal, co-founder of K-Hole, put it, "we’re living in an age where civilians can travel to outer space on Virgin Galactic… where you can rent a private island on Airbnb for $500 a night. It’s becoming clear that mass luxury is no longer a new thing, yet it creates this contradiction: how can you offer ‘luxury’ in the traditional sense and ‘mass’ at the same time?"