Rising Consumer Disposable Income, a Significant Factor Driving the Luxury Travel Market Growth

Introduction

Income levels in Asia have surged since the past decade, with the region’s per capita GDP almost doubling, from USD 3,190 in 2005 to USD 5,960 in 2015.

The luxury travel market is growing, backed by consumer spending, growing Chinese millennials, and expansion of the tourism sector. Growing Chinese middle-class at a faster rate are key contributors to the market growth. The Asian consumers are rapidly spending on travel based on celebration & special events strongly supported by increased disposable income.  In addition, the rising affluence and a relaxation of visa restrictions on Chinese travellers by the Chinese government are rapidly boosting the market growth.

As the working populace is growing with a greater number of women in working-class, consumer’s expenditure on travel is on a rise. As a result, the market has seen an upsurge in more women travellers, driving the market growth. As per the statistics, in- terms of future spending options, luxury travel has become popular and a top priority of most of the people. To capitalize and attract more consumers, market leaders are formulating unique strategies to target the growing middle-class segment.

Impact of COVID-19

The COVID-19 pandemic has severely impacted the world, especially the tourism sector.  The number of international tourist arrival is projected to witness a significant fall due to travel restrictions introduced by several countries. The United Nations World Tourism Organisation (UNWTO) estimates a decline of about USD 300–400 billion (20–30%) in the global international tourist arrivals. Europe is largely hit by the pandemic as the region represents 50% of international travel, followed by Asia-Pacific and Africa.

Key Highlights

• The luxury travel market is expected to grow with a lucrative CAGR of xx%, strongly supported by digitally influenced millennials and growing disposable income across the globe.
• The millennial (21–30) segment is projected to hold over 45% of the market share. The gradual shift towards world exploration drives the segment growth.
• The adventure & safari segment is projected to grow at an exponential rate during the forecast period due to rising demand for nature-based holidays.
• Europe dominates the luxury travel market as the region is one of the most popular destinations for luxury travel. Germany witnessed the largest number of international tourist influx in the region, further driving the market growth.

Competitive Players

1. Abercrombie and Kent USA, LLC
2. Virtuoso, Ltd.
3. Scott Dunn Ltd
4. Butterfield and Robinson Inc
5. TUI AG
6. Travcoa (The Luxury Travel Group)
7. Micato Safaris, Inc.
8. Ker and Downey
9. Tauck, Inc.
10. Black Tomato Group
11. Thomas Cook Group Plc
12. Cox and Kings Ltd
13. Kensington Tours Ltd
14. Zicasso, Inc.
15. Backroads
16. Lindblad Expeditions
17. Exodus Travels

Recent Developments

Segmentation

1. By Type of Tour
   1. Cruise/ship expedition
   2. Adventure & safari
   3. Celebration & special events
   4. Customized & private vacations
   5. Culinary travel & shopping
   6. Business tours
   7. Small group journey
2. By Age Group
   1. Millennial (21–30)
   2. Generation X (31–40)
   3. Baby boomers (41–60)
   4. Silver hair (60 and above)
3. By Type of Traveller
   1. Absolute luxury
   2. Aspiring luxury
   3. Accessible luxury
4. Booking Channel
   1. Phone Booking
   2. Online Booking
   3. In booking
5. By Tourist Type
   1. Domestic
   2. International
6. By Tour Type
   1. Independent Traveller
   2. Package Traveller
   3. Tour Group
7. By Consumer Orientation
   1. Men
   2. Women