Comment: Luxury travel is the turbo-engine for sector’s recovery
In mid-March, YouGov revealed what’s next in luxury travel. We surveyed affluent consumers across 18 international markets to shed light on what post-pandemic travel looks like globally and how affluent traveller expectations and habits have evolved over the last few years.
Despite inflationary pressures and other economic headwinds, the interest and appetite for travelling show no signs of slowing down across markets. YouGov’s daily travel sentiment tracker shows that three-quarters (74%) of consumers globally plan to take at least one trip in the next 12 months, whilst that figure is even higher amongst the high earners – 91% planned to travel in 2023, a new record high since early 2020.
Luxury travel is the turbo-engine for travel recovery
Spurred by high demand, intentions to take longer trips, and plans by high earners to spend more on travel this year means the luxury travel market can be expected to be the fastest-growing segment of the travel industry.
Many industry players want in on the action – airlines have been expanding and/or upgrading their premium economy, business and first-class offerings; airports have been upscaling airport lounges, bringing luxury retail brands and more upscale food outlets to airports’ airside; high-end rail operator Belmond’s Venice Simplon-Orient-Express added new routing.
Luxury hotel brands have taken experiential travel to the next level by venturing into adjacent categories. Marriott launched into yachting with the first fleet of The Ritz Carlton yachts making their maiden voyage at the end of 2022, offering an exploration of earth’s exquisite and unexpected hideaways. Four Seasons offers guests a one-of-a-kind global adventure aboard the custom designed Four Seasons Private Jet, as well as premium options such as charting a yacht or booking classic car or supercar driving experiences.
The increasing supply of high-end travel offers will align well with the growing demand. Affluent travellers have a higher propensity to travel First class (21%), book an expedition cruise to adventurous destinations (18%), charter a private yacht or hop on a luxury cruise experience (16%), and opt for a private jet/helicopter experience (10%).
Unique and meaningful holidays to remote destinations is highly desired
The primary motivation for taking leisure trips amongst affluent travellers is relaxation and the desire to disconnect. Slightly over half (51%) of global respondents also state that they are looking for more meaningful travel experiences post-pandemic. Many are also willing to increase their budget for travel, with (58%) saying they would spend more money on unique destinations and experiences.
As such, luxury travellers are expressing a yearning for a unique experience that would allow them to get close to nature or visit a remote destination (31%); they are seeking custom tours or other tailored travel experiences that would enable them to connect with local culture and environment. Throughout 2022, 14% said they had ticked a location or experience off their bucket list.
Through investigating how global consumers have interacted with various luxury products, services or experiences in the last few years, sustainable luxury accommodation ranks top among the affluent groups looking for meaningful experiences. A quarter (23%) state that they are prepared to pay more to stay at eco-friendly/sustainable hotels or resorts, whilst villas or chalets in secluded and private locations have a similar appeal (27%).
Major hotel brands want to capture as much of their guests’ share of travel wallets and aim to convince their customers to remain in the broader brand eco-system by offering hotel and resort rooms as well as an alternative type of accommodation.
In recent years, we’ve seen hotels launching and offering vacation rentals, private homes and villas to their loyalty program members and other customers. This type of accommodation better meets the needs of those seeking privacy or those on group or multi-generational travel.
YouGov’s survey shows that a fifth (18%) of affluent global consumers said they have travelled more with a wider group of family/friends since the pandemic. This way of travelling is even more popular with consumers in Mexico (28%), India (37%), Indonesia (42%), and China (31%).
Whilst the luxury traveller is multifaceted, the common thread is that the majority are after a unique and memorable travel experience, which brings the authenticity of local cultures, the beauty of nature, and experiences which provide personal fulfilment and enrichment.
Affluent consumers are prepared to pay a higher price for premium offers that go above and beyond their expectations while delivering ease, comfort, flexibility and safety to ensure they can satisfy their desire to relax, unwind and disconnect completely.