What is the cost of living crisis? Luxury travel is booming, with further growth expected

About 10 years ago, while working at the Badrutts Palace Hotel in the Swiss town of St. Moritz, he was shocked to learn that a customer had requested that an elephant be brought in to deliver a birthday present to his wife. And the hotel made it happen and pushed the elephant into the lobby.

This grand gesture symbolized what luxury travel once meant: wealth and power expressed through grand displays. Imagine millionaires and billionaires in luxurious suites and private yachts, enjoying luxury services that most of us would never dream of, much less actually ask for.

Consulting group McKinsey defines a luxury traveler as someone who is prepared to spend more than US$500 per night on accommodation. But luxury tourism is evolving. Luxury travel has become more personal and meaningful thanks to changing demographics, concerns about sustainability, and a desire for connection post-pandemic. And luxury travelers these days aren’t necessarily the ultra-wealthy elite.

Despite the cost of living crisis, luxury travel is booming. So what is driving this growth and how is luxury travel changing?

trillion dollar industry

The luxury travel sector has shown remarkable resilience despite the economic downturn and the COVID-19 pandemic. Globally, it is expected to increase from $1.4 trillion in 2024 to $2.2 trillion by 2030.

Asia-Pacific is leading the way with a compound annual growth rate of 8.6% from 2024 to 2030 (a method of measuring growth that assumes profits are reinvested).

The trend is similar in Australia, where the luxury travel market is expected to generate US$37.4 billion in 2023 and reach US$70 billion by 2032.

This growth is driven not only by the wealth of the wealthy, but also by young travelers. As Forbes points out, these travelers are often non-billionaires, don’t earn huge salaries, or even own their own homes, but they still enjoy meaningful travel. I’m willing to pay a lot of money for the experience.

Others are splurging on travel to make up for lost time and opportunities due to the pandemic. Industry experts sometimes refer to this trend as “revenge” or “festival” travel. As one luxury travel industry observer puts it:

“We’ve become more travel-at-all-costs. People are determined to get the experiences they want, no matter the price.”

Many consumers prioritize luxury travel experiences over any other product, including luxury goods.

Luxury has many different meanings.

Luxury travel today is more than just luxury. It may also include going out in search of meaningful experiences. Luxury travelers are willing to pay for vacations that promise authenticity, health, and connection to people and places.

It can mean access to something unusual, like an uncrowded natural environment or an authentic cultural experience that feels very personal.

You can also gain from expertise, such as appreciating the nuances of unusual wines or touring a place with an expert or celebrity guide who has visited the place many times before. .

Once defined by price and status symbols, luxury travel today is about stories worth sharing (on social media and in real life) and experiences that align with personal values. .

Wellness, adventure and digital detox

I have been researching luxury travel for 17 years and have seen many different types of luxury travelers. From the humble retiree enjoying the fruits of his or her hard work to the VIP celebrity who submits a 32-page request before stepping into a hotel.

While older, affluent people from North America and Europe remain important demographics, a growing share of luxury travelers are Millennials, Gen Z, and tourists from emerging markets such as Asia and the Middle East.

Traditional features of luxury travel, such as presidential suites and private islands, remain popular among the wealthy.

But more and more travelers are looking for cultural experiences, adventure, and small, intimate group trips.

These travelers are choosing off-peak seasons and less visited destinations to avoid crowds, and may be more vocal about sustainable tourism.

The future of luxury travel depends on adapting to evolving consumer values. Wellness travel, leisurely travel (including trains) and sustainable experiences are becoming central to the luxury travel narrative.

In a hyper-connected world, luxury travel marketing has become increasingly associated with the idea of ​​digital detox. The opportunity to disconnect and be fully immersed in the moment has become a modern luxury.

Today’s luxury travelers use travel to explore, learn, and reconnect with the world, relationships, and themselves.

This article is republished from The Conversation under a Creative Commons license. Read the original article.