Within any sphere of travel, it’s important to understand where audiences are looking to travel, what they want from their experience, and how their needs are changing! And despite the fact that many countries are experiencing financial crises, the demand for luxury travel is anticipated to be ‘higher than ever’ in the next five years.
However, while some luxury travellers will be seeking ways of exploring new territory, trailblazing into destinations and okay with a few bumps along the way; for some, a rediscovery of classics is what’s fresh. Luxury travel is quickly becoming all about meeting the specific needs of this segment, while remaining conscious of how the notion of 'luxury' is changing in line with today's travel trends.
So, what does this mean for travel distributors? The focus, as always in today’s travel industry, is on bespoke. There are a few overriding trends that we’re seeing within luxury travel however, which are:
So, with this in mind, we explore some of the key overriding trends which are important for travel distributors to consider, from the re-emergence of China as a main outbound travel market to the rising influence of Generation Alpha!
Given that one of the prerequisites of luxury travel is a closer, ‘exclusive’ look at a destination of choice, there are many overlapping similarities between conscious luxury travel and slow travel. This intersect can be more clearly seen when we look at a few aspects of the ‘hierarchy of needs of the luxury traveller’:
Slow travel can be determined by any instance where a traveller actively seeks out impactful, meaningful experiences in their destination of choice, and so the benefit of using this travel style to meet these luxury needs is clear.
Things to consider when you’re crafting slower experiences for your luxury travellers:
A particular recommendation for long-haul segments would be to allow them to get to grips with a country by exploring the authentic cuisine of their destination, particularly in countries where food is so much a part of local culture. Getting local experts involved is also critical, as there is also a notable shift in the narrative surrounding luxury travel where authenticity is becoming more highly priced than ‘pan-global luxury’.
Some of the top performing luxury destinations for 2023 so far, according to a recent study by luxury travel provider Carrier, have been Barbados, the Maldives, the USA, Greece, UAE, Antigua, South Africa, Italy, Spain and Kenya - which form interesting starting points when you’re considering where to send your luxury travellers on their slow travels this year, and into 2024.
Travellers of all capabilities and preferences are beginning to understand that when we travel, we impact local communities and environments. Luxury travellers are beginning to prioritise ‘local’ over surface-level experience.
This is where having a vast portfolio of activities and experiences is so essential, in order to offer your clients bespoke opportunities to get to the heart of their destination of choice. Doing so requires attention to detail - which is a hallmark of luxury travel, after all.
This vast network of local travel experts, activities and hotels is something that we offer at Hotelbeds! With thousands of properties and activities in 195+ countries worldwide, our portfolio is the only resource you need to boost your bookings and meet your clients’ demands.
A recent study from Globetrender also illuminates the fact that Millennial families (Gen Y) are looking more and more for adventurous, intrepid trips. These families are spending high and travelling far, and with family trips increasing by 185% between 2021 and 2022, we can anticipate a sharp and sustained increase in luxury travel particularly for wealthy families in the next few years.
Considering that Millennials are one of the most travelled demographics of today’s traveller, it’s safe to anticipate that the influence of their children, Gen Alpha, will only increase over the next few years.
A passive but young demographic, Gen Alpha is reliant on their Millennial parents to spend for them, which means:
The changing nature of what the modern family looks like will also be important to review, to ensure that you’re meeting the needs of today’s traveller. For example, take the UK as a segment; many families are headed up by a lone parent, 90% of which are women. So challenging the assumptions over what sort of family trips you’re offering, and how these may not always meet the demands of your market, is crucial.
However, what’s clear is that there is no better time to cater for the elite and their younger generations.
‘Premium’ travel has many names, but this segment can mostly be identified by where travellers sit on the plane - namely, those at the front. And while the premium segment may not be quite the same as luxury, the motivations, needs and travel styles are in a similar vein, so travel distributors would be remiss to discredit the growing opportunity that premium travellers present. Travel analytics companies like Forward Keys, in fact, have outlined premium travel as one to watch.
Recent insights suggest that the premium travel segment is recovering much faster than the economy segment in relation to 2019 levels. Interestingly, premium travellers also:
In fact, at the end of 2022, premium segment travellers in America had stayed 14% longer compared to 2019 levels, with particular growth within small groups and families.
Think about how you’re accommodating premium travellers, not just luxury. There is a vast segment here that’s fast-growing, spending more in-destination, spending more time in-destination, and travelling more than the economy segment.
So this means that recovery, in terms of revenue, is happening faster than visitor numbers, which is great news for host destinations and also great news for travel distributors looking to make the most of a high-spend, high-frequency traveller.
While the reinstatement of China into the world travel market will take time, the growing wealth across the region is still an important feature of the potential for outbound travel growth. Oxford Economics suggests that, at its best, this outbound travel may reach 48% of 2019 during 2023 - but this still equates to roughly 17m additional Chinese travellers this year populating international and domestic travel markets.
The reopening of China ties into the increasing demand for luxury travel, as the wealthy demographics of Asia in particular are expected to be a massive outbound source market for this style of travel in the next few years.
Travel analytics company Forward Keys suggested that in terms of recovery trends, compared to 2019 levels, China is following many of the same trends we’re seeing around the world. Given that one of the fastest growing visitor profiles around the world right now is the premium segment, this applies to China as well, meaning that many of the Chinese travellers heading out to international destinations during 2023 and into 2024 are more likely to belong to the affluent classes than in pre-2019. The Chinese traveller, therefore, is a key segment to capitalise on as travel distributors during the remainder of the year and well into 2024, even 2025 and beyond!
As a global travel partner with an expansive portfolio in China and the Asia Pacific region, we offer all our clients access to fast-growing travel segments even in the most hard-to-reach spaces, while our cloud-based technology platforms provide fast, simple access to a network of global travel products to curate your clients’ bespoke travel plans.
Put simply, working with us at Hotelbeds puts you in the right position to access some of the most valuable travel segments out there!
Alongside other key travel trends for 2023, high-impact conservation remains another exciting opportunity within the luxury travel segment.
Pelorus, who specialise in luxury trips, noted that for high net-worth travellers no longer impressed by the type of excess that ‘luxury travel’ used to once mean, experiences are becoming more about the privilege of ensuring that their presence contributes to the ‘preservation, protecting and future flourishing’ of the world’s environments.
After all, what higher privilege is there to accessing remote destinations, or experiencing first-hand the very real consequences of humanity on natural environments and wildlife, and having the ability to make a positive impact?
What’s more, a recent report from global luxury travel agency Virtuoso suggests that around 56% of Gen Z and 46% of Millennial luxury travellers are willing to pay more for eco-friendly tourism packages, with around 52% of Millennials seeking travel that preserves natural and cultural heritage.
Add this to the fact that Millennials represent 23% of the adult population on the globe, and that elite Millennials and their Gen Alpha children are an increasingly active and key segment for the luxury travel market, and you have an unmissable opportunity to cater for high-spend, eco-conscious Millennial families from around the world.
There you have it! While there are many trends to watch out for regarding the luxury travel segment, these are just a few of those that we find the most interesting especially for travel distributors.
One of the best ways to keep connected with this valuable segment within the travel industry is by partnering with Hotelbeds! With an expansive global portfolio of accommodation and ancillaries, we make it easier than ever to access high-end clients even in the most hard-to-reach spaces.