The Global Luxury Travel Consumer
By David Benady and Alex Hadwick
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authors: David Benady and Alex Hadwick, Head of Research, EyeforTravel Ltd.
DisclaimerThe information and opinions in this report were prepared by EyeforTravel Ltd and its partners. EyeforTravel Ltd has no obligation to tell you when opinions or information in this report change. EyeforTravel Ltd makes every effort to use reliable, comprehensive information, but we make no representation that it is accurate or complete. In no event shall EyeforTravel Ltd and its partners be liable for any damages, losses, expenses, loss of data, loss of opportunity or profit caused by the use of the material or contents of this report. No part of this document may be distributed, resold, copied or adapted without EyeforTravel’s prior written permission.
© FC Business Intelligence Ltd ® 2017
The Global Luxury Travel Consumer
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About EyeforTravel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Our Values. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Our Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 EyeforTravel in Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Global luxury Travel Market Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Key Luxury Travel Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Luxury Consumer Booking Patterns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 The Value of Luxury Travel Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Trends in Luxury Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Global luxury Travel Market Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 1.1 Global market value and historical growth rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.2 Forecasted growth rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 Key Luxury Travel Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.1 Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.1.1 Western Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.1.2 Emerging Europe and Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 2.2 Asia-Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 2.2.1 China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 2.2.2 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 2.2.3 Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 2.2.4 South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 2.2.5 India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 2.3 Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 2.3.1 US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 2.3.2 Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 2.3.3 Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 2.4 Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 Luxury Consumer Booking Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 3.1 Lead Times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 3.2 Devices Used During Journey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 3.3 Reaching the Luxury Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 The Value of Luxury Travel Consumers and Their Spending Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 4.1 Trips Taken and Planned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 4.2 The Value of Luxury Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 4.3 Luxury Consumer Key Spending Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 4.2.1 What do Luxury Consumers Value Most When It Comes to Travel? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515 Trends in Luxury Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 5.1 Meeting People and Telling a Story . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 5.2 Asia as the Engine of Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 5.3 Generational Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 546 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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Figure 1: Worldwide Luxury Market Value Estimate 2016 (EUR billion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Figure 2: Year-on-Year Growth in the Luxury Hospitality Market 2010-2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Figure 3: Estimated Compound Annual Growth Rate in Travel by Region from 2015 to 2025. . . . . . . . . . . . . . 20Figure 4: Top 5 Tourism Markets by Spending (USD billions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Figure 5: London Luxury Hotel Conversion Rates and Transaction Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Figure 6: Russian Travel Destinations in Europe as of Q2 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Figure 7: High Growth Destinations for Russian Premium Travel in H1 2017
Through Aviasales Metasearch Engine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Figure 8: Spending Per Trip in China – Domestic Versus International Trips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Figure 9: Chinese HNWI Visits Abroad 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Figure 10: Japan HNWI wealth change 2012-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Figure 11: Japan dollar millionaires from 2006 to 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Figure 12: South Korea HNWI wealth change 2011-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Figure 13: Growth in Outbound Journeys from South Korea, 2010-2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Figure 14: India Dollar Millionaires from 2006 to 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Figure 15: US dollar millionaires from 2006 to 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Figure 16: Brazilian HNWI wealth change 2012-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Figure 17: Change in 2016 Outbound Travel to World Regions from Brazil
Across First Eight Months of 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Figure 18: Brazilian Arrivals to Florida 2012-2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Figure 19: Lead Times for Accommodation Booking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Figure 20: Lead Times for Transport Booking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Figure 21: Lead Times for Tours and Activities Bookings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Figure 22: Research Devices Used to Plan Trip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Figure 23: Devices Used to Book Accommodation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Figure 24: Devices Used to Book Flights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Figure 25: Number of Trips Taken Per Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Figure 26: Number of Trips Planned Over 12 months - Luxury Consumers Versus Rest of Population . . . . . . 47Figure 27: Planned Domestic and International Trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Figure 28: Average Spending Per Trip in US Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Figure 29: Annual Value of Consumers Per Year in US Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Figure 30: Vacation Activities Participated in by Top 1% of US Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Figure 31: Vacation Activities Enjoyed by US Luxury Travel Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Figure 32: Chinese Millennial Luxury Traveller Motivations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Figure 33: Alternative Accommodation Options Considered Millennial Chinese Luxury Consumers . . . . . . . 55
Table 1: London Luxury Hotel Conversion Rates and Transaction Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Table 2: Russian Travel Destinations in Europe as of Q2 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Table 3: High Growth Destinations for Russian Premium Travel in H1 2017
Through Aviasales Metasearch Engine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Table 4: Japan HNWI wealth change 2012-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Table 5: Vacation Activities Participated in by Top 1% of US Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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We would like to thank Abercrombie & Kent’s marketing director Lisa Warner, Maria Pajares, managing director of
luxury hotel marketing agency Mason Rose and Richard Frampton, a travel manager at Hurlingham Travel Services
for their contributions to this report.
We are grateful to all of the data sources utilized for this report and to TapResearch for conducting our consumer
surveys.
Acknowledgements
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The global luxury goods and services market is in a state of flux. In 2016, spending across the entire of the luxury
goods market was weaker than it has been in recent years, with consumers pulling back from a variety of high-end
personal luxury goods. On the flipside, spending by luxury goods consumers into travel and tourism continued to
grow unabated and the luxury hospitality market has almost doubled since 2010. This points to a wider trend that
is being reflected across the travel market but particularly so at the top-end, as luxury consumers are often at the
leading edge of trends. Big-spenders are increasingly shifting their disposable incomes to experiential spending.
No-longer is it enough to have the expensive-watch or handbag. Now capital is going cultural.
Increasingly the luxury travellers is looking for unique experiences. We saw this in our research when we noted that
luxury consumers are more relaxed about booking their flights and accommodation closer to the date of travel but
this behavior reverses when it comes to tours and activities. Luxury consumers book tours and activites around a
month in advance of travelling but normal consumers tend to book while travelling or in the week before departing,
demonstrating that luxury travellers are booking more complex high-end itineraries. This is reflective of the luxury
traveller’s will to search out authenticity, exclusiveness and excitement on their vacation.
Travel brands cannot afford to ignore the changing habits of this hugely influential group. Already, luxury consumers
take trips at twice the rate of the general population and spend more than six times as much per annum. As
economic gains continue to accrue at the upper end of the spectrum in the West and create huge growth in
wealthy individuals in developing economies, particulaly in Asia-Pacific, their spending power is expanding
exponentially. When this is combined with these consumers’ greater emphasis on travel then the stage is set for a
major expansion in this part of the market.
2017 is beating the more downbeat forecasts for the year thus far, with previously troubled markets, such as Russia,
Brazil, and Canada returning to tentative growth, US outbound continuing strongly, Europe seeing its best economic
performance for a number of years and Japan’s luxury market defying expectations and booming.
However, it won’t be easy to win over the luxury travel consumer. Already discerning, the emphasis on the
experience will mean that brands will need to be precise in their details and impeccable in their service. This will
need to carry over to the technology they deploy, as we have found that luxury consumers are smartphone savvy
and multi-channel in their approach. Then there is the growing number of alternative accommodations, many of
which promise the ‘authentic’ experience luxury travellers crave, and will push more competition in the market.
So, read on to learn about the luxury consumer, their changing habits, and how best to capture them. We hope that
this research is of interest and use to you and your organization and do not hesitate to get in touch with questions
or research suggestions.
Alex Hadwick
Head of Research, EyeforTravel Ltd
Introduction
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Global luxury Travel market overview■■ Luxury travel is flourishing. The value of the global
luxury hospitality market has almost doubled over
the past six years, rising to USD183 billion in 2016
from USD93 billion in 2010. The highest growth
spikes came in 2012 with 19% growth and in 2015
with 17.3% growth.
■■ Although growth in the luxury hospitality market
Executive Summary
CanadaA fall in the Canadian dollar and recession hit luxury travel with assets held by Canadian HNWIs falling in 2015. However, the market is back to growing ways with outbound journeys up 4.9% in H1 2017
UKUK outbound luxury travel is suffering as the pound nears decade lows, leaving the market the worst performing for HNWI growth in 2016. However, inbound luxury travel is booming, with a 26% rise in sales to overseas tourists in the opening seven months of 2017
Western EuropeEurozone consumer confidence is at a decade-long highs, with German consumer confidence at post-reunification record levels. The consumer environment and growth in long-haul luxury traveller arrivals into the area, particularly from China and the US is pushing the region to be one of 2017’s top-performing luxury travel markets
Poland Poland’s luxury goods market increased by 15% from 2015 to 2016 and hotels and spas are expected to grow by a CAGR of 5.3% between 2016 and 2020.
South KoreaSouth Korean outbound luxury travel is booming but inbound is suffering in the current political climate, with Chinese arrivals plummeting 46.5% in the first seven months of 2017
RussiaAfter several years of decline, Russia’s outbound luxury travel market returned to growth in late 2016 and into 2017. The Caucasus, China, Thailand, and Western Europe have all seen excellent growth
ChinaChinese luxury traveller habits are changing. Although they spend more per trip than any other country, shopping is falling out of favour to around a third of trip budgets in 2017, and experiences are becoming more important.
IndiaIndia is expected to be the fastest growing luxury travel market between 2015 and 2025, although from a low base: there were just 67,800 dollar millionaires in 2006 but there is expected to be 660,800 millionaires by 2026
USThe US is home to more millionaires than the next six countries combined and the luxury travel market is still growing with luxury travel agents optimistic about 2017 and 2018 - 45% expect double-digit sales growth
BrazilAlthough still a fragile economy, there are signs of a tentative return to growth in the Brazilian luxury travel market: ForwardKeys data found international flight bookings were up 18.8% in H1 2017
JapanAlthough it may seem like a market in decline, it was the fastest growing G7 economy in Q2 2017 and Japan has the second highest number of millionaires in the world, with wealth concentrated among older Japanese consumers. From 2015 to 2016 the percentage of Japanese luxury consumers agreeing with the statement “I am more likely to travel abroad for vacation” increased from 49% to 60%
www.eyefortravel.com The Global luxury Travel Consumer | 9
with income expectations at a point not seen
in post-Reunification Germany, and business
confidence is at similarly record highs
■■ Against the euro the British pound neared lows not
seen since the Financial Crisis in August 2017 before
rebounding.
■■ Credit Suisse estimates that the USD1.5 trillion was
wiped from household wealth as a consequence of
the Brexit vote and it was the economy that lost the
most millionaires in their study.
■■ Deloitte’s indicators of UK consumer confidence and
discretionary spending in Q1 2017 were broadly
negative and this continued into Q2. However,
vacations were one of only two categories to see a
quarter on quarter improvement.
■■ EyeforTravel’s expects UK outbound journeys to
experience much diminished growth in 2017, up to a
maximum of +2%.
■■ The flipside of the pound’s decline is Britain is
experiencing a bumper year for international arrivals.
According to research by Premier Tax Free, the UK
outperformed Western European counterparts,
with a rise of 26% in sales to overseas tourists in the
opening seven months of 2017.
■■ Only just behind were Italy and Spain, reporting
increases of 25% and 23%, respectively, and France
saw a turnaround at 16% growth.
■■ The effect of terrorism on tourism has also
faded. London luxury hotel conversion rates and
transaction values were unaffected by a terrorist
attack on Westminster Bridge in March 2017.
■■ In the long-term the market is expected to achieve
a CAGR of 6.4% even though both Knight Frank and
Credit Suisse expect the region to come bottom for
growth in the number of millionaires in percentage
terms.
emerging europe and russia■■ Amadeus expects the ‘Emerging Europe’ region to
be the second-fastest growing luxury market out to
2025.
■■ Leading growth markets in this region are the Baltic
States, Hungary, Slovakia and Poland
■■ Poland was the only EU economy to avoid
recession and has seen the second longest period
slowed substantially to 4% in 2016, 2017 appears
to have seen a rebound across all luxury travel as
wealthy Chinese consumers focus back on travel,
Japan experiences high wealth creation, Brazil and
Russia come back out of recession, and the Eurozone
and North America grow strongly.
■■ Whilst the total global population expanded around
20% from 2000 to 2015, the number of luxury
consumers grew by 150% over the period, to 350
million according to Bain.
■■ The total number of billionaires stood at 2,024 in
2016, a 45% rise in the past decade.
■■ IPK International estimates that luxury travel grew
by 48% from 2010 to 2014 compared to 24% for the
remaining sectors of the travel and tourism industry.
■■ Amadeus expects a Compound Annual Growth Rate
(CAGR) of 6.2% luxury travel versus overall growth
rate of 4.8% from 2015 to 2025.
■■ Allied Market Research also projects a very similar
estimate of a CAGR of 6.4% from 2016 to 2022 for the
sector.
■■ However, there are some near term risks, with
equity values inflated. US stocks valuations have
only been higher in 1929 and 1999 and a Bank of
America Merrill Lynch Fund Manager Survey from
mid-2017 found that “a net 46% of respondents to
the latest consider stocks ‘overvalued’, the biggest
gap ever recorded in the survey, which dates to the
mid-1990s.”
key luxury Travel marketswestern europe■■ Western Europe is one of the best performing
all-round luxury markets in 2017, particularly from an
inbound perspective, with all key markets reporting
arrival growth.
■■ Wealth and purchasing power in the UK has been hit
as the pound reels from the effects of Brexit, and is
the main negative spot in the region.
■■ France and Germany are growing at their
strongest rates since 2011, Italy since 2010, and the
Netherlands since 2007
■■ The euro has strengthened against 26 of its 31 major
peers
■■ German consumer confidence is at a record,
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more than 5% at the time of writing and Chinese
consumers look to be back on the spending spree
after under-trend growth in 2016.
■■ A very large proportion of the more than 140 million
outbound journeys that will be made from China in
2017 are by luxury travellers as the market is still at a
relatively early stage in its development.
■■ This can be seen in spending per trip data.
EyeforTravel 2017 consumer survey data found
that the median reported spending category for
outbound trips is between RMB20,000 to RMB39,999
per household, equivalent to approximately
USD2,900 to USD5,000 and a 2017 Oliver Wyman
survey from early 2017 found that spending per trip
was of a similar level, at RMB20,317.
■■ Shopping is falling in importance for Chinese luxury
consumers and adventure and experiences are
growing. Whilst total spending per trip rose 3.5%
from 2016 to 2017, the amount of budget allocated
to shopping fell from 41% to 33% according to Oliver
Wyman. Hotels.com noted shopping as the prime
trip motivation falling to one-third of the sample in
2017 from more than two-thirds in 2016. A survey by
the Financial Times found 37% of trip spending went
to shopping in 2017, down from 47% in 2013.
■■ Europe is the top destination for Chinese luxury
travellers currently and is expected to continue to
be so in the near future, with France, Italy and the
UK the leading destinations, and Spain experiencing
very strong growth in 2017.
■■ Other key destinations are South East Asia, Australia,
Japan, the US, and South Korea, although the latter
two have not performed well for Chinese tourists in
2017.
■■ The ETC noted double-digit growth in arrivals or
overnight stays across all bar five out of the 29
European countries that reported data for Chinese
consumers. Macau reported a return to increased
gaming revenues across 2016 and into 2017 and a
5% increase in visitors in Q1 2017
■■ Long term prospects in the Chinese luxury travel
market appear excellent as demographics and
wealth growth support the industry. Credit Suisse
predicts that the number of millionaires will increase
by 73% between 2016 and 2021.
of uninterrupted economic growth in the Western
world since 1945.
■■ KPMG estimates that the number of affluent
consumers in Poland reached 1 million in 2016
and that their incomes will increase by nearly 30%
between 2016 and 2019, pushing the luxury goods
market to expand by 27% from 2016 to 2020 and
hotels and spas to a CAGR of 5.3% over the period.
■■ Russia saw strong growth in its luxury tourism market
and outbound travel generally up until a peak in
2013 with some 40 million outbound trips.
■■ The luxury travel market was helped by Russian
having the highest wealth disparity of any major
economic power, with the top decile of wealth-
holders owning 89% of all household wealth.
■■ Post-2013 the luxury travel market was hit by major
declines in the value of the rouble, worsening a
recession that lasted for seven quarters until late 2016.
■■ Growth in luxury spending had returned in H2 2016.
■■ Russian shopping in Italy grew by 3% in 2016, the
London Luxury Quarter reported that spending in
Q1 2017 by Russians grew by 88%, and Worldpay
note that Russian spending in June 2017 in the UK
increased by 25%
■■ The European Travel Commission (ETC) noted in its
Q2 2017 report a broad-based recovery of Russian
travellers across the destinations it measures, with
Turkey growing by 88%.
■■ The domestic luxury travel market has also
benefitted strongly from the downturn. Contactlab
estimates that foreign spending as a proportion of
Russian luxury consumers overall travel budgets was
nearly 90% in 2014 but this share fell precipitously in
2015 to around 65%. Aviasales recorded an increase
of 4% in their site’s domestic flight bookings in H1
2017.
■■ Key growth destinations Aviasales has measured for
Russian premium travel in 2017 are the Caucasus
(Armenia + 240%, Azerbaijan, +92%), China (161%),
Thailand (+91%) and Western Europe (Germany
+122%, Italy +121%, Spain +173%).
China■■ The yuan has consistently increased in value against
the dollar since the start of the year, rising by
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agreeing with the statement “I am more likely to
travel abroad for vacation” increased from 49% to
60%.
■■ The growth in luxury travel is skewed toward older
Japanese consumers, who have benefited from
years of company employment, higher rates of
home ownership, generous pensions and if they
have worked for the same company throughout, an
average final bonus of more than USD200,000
■■ More than 80% of Japanese travellers report
spending their last vacation inside the country.
■■ Internationally, Japanese luxury consumers principally
travel to the US, Western European (particularly France,
Germany, Italy, and Spain), and developed countries
in Asia. According to Affluential Hawaii topped the list
of destinations that high-end Japanese travellers have
visited in the past 12 months up to May 2016 and was
also the top destination they were planning to visit in
the following 12 months.
■■ Japan’s cruise industry is booming, with Japanese
passengers rising 12% in 2016.
australia■■ Australia and New Zealand already have a very
mature luxury travel market and so is expected to
have one of the lower growing regional markets.
However, Australian consumers are noted as having
some of the highest average spends in the world
already.
■■ Australia as an inbound luxury travel market will also
benefit from the growing Asia-Pacific market, with
EyeforTravel noting that Chinese consumers put
Australia as the destination they would most like to
visit in 2017.
south korea■■ South Korea is seeing a booming outbound luxury
travel market, but a struggling inbound one in 2017.
■■ The luxury market is supported by strong wealth
growth. CapGemini finds that from 2011 to 2015 the
wealth held by South Korean HNWIs increased by
39% and Credit Suisse expects the overall number of
dollar millionaires to grow by 41% by 2021.
■■ The percentage of South Korean luxury travellers that
agreed with the statement that they would travel
■■ The post 90s generation spend more on
international travel than any other generation as
a proportion of income at 35%. By comparison
post 80s and 90s travellers spend 27%. EyeforTravel
research found that ages 36-55 spent the most but
18 to 35 year olds were only just behind despite
lower incomes.
Japan■■ Although on first glance it seems a poor market for
investment Japan is an excellent source of luxury
travellers, with recent wealth growth bolstering
market dynamics. Japan remains an extremely
affluent society and this wealth is more evenly
distributed than in comparable Western economies,
with the top 1% earning salaries of USD240,000
compared to USD1.2m in the US
■■ CapGemini estimates that the wealth of Japanese
HNWIs has been rising since 2011. In the last
available year for data – 2015 – their US dollar wealth
jumped by 11.4% (CapGemini, 2017). Knight Frank
estimates that in the decade preceding 2016 the
number of dollar millionaires rose by 35% to 1.166
million and this will further rise to 1.516 million by
2026, an increase of 30%.
■■ Japan is in its best period of expansion since the turn
of the Millennium, with more than six consecutive
quarters of growth and was the top-performing G7
economy in Q2 2017, with private consumption and
domestic demand growing 0.9% and 1.3% in the
period, respectively. Japanese unemployment is at a
23-year low and the ratio of open jobs to applicants
at a 43 year high.
■■ Whilst Japan has less UHNWIs, there is a broad base
of highly affluent consumers. So much so that the
country has the second highest number of dollar
millionaires in liquid assets after the US according
to both Knight Frank and CapGemini, with the latter
reckoning that the nation has more millionaires than
Germany and China combined.
■■ Growing wealth has pushed Japanese outbound
travel back into growth, expanding 5.6% in 2016 and
6.3% across H1 2017
■■ Affluential’s research noted that from 2015 to 2016
the percentage of Japanese luxury consumers
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the statements “I mainly buy luxury brands when
travelling” and “I prefer travel destinations where I can
buy luxury products”, 74% and 79% agreed, growing
from 61% and 62% in 2015. This was the highest
rate of agreement out of the eight Asian economies
studied by Affluential.
■■ 92% of Indian luxury travellers reported that they
booked online and 76% on smartphones.
us ■■ Knight Frank estimates that the US had nearly 4.4
million individuals with more than USD1 million in
liquid assets in 2016, which is more than the next
six countries combined on their list. Credit Suisse
estimates that the US has 41% of the world’s dollar
millionaires and this increases for Ultra-High Net
Worth (UNHW) individuals, where the US is home to
52% of the global total.
■■ Credit Suisse estimates that the number of asset
dollar millionaires will grow by 33% from 2016 to
2021.
■■ The wealthiest 5% of US households take an average
of 14.3 trips per year, about half for business and
half for leisure and spend USD3,115 per person per
vacation. This compares to some 4.8 trips a year on
average taken by all US travellers.
■■ The higher a household disposable income, the
more likely they are to travel to Western European
destinations, with Italy, France, the UK and Germany
the main points of travel.
■■ US North East has the greatest concentration of
wealth in the country. According to Equifax, the
states with the highest total income per household
are, in order, Connecticut, Delaware, Virginia, New
Jersey, and Maryland, and the states with highest
total assets per household are Connecticut, New
Jersey, Massachusetts, Washington D.C., and
California.
■■ The luxury travel market is performing well, which is
in contrast to the US personal goods luxury market
which Bain predicts will have a rough 2017 and
defies the relatively poor performance from the
dollar across the first half of 2017.
■■ A survey of luxury travel management firms by
Strategic Vision in February 2017, reported that 58%
more rose to 79% in 2016 from 71% in 2015
■■ Overall outbound journeys from South Korea grew
by nearly 19% year-on-year in H1 2017.
■■ In terms of trends and reaching the South Korean
luxury consumer, recent years have been marked by
the rise of the independent South Korean traveller
and the fall in group travel
■■ Generally, the average South Korean traveller and the
luxury traveller tends to favour regional destinations,
with Japan top. South Koreans account for more
than a fifth of arrivals to Japan.
■■ Until recently the country’s inbound luxury travel
market was booming, heavily boosted by the strong
retail environment, with South Korean duty free sales
to foreign tourists increasing approximately 40% in
value in 2016.
■■ However, international tensions have hit the market.
ForwardKeys data shows a decrease in international
passengers staying four to eight nights of -24% in
the first half of 2017 and a projected -26% in the
second. Chinese arrivals were down 46.5% in the first
seven months of 2017.
india■■ India is expected to be the fastest growing luxury
market between 2015 and 2025 in Amadeus’ study,
with a CAGR of 12.8% across the period.
■■ Part of this growth is the fact that India was coming
from a low base, with an estimated 67,800 dollar
millionaires in 2006 but this will explode to 660,800
millionaires by 2026, making the country the sixth
biggest home of millionaires in the world by 2026,
according to Knight Frank.
■■ Destinations in Western Europe, the United Arab
Emirates, the Maldives and the Seychelles are
popular among luxury Indian travellers. The US is also
on the rise, with Affluential finding that Los Angeles
was the top destination noted by their respondents
in the coming 12 months.
■■ The domestic market is also expanding rapidly,
with IATA noting that domestic Revenue Passenger
Kilometers (RPKs) grew by 14.6% in 12 months up to
March 2017
■■ Indian luxury travellers are very keen shoppers:
When asked in 2016 whether they agree with
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• TheBrazilianCentralBankalsonotedthat
expenditure on international travel grew by 10.1% in
June 2017 compared to the same month in 2016
Canada■■ Canadians are some of the highest per capita
spenders on travel in the world. However, a
recession in 2015 and intermittent growth in 2016
hit Canadians spending power and consumer
confidence, including at the top, and the luxury
travel market has only recently begun to recover
■■ The number of HNWIs in Canada decreased by 3.2%
in 2015 and their wealth decreased by 2.8%.
■■ From early January 2013 to early January 2016 the
Canadian dollar lost 28% of its value against the
dollar.
■■ The number of Canadians returning after one or
more nights outside the country decreased 2.7%
from 2015 to 2016, although it appears that the
travel to the US and the bottom of the market saw
the brunt of this as the number returning from
journeys outside the US grew by 3.7%.
■■ The Canadian economy is expected to be one of the
leading G20 nations in 2017, with growth across the
year expected to be 2.7%,
■■ Canadian international journeys increased by 4.9%
overall and, excluding the US, 4.7% in the first five
months of 2017 (Statistics Canada, 2017). Destination
Canada reported that domestic expenditures rose by
6.6% in Q1 2017.
middle east■■ Oil rich Gulf Cooperation Council states such as Saudi
Arabia, Kuwait, Qatar and the UAE have contributed
strongly to global luxury travel in recent years.
However, Amadeus estimates the general travel
market for Kuwait, Qatar and UAE will grow by 4.4%
while luxury travel overall across the Middle East
region will grow by 4.5% - one of the lower rates.
■■ Knight Frank notes that from 2015 to 2016 the
number of millionaires failed to grow.
■■ This is reflective of the fact that any of these
countries already have extremely high wealth levels
and living standard, such as Qatar, and the transition
the world is making away from fossil fuels.
of firms’ clients are optimistic about domestic travel,
44% saw no change and just 2% were “cautious”.
■■ A 2017 TMR survey of more than 650 U.S. and
Canadian travel agents specializing in luxury
travel found that 44% had seen double-digit sales
increases in sales, 25% experienced 25% increases,
and 12% by more than 50% in the previous year. In
the 12 months following the survey, 45% expected
double-digit growth.
■■ The Bureau of Economic Analysis and the National
Travel and Tourism Office (NTTO) reports that
spending by US travellers rose 6.3% in H1 2017 and
air departures from the US were up 8% in H1 2017
according to ForwardKeys.
■■ The UK in particular has seen excellent performance
across 2017 from US tourists, with H1 2017 seeing a
25% growth in arrivals from North America.
■■ Amadeus expects this already enormous luxury
market to continue growing, and growing ahead of
the overall travel market, at more than 6% per year
brazil■■ Brazil’s luxury travel market has only just started to
come out of a painful and steep decline following a
recession and fall in the value of the Brazilian real.
■■ CapGemini notes that the wealth held by HNWIs fell
every year between 2012 and 2015.
■■ Outbound travel from Brazil collapsed in 2016, falling
15% in the first eight months of 2016 according to
the World Travel Monitor.
■■ As the top destination for Brazilian luxury outbound
travel, the US has been hit particularly badly. From
2013 to 2014 Brazilian arrivals to Florida increased
by nearly 37% but then fell -10.1% YoY in 2015 and
28.7% in 2016.
■■ The luxury domestic travel market has benefited –
Expedia reported a YoY increase of more than 55% in
the country’s luxury segment 2016.
■■ There are signs of a return to growth for Brazil’s
luxury travel market in 2017:
• DomesticRPKsincreasedinMarch2017breakinga
run of 19 consecutive months of falling demand and
increased throughout the remainder of H1 2017.
• Internationalflightbookingsrecordedby
ForwardKeys were up 18.8% in H1 2017.
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between the two populations. Nearly 36% of
luxury consumers use the mobile to research their
trips, compared to 32% for non-luxury consumers,
demonstrating that luxury travel consumers are less
likely to switch devices.
■■ Non-luxury consumers are twice as likely to book
flights and accommodation through a “face-to-face”
travel agent and more likely to use a call center
■■ Lisa Warner at Abercrombie and Kent says: “The key
to marketing to the luxury traveller is a bespoke,
integrated and consistent approach – a consistent
message, integrated across all channels that clearly
communicates how we can improve their quality of
life.”
■■ Hotels are linking up with influencers on Instagram.
Beautiful Destinations (8.4 million Instagram
followers), Luxury World Traveller (2.6 million
followers), and OnlyForLuxury (2.4 million followers)
all provide sponsorship packages. Luxury brands
such as Aman Resorts has a widely-followed account
as does Mr & Mrs Smith, an agent for boutique
hotels.
■■ WeChat, which is critical for reaching Chinese
luxury consumers, offers customization of pages
and additional functionality. Luxury travel brands
can control their image on the platform and reach
the consumer with targeted information when
consumers are researching and also when they are
travelling by tapping into location data.
■■ WeChat users can book in-store consultations
directly from the app, which is important given that
luxury travel agents still remain important at the top
end of the market.
The value of luxury Travel Consumers■■ Luxury consumers take an average of 5.6 leisure trips
per year against 2.8 a year for the rest of the sample.
For the former, these are equally split between
domestic trips and international trips, at an average
of 2.8 for both. Meanwhile, the rest of the population,
which has to be more conscious of budget, is slightly
more predisposed to domestic travel, taking an
average of 1.3 international trips and 1.5 trips within
their own country.
■■ Luxury travellers also plan twice as many trips than
■■ Instead greater growth in the luxury travel market
will be found in other Middle Eastern countries,
though from a lower base. The CAGR for emerging
nations Lebanon, Iran, Jordan and Egypt is 8.9%.
luxury Consumer booking Patterns■■ Luxury consumers book accommodation and
transportation later than average consumers:
• 54%ofluxuryconsumersbookbetweenoneweek
and four weeks from their date of travel, as opposed
to 33.5% for normal travellers.
• 21.4%ofnon-luxuryconsumersprefertobook
between two and four months from departure, as
opposed to 15.3% of luxury travellers, and 12% chose
to book six months or more compared to 6% of
luxury travellers.
• 54.8%ofluxurytravellersbooktransportation
between one and four weeks before travelling as
opposed to 36.5% of the rest of the sample.
■■ However, when it comes to tours and activities,
interestingly the trend is reversed. More than double
the percentage of non-luxury travellers report that
they book their vacation activities whilst they are
on holiday at 35.8%, compared to just 14% of luxury
travellers. 54.8% of the luxury sample book tours and
activities between one and four weeks before they
depart versus 31.5% of the remainder of our survey
population.
■■ The longer lead times for tours and activities
illustrates the importance luxury consumers put on
their experience, as they book more expensive and
complex itineraries that are more likely to need to be
booked in advance.
■■ Double the rate of non-luxury travel consumers
chose to stay with friends and family on their trip.
■■ Luxury consumers are much more comfortable using
smartphones to book:
• Over30%ofluxuryconsumershavebooked
travel accommodation using their mobile phones
compared to just 13% of standard travellers.
• 30.2%ofluxuryconsumershaveusedtheir
mobiles to book transport compared to 18% of
standard travellers.
■■ When it comes to research, the difference is far
less pronounced with only a very small differential
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properties on social media through words, photos
and videos.
■■ Other brands have had success in bringing guests
together and creating bonds over experiences.
■■ A survey of Chinese millennial luxury travellers
found that they often think of five-star hotels
as standardised and lacking in distinctiveness.
Accommodation suppliers therefore need to have a
distinctive offering.
■■ 42% of respondents to the survey said they wanted
to stay in a hotel with a unique brand style and 40%
wanted an artistic design.
■■ Luxury hotels are increasingly taking heed of
environmental concerns, with some installing solar
panels and becoming carbon neutral as wealthy
millennial travellers like to be socially responsible
travel and to build links between them and local
communities.
■■ Several luxury brands that have opened hotels in key
locations. Italian luxury watch and jewellery brand
Bulgari has hotels in Milan, London and Bali. Armani
has hotels in Dubai and Milan. Versacci has Versacci
Palazzo hotels in Australia and Dubai. Maison
Moschino is a 65-room hotel in Milan
■■ Millennials expect a connected experience during
their luxury trips and use mobile apps as a form of
digital butler.
■■ One of the biggest trends over the coming decade
will be the rapid growth of luxury outbound travel
from Asia. This growth is fuelled mainly by the
top source markets of China, India and Indonesia.
Chinese consumers alone will buy 44% of the
world’s personal luxury goods by 2025 according to
McKinsey.
■■ Asian travellers are increasingly coming from second
tier cities in these nations and are not just spending
on cosmetics, jewellery and fashion, but increasingly
on events and experiences.
■■ American Express reported last year that there had
been a 110% increase in wealthy travellers planning
to use retail agents in 2017 rather than OTAs.
other consumers. A huge 16% of luxury travellers
report planning 10 or more trips per year, compared
to just 2.5% of the other consumers in the survey. A
further quarter of the luxury travel sample plan to
take between five and nine trips in the 12 months
after the survey was taken, far above the 6.3% of
lower income consumers.
■■ 35.7% of non-luxury consumers plan to vacation
solely in their own country, compared to 16.2% of
luxury travellers. Instead luxury consumers lead
ordinary travellers by just over 26 points when
planning to vacation both internationally and
domestically.
■■ Our survey found that luxury consumers spend
USD5,365 per trip, more than three times more than
the rest of the sample, who spent USD1,690. When
multiplied by the average number of trips taken
each year, luxury consumers spend some USD30,208
per year on holidays while the rest of the sample
spend USD4,732 or, to put it another way, wealthier
consumers outspend standard travellers by over six
times.
■■ This may explain the belief by many in the travel
industry that luxury travel accounts for up to a half of
spending in the entire sector.
Trends in luxury Travel■■ Luxury travellers are pushing further afield to seek
experiences. A survey by Tourism Economics predicts
that globally, long-haul luxury trips will overtake
short distance trips by 2025.
■■ “Luxury travel has evolved from being primarily
about the 5-star glamour and glitz to becoming far
more centred on experiential travel.… The stories
that resonate most amongst the luxury traveller
fraternity are those garnered from local interactions
and authentic experiences that truly enrich their lives
and that of those they are meeting and interacting
with.” Lisa Warner, marketing director at A&K.
■■ Luxury holiday home rental service Thirdhome
has advertised for a “storyteller” to promote its top
exeC
uTiv
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ma
ry
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From the glamour of first class air travel and five-star
hotels to the gruelling challenge of a trek across the
frozen wastes of Antarctica, luxury travel has expanded
to meet almost every conceivable whim and desire and
is in reach of more consumers than ever before.
Global luxury travel, which is often defined as trips
including business and first-class air travel and hotel
stays valued at over EUR500 a night, has boomed in
recent decades as heady financial markets and rapidly-
developing economies have fuelled huge increases in
personal wealth for a lucky few. Luxury travel faced a
downturn following the 2008 financial crash, but has
bounced back and is now set to outstrip the overall
travel market over the next ten years according to
estimates.
Travel operators and hotels looking to increase sales
in the luxury travel market need to keep abreast of
changing consumer behaviour.
Where once luxury was mainly associated with
grandeur, service and overt displays of opulence, many
of today’s affluent tourists seek deeper, more enriching
experiences. There has been a rapid increase in luxury
hotels across the globe. At the same time, emerging
areas such as eco-tourism, adventure holidays,
educational trips and bespoke cultural and culinary
1.
Global luxury Travel Market Overview
Figure 1: Worldwide Luxury Market Value Estimate 2016 (EUR billion)
Worldwide luxury market, 2016E (€billion)
Source: Bain & Company, 2016a
Total 2016E
4%
1,081
Designer furniture
3%
33
Yachts
0%
7
Fine food
4%
46
Luxury cars
8%
438
Luxury cruises
5%
2
Fine art
0%
Growth 2015-16E
39
Luxury hospitality
4%
183
Private jets
-5%
18
Fine wines & spirits
4%
66
Personal luxury goods
-1%
249
www.eyefortravel.com The Global luxury Travel Consumer | 17
become more “outer-directed”, seeking more personally
enriching experiences. This is in line with Maslow’s
Hierarchy of Needs which suggests that as people
become richer, they move beyond the need to show
off their wealth and build their status. They move to the
highest level of the hierarchy, that of self-actualization.
They seek out personal fulfilment through education,
travel and culture. Many of the emerging super-rich of
the past three decades seem to be making this journey.
This benefits luxury travel operators, especially those
among them those offering experience-based trips that
combine adventure, culture and learning with comfort
and service.
Meanwhile, there is a trend towards casualization across
society that is affecting luxury travel, with more relaxed
dress codes and an easy-going approach to service.
According to the Bain report, sales of luxury denim have
exceeded EUR3 billion in 2016 (Bain & Company, 2016a).
1.1 Global market value and historical growth rates
Luxury travel is flourishing. The value of the global
luxury hospitality market has almost doubled over the
past six years, rising to USD183 billion in 2016 from
USD93 billion in 2010. The highest growth spikes came
in 2012 with 19% growth and in 2015 with 17.3%
growth, though this slowed substantially to 4% growth
in 2016.
Crucially, the number of luxury consumers and luxury
spending rates are accelerating ahead of overall
growth rates. Whilst the global population expanded
around 20% from 2000 to 2015, the number of luxury
consumers grew by 150% over the period to 350 million
according to Bain (Financial Times, 2015). Similarly, the
luxury segment of the travel industry is outperforming
the whole. IPK International estimates that luxury travel
grew by 48% from 2010 to 2014 compared to 24% for
the remaining sectors of the travel and tourism industry
(Travel Daily Middle East, 2015). Tourism Economics
data measuring outbound flights found that the luxury
segment -business and first-class flights - grew at a
compound annual growth rate of 4.5% between 2011
and 2015, compared to 4.2% CAGR for overall travel.
vacations are of huge interest to luxury travellers. The
really wealthy can even book a trip into space. Travel
as a form of geographical and personal exploration is
not confined to the back-packer generation. The spirit
of experimentation and discovery extends to the very
richest tourists.
Several trends are working in favour of global luxury
travel. For the swelling numbers of the wealthy, there
has been a marked change in spending patterns. They
have switched away from conspicuous consumption of
luxury goods and instead they have increased spending
on leisure and travel. For many wealthy people, overt
displays of material opulence seem somewhat outdated
and experiences are the new social currency.
This is particularly the case in China, where a transition
appears to be occurring. A crackdown on corruption
in China has led to wealthy business people becoming
more circumspect about showing off their wealth
inside the country for fear of drawing attention to their
activities. High taxes on luxury imports has created a
push factor for Chinese luxury consumers, incentivizing
them to buy goods while travelling (Financial Times,
2015).
Bain & Company’s Luxury Goods Worldwide Market
Study, Fall Winter 2016 shows that spending on
personal luxury goods has been flat for several years but
travel is growing. Between 2015 and 2016, the report
estimates that EUR183 billion was spent worldwide on
luxury hospitality, which represents a 4% rise on the
previous year and fine food spending rose 4% to EUR46
billion. Luxury cruises were up 5% to EUR2 billion. As
the report notes: “Luxury consumption shifted away
from goods towards experiences such as travel and
gastronomy which grew faster than luxury goods by
at least five percentage points. The best performing
categories were luxury cars, hospitality, fine wines and
spirits and fine food.” (Bain & Company, 2016a)
While the freshly-minted millionaires of the past two
decades initially favoured the showy accoutrements
of wealth – diamonds, gold and high fashion couture
– their tastes have developed over recent years to
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This surge in the numbers of the wealthy, and the
ultra-wealth in particular, has triggered an explosive
growth in the building of luxury hotels, the launch of
premium airline services and a trend to innovation in
luxury travel.
For ultra-premium customers, there is a hot new
market in private jet tours. Luxury tour operator
Abercrombie & Kent has offered a chartered Boeing
757 with 50 seats that convert to flat beds. Luxury
hotel group Four Seasons has fitted out the same
aircraft for luxury passengers and has flown it around
the world using its hotels as stopping off points.
Crystal Luxury Air is teaming up with Peninsula Hotels
and will fly guests around the globe to ten of its top
hotels. The fare is USD159,000 per person (Forbes.com,
2016). Hotels have also branched out into cruise travel.
Ritz-Carlton announced that it is building a series of
three luxury cruise liners that are due to launch from
2019 and several hotels, such as the Wellesley London,
the Four Seasons in the Maldives, and the Borgo Santo
Pietro Tuscany, operate superyachts for their clientele
and charge in the tens of thousands of dollars (The
Telegraph, 2017).
Amadeus expects a Compound Annual Growth Rate
(CAGR) of 6.2% luxury travel versus overall growth rate
of 4.8% from 2015 to 2025 (Amadeus, 2016). Allied
Market Research also projects a very similar estimate of
a CAGR of 6.4% from 2016 to 2022 for the sector (Allied
Market Research, 2016).
This expansion in market size is driven by the growth
in the both the numbers of wealthy households and
also the wealth that they hold. Massive expansion from
developing economies, particularly in Asia-Pacific is
creating the most exciting opportunities, but it is still
worth noting that the wealthiest markets in North
American and European are growing, and are expected
to continue to grow over the next decade.
In 2016, there was a rise in the number of Ultra-High Net
Worth Individuals (UHNWIs) - those with net assets worth
over USD30m - according to the Wealth Report 2017 by
property consultancy Knight Frank. The number of such
wealthy people declined in 2015, but bounced back in
2016 rising by over 6,000 worldwide to 193,490 and the
total number of billionaires rose to 2,024, a 45% rise over
the past decade (Knight Frank, 2017).
Figure 2: Year-on-Year Growth in the Luxury Hospitality Market 2010-2016 (USD Billions)
Source: Bain & Company, 2016b, Bain & Company, 2013
$200
$180
$160
$140
$120
$100
$80
$60
$40
$20
$02016
$183
2013
$138
2015
$176
2012
$127
15.1%
18.7%
8.7%
2014
$150
2011
$107
2010
$93
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
8.7%
17.3%
4.0%
n Value (US$ billions) n Year-on-year percentage change
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individuals are more likely to be investors and hold large
amounts of that wealth in equities.
Negative bond yields, quantitative easing, and negative
or very low interest rates have hurt savers and pushed
them towards riskier assets. The bull market in US
stocks pushed the market to record highs at the time
of writing. A report by investment firm GOM suggested
that US stocks are currently very expensive compared
to historical norms to the point that valuations have
only been higher in 1929 and 1999 (MoneyWeek, 2017).
A Bank of America Merrill Lynch Fund Manager Survey
from mid-2017 found that “a net 46% of respondents
to the latest consider stocks ‘overvalued’, the biggest
gap ever recorded in the survey, which dates to the
mid-1990s.” (CNBC, 2017)
There does appear to be quite a bit of room yet left in
the global economy, with most developed economies
seeing falling unemployment and hitting better
growth rates than in the recent past but the number of
analysts believing we are nearing the end of the current
business cycle is growing. As the Federal Reserve and
European Central Bank look to roll back the ultra-loose
monetary policies of recent years this could mark a shift
and expose both consumers and companies who have
been hiding weaknesses behind cheap credit, although
both banks have been, and will be, cautious in reducing
market support.
In the event that a recession or sustained fall in the value
of equities does occur, it seems the momentum will carry
the global economy through 2017 and push the spectre
of a possible downturn back into 2018. Any recession
is far less likely to be of the size and systemic nature of
the Great Recession following 2008, likely following a
far shallower course in developed markets but also one
in which the return to growth is very weak as fewer
levers are available for policy makers to pull. The Bank
of America Merrill Lynch survey also notes that asset
managers’ cash levels are at multi-year highs, suggesting
that there is an awareness of overvaluation in the market.
However, such trips are way out of reach for many
luxury travellers. The wealthiest 5% of households in the
United States have incomes of USD200,000, while the
wealthiest 1% earn USD400,000 or more, according to
the 2016 Future of Luxury Travel Report by Resonance
(Resonance, 2016). Even these travellers might baulk at
the air trip from Crystal and Peninsula Hotels costing
one third of their annual income. Many travel agents
talk of luxury clients spending between GBP15,000 -
GBP25,000 per family on their trips.
1.2 forecasted growth ratesLuxury travel will continue to boom, especially relative
to the wider travel industry. The gap between the
growth of luxury travel and standard travel is expected
to widen over coming years, according to Tourism
Economics. Luxury travel trips will grow at 6.2% CAGR
between 2015 and 2025 while overall travel will grow at
4.8%, says the company (Amadeus, 2016).
Fuelling the rise of luxury travel will be further growth in
the numbers of wealthy people. Knight Frank estimates
that individuals with net assets worth over USD30m –
so-called “ultra-high net worth individuals” - will grow
by 12% in Europe but by 91% in Asia over the coming
ten years. The number of millionaires in the world could
double between 2006 and 2026. Certain countries will
see “stellar” growth among the richest, says the report.
Vietnam is expected to have the largest expansion
of UHNWIs, rising 170% to 540 over the next decade
while millionaires in the country are expected to climb
2.5 times from 14,300 to 38,600. The global growth of
UHNWIs will be 43% by 2026 (Knight Frank, 2017). In the
long-term, this rising number of wealthy individuals are
likely to drive a strong surge in spending on premium
tourism.
In the medium-term, however, there are some risks
that should be noted. Unusual policy, inflation, and
investment environments appears to be pushing some
asset classes to be overvalued. This is of particular
concern to the luxury travel market as wealthier
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Europe and the United States are responsible for
the bulk of the world’s outbound luxury travel trips
- accounting for 64% of the total, despite making up
only 18% of the world’s population, according to the
Amadeus report on Luxury Travel (Amadeus, 2016).
But the picture is likely to change markedly over
coming decade with the highest growth in luxury travel
coming from emerging markets.
The compound annual growth rate (CAGR) in luxury
travel from North America and Western Europe
between 2015 and 2025 is expected to rise at just
above 6%. However, the greatest growth is expected
from South Asia, mainly India, where luxury travel will
grow by nearly 12% CAGR. Emerging Europe, which
comprises much of Eastern Europe, is expected to grow
by over eight per cent and Southeast Asia will also grow
by eight per cent (Amadeus, 2016).
2.1 europe2.1.1 western europeWestern Europe will continue to be a dominant force
in global luxury travel with large numbers of affluent
outbound consumers travelling in the region and beyond
as well as being home to so many of the top locations for
Key Luxury Travel Markets
Figure 3: Estimated Compound Annual Growth Rate in Travel by Region from 2015 to 2025
Source: Amadeus, 2016
14%
12%
10%
8%
6%
4%
2%
0%North
AmericaNortheast
AsiaEmerging
EuropeNorth AfricaWestern
EuropeMiddle
EastSoutheast
AsiaSouth
AmericaSouth Asia
Oceania
n Overall travel compound growth 2015-2025 n Luxury travel compound growth 2015-2025
www.eyefortravel.com The Global luxury Travel Consumer | 21
economic engine and source of one of the highest
rates of outbound travel in the region and globally.
Consumer confidence is at a record, with income
expectations at a point not seen in post-Reunification
Germany, and business confidence at similar record
highs (DW, 2017).
The UK on the other hand is seeing a period of
instability resonating out from its decision to leave the
European Union. The most obvious effect of this has
been a fall in the value of the pound that has pushed
inflation above average wage growth. Against the euro
the pound is now nearing lows not seen since the
depths of the financial crisis. Consumers of luxury travel
products will be far more insulated from this effect than
other consumers but nonetheless, purchasing power
has been diminished and vacation spending is not
going to be as strong as previous years. Both Knight
Frank and Credit Suisse note that largely due to the
currency fluctuations the UK performed particularly
badly in 2016 for wealth held by residents. Credit Suisse
estimates that the USD1.5 trillion was wiped from
household wealth as a result of the vote and it was the
economy with the most significant loss of wealth per
adult and also in millionaires that they measured (Credit
Suisse, 2016).
It appears there is a continuation of diminishing
confidence and wage and GDP growth for the UK into
2017. Wage growth has been behind inflation across 2017
and this has helped to push the UK to the lowest GDP
luxury travel, such as London and Paris. The largest luxury
travel spenders in this area, broadly in line with overall
travel market sizes, are the British, French, and Germans.
It is a mixed picture for these major economies, with the
Eurozone appearing to be rebounding after difficult years
but the UK is peering into a murkier economic picture.
Eurozone economic indicators are at multi-year highs
across the board. Eurozone confidence hit decade long
highs in the first half of 2017, helped by diminishing
political risk as the support for populist candidates in
core economies faded. Eurozone unemployment fell to
eight-year lows, and GDP growth in several economies
reached multi-year highs, pushing up household incomes
and consumer spending. France and Germany are growing
at their strongest rates since 2011, Italy since 2010, and
the Netherlands since 2007 (Bloomberg, 2017a). This has
pushed Eurozone household consumption spending up
3% YoY in Q1 2017 (ECB, 2017).
The Euro has also made gains against almost every
other major currency, particularly the dollar, with
Bloomberg reporting that: “The euro has strengthened
against 26 of its 31 major peers, with only the Mexican
peso, the Czech koruna, the Polish zloty, the Hungarian
forint and the Swedish krona withstanding its advance,”
giving luxury consumers greater purchasing power
when travelling outside the area (Bloomberg, 2017b).
German consumers are in a particularly buoyant mood,
which is excellent news given its positions as Europe’s
Figure 4: Top 5 Tourism Markets by Spending (USD billions)
World’s top tourism spenders – international tourism expenditure 2016
UNWTO, 2017
0 50 100 150 200 250 300
China
USA
Germany
UK
France
261 USD billion
122 USD billion
81 USD billion
64 USD billion
41 USD billion
US$ billion
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experiencing a bumper year. According to research
by Premier Tax Free, the UK outperformed Western
European counterparts, with a rise of 26% in sales
to overseas tourists in the opening seven months of
2017. Only just behind were Italy and Spain, reported
increases of 25% and 23%, respectively, and France
saw a turnaround at 16% growth (TR Business, 2017a).
Both Spain and Italy are following on from strong
performances in 2016 for luxury travel, the former
boosted by Russian tourists avoiding riskier destinations
and increased German arrivals, and the latter’s luxury
tourism market reportedly growing 7% in 2016 (Il Sole
24 Ore, 2016).
Internal economic and wealth growth and rising
external visitors to the continent is pushing Western
Europe to be one of 2017’s top performers in luxury
travel, which is in stark contrast to 2016. Although
terrorism has presented a consistent risk to major
European markets its effect appears to be diminishing.
France and Belgium suffered in 2016 as a result of
attacks, with long-haul markets particularly affected.
Attacks in Europe across 2017 don’t appear to have
had the same effect. ForwardKeys only found virtually
negligible decreases following attacks in London and
growth in the G7 across H1 2017. Deloitte’s indicators
of consumer confidence and discretionary spending in
Q1 2017 were broadly negative and this continued into
Q2. Although it did note that vacations were one of only
two categories to see a quarter on quarter improvement
(Deloitte, 2017). The UK Office of National Statistics notes
that from April to June 2017, the number of outbound
journeys grew by only 1%. (ONS, 2017).
This broadly accords with EyeforTravel’s expectations
from its 2016-2017 UK Consumer Report, which
expected outbound journeys to experience much
diminished growth in 2017, up to a maximum of
+2% but generally trending towards zero net growth
(EyeforTravel, 2016a). For luxury travel from the UK,
the performance will be slightly better but much will
depend on the value of the pound. It hit an eight-year
low against the euro in August 2017 before recovering
but has performed much better against the dollar,
reaching a post-Brexit high in September, and other
major currencies at the time of writing.
Europe will also continue to benefit from being the
largest market for inbound spend on luxury goods.
The flipside of the pound’s decline is that Britain is
Figure 5: London Luxury Hotel Conversion Rates and Average Values
Source: 80 Days, 2017
£1,800
£1,600
£1,400
£1,200
£1,000
£800
£600
£400
£200
£0Oct 16Sep 16 Feb 17 May 17Jan 17 Apr 17Aug 16Jul 16Jun 16 Dec 16 Mar 17Nov 16
0.50%
0.45%
0.40%
0.35%
0.30%
0.25%
0.20%
0.15%
0.10%
0.05%
0.00%
n Average transaction value (£) n Conversion rate (%)
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in purchasing-power-standard terms has shown
substantial convergence toward the EU average”
(Bloomberg, 2017c). This has led consumers incomes in
these economies to rapidly head towards EU averages
and built new markets of luxury consumers, albeit from
small bases compared to Western Europe.
Poland was the only EU economy to avoid recession
and has seen the longest period of uninterrupted
economic growth in the Western world since 1945.
Since the OECD began to collect consistent data
on Poland in 1995, it has yet to record a recession,
which puts it second only to Australia (Australian
Trade and Investment Commission, 2017). This has
driven a massive expansion in Polish earning and
spending capacity and an increasing number of
affluent consumers who are splashing their cash. KPMG
estimates that the number of affluent consumers in
Poland reached 1 million in 2016 and that their incomes
will increase by nearly 30% between 2016 and 2019
(KPMG, 2016).
The expansion is driving an even higher rate of
discretionary spending on luxury items. KPMG estimates
that the country’s luxury goods market increased by
15% from 2015 to 2016. It expects the market to grow
by a further 27% by 2020. Travel will be a key beneficiary
of this, with hotels and spas experiencing a CAGR of
5.3% in the country between 2016 and 2020 (KPMG,
2016).
Russia also saw strong growth in its luxury tourism
market and outbound travel generally up until a peak in
2013 with some 40 million outbound trips. The majority
of these trips were and continue to be to European
destinations with central and Eastern Europe being the
prime destinations (see Figure 6 and Table 2; ETC, 2017).
Following on from this Russian tourism at all levels has
been buffeted by political and economic disruption.
Manchester in 2017. Data provided to EyeforTravel
by 80 Days, which benchmarks luxury hotels, found
that London hotels have seen stable conversion rates
and transaction values, with the latter rising despite a
terrorist attack on Westminster Bridge in March 2017
(see Figure 5).
In the longer term, Amadeus expects Western Europe
to be one of the stronger performing regional markets,
even as wealth doesn’t grow to the same degree as
other regional markets. They expect the luxury travel
market to achieve a CAGR of 6.4% but both Knight Frank
and Credit Suisse expect the region to come bottom
for growth in the number of millionaires in percentage
terms (Amadeus, 2017). This expectation of growth in
luxury travel speaks to the strength of Europe’s brand,
attractions, luxury travel infrastructure and already
considerable wealth.
2.1.2 emerging europe and russiaCentral and Eastern Europe and Russia have grown
strongly as sources of outbound travel over the past
decade but have diverged in recent years, with several
Eastern European economies becoming star performers,
such as Poland, and Russia facing a turbulent few years.
EU enlargement has benefited Eastern European
economies, leading to increasing wealth and
consequently for Amadeus to predict that the ‘Emerging
Europe’ region to be the second-fastest growing luxury
market out to 2025 (Amadeus, 2016).
Growth in the luxury travel market will be broad-
based with numerous countries growing strongly
in the region over the previous decade and set
to continue to do so, particularly the Baltic States,
Hungary, Slovakia and Poland. The ECB notes that: “The
Baltic states are among the few euro-area countries,
along with Slovakia, in which real GDP per capita
Table 1: London Luxury Hotel Conversion Rates and Transaction Values
Jun-16 Jul-16 aug-16 sep-16 oct-16 nov-16 Dec-16 Jan-17 feb-17 mar-17 apr-17 may-17
Conversion Rate (%) 0.32% 0.35% 0.43% 0.41% 0.43% 0.33% 0.28% 0.41% 0.32% 0.34% 0.34% 0.37%
Average Transaction Value (£) £1,442 £1,447 £1,337 £1,246 £1,193 £1,200 £1,146 £1,130 £1,446 £1,389 £1,431 £1,541
Source: 80 Days, 2017
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signs of recovery in 2017 within the travel market as a
whole and in luxury travel. Consumer confidence has
moved off the floor it reached in 2015 and since has
increased every quarter since Q1 2016 to the time of
writing and national GDP finally stopped contracting
in the latter half of 2016 and is expected to tentatively
grow in 2017.
This has led luxury tourism sales growth to return. The
London Luxury Quarter reported that Russian spending
in Q1 2017 grew by 88%. A spokesperson noted that
“March recorded the highest growth in international tax
free spend by Russian visitors in London Luxury Quarter
in more than two years. The Russian economy, slowly
emerging out of a recession, is believed to have positively
influenced Russian consumers’ spending habits, historically
known for their keen investment in luxury goods (TR
Business, 2017b).” Worldpay note that Russian spending
in June 2017 in the UK increased by 25% (Retail Gazette,
2017). The ETC noted in its Q2 2017 report a broad-based
recovery across the destinations it measures, with Russian
arrivals to Turkey growing by 88% (ETC, 2017).
A report from Exane BNP Paribas Research and
Contactlab published at end-2016 noted that growth
International sanctions, terrorism, recession and a falling
currency have all played a part in diminishing Russian
spending on tourism, with some destinations suffering
particularly badly.
Major declines occurred in 2014 and 2015 following the
imposition of sanctions and the collapse in oil and gas
prices. This was combined with major declines in the
value of the rouble, worsening a recession that lasted
for seven quarters until late 2016. This has had a much
smaller effect on the country’s luxury consumer than
the average Russian as it is the site of the highest wealth
disparity of any major economic power according
to Credit Suisse, who estimate that the top decile of
wealth-holders owns 89% of all household wealth (Credit
Suisse, 2016). This has led to long-haul travel and journeys
to Western Europe, which are haunts of the Russian rich,
experiencing smaller declines than other destinations,
but declines nonetheless as even Russian oligarchs suffer
when the ruble more than halves in value against the
dollar and euro as it did between 2013 and early 2016
(Central Bank of the Russian Federation, 2017).
Conditions began to stabilize in terms of the tourism
market in late 2015 and into 2016, with some tentative
Figure 6: Russian Travel Destinations in Europe as of Q2 2017 (000’s)
Central/Eastern Europe
Southern Europe
Western Europe
Northern Europe
0 2,000 4,000 6,000 8,0001,000 3,000 5,000
7,124
1,314
4,362
1,084
7,000
Source: ETC, 2017
Table 2: Russian Travel Destinations in Europe as of Q2 2017
Outbound journeys Overall market share
Travel to Europe 13,885,000 73.5%
Northern Europe 1,084,000 5.7%
Western Europe 1,314,000 7.0%
Southern Europe 4,362,000 23.1%
Central/Eastern Europe 7,124,000 37.7%
Source: ETC, 2017
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in a number of destinations and also in the number
of domestic trips. Contactlab estimates that foreign
spending as a proportion of Russian luxury consumers
overall travel budgets was nearly 90% in 2014 but this
share fell precipitously in 2015 to around 65% (Exane BNP
Paribas Research & Contactlab, 2016). Aviasales recorded
an increase of 4% in their site’s bookings for Russian
destinations in the first half of 2017.
Elsewhere, they reported to EyeforTravel that the major
areas for Russian inbound growth were the Caucasus
(Armenia + 240%, Azerbaijan, +92%), China (161%),
Thailand (+91%) and Western Europe (Germany +122%,
in luxury spending had returned in 2016, with a strong
increase recorded in Q3 2016 and overall spending
growing by potentially by 5-10% for the entire year.
The report notes that Russian shopping in Italy (a key
Russian shopping destination) grew by 3% in 2016. They
expect the growth found in 2016 to continue into 2017
(Exane BNP Paribas Research and Contactlab, 2016).
According to Aviasales data, business class bookings as
a percentage of sales have remained stable throughout
the first half of 2017 compared to 2016, following a
fall from 2015 to 2016. The company, which is Russia’s
largest metasearch site by visits, also notes strong growth
Figure 7: High Growth Destinations for Russian Premium Travel in H1 2017 Through Aviasales Metasearch Engine
Source: Aviasales, 2017
300%
250%
200%
150%
100%
50%
0%
142%
121%
91%
161%
240%
49%
122%
173%
92%
4%
Russia ItalyChina USArmenia SpainGermany UzbekistanAzerbaijan Thailand
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Table 3: High Growth Destinations for Russian Premium Travel in H1 2017 Through Aviasales Metasearch Engine
yoy percentage change in aviasales bookings average booking value
Russia 4% $713
Armenia 240% $649
Azerbaijan 92% $786
China 161% $2,080
Germany 122% $1,471
Italy 121% $1,546
Spain 173% $1,679
Thailand 91% $2,940
US 49% $4,302
Uzbekistan 142% $954
Source: Aviasales, 2017
www.eyefortravel.com The Global luxury Travel Consumer | 26
a vital region to draw consumers from, especially given
their interest in travelling for shopping across the region.
2.2.1 ChinaChina is the number one source of tourists worldwide,
with projections estimating that more than 140 million
outbound journeys are to be made in 2017 (COTRI, 2017).
A very large proportion of these international travellers
would count as luxury travellers, as the country is still at
an early stage in its development as a travel market. As
yet, only a small proportion of the Chinese population
hold passports and have the means to travel. This has led
the country’s consumers to be highly coveted as they,
on average, spend far more when abroad than any other
nation. EyeforTravel 2017 consumer survey data found that
the median reported spending category for outbound
trips is between RMB20,000 to RMB39,999 per household,
equivalent to approximately USD2,900 to USD5,000 at
the time of the survey (EyeforTravel’s Chinese Consumer
Survey, 2017). A 2017 Oliver Wyman survey from early
2017 found that spending per trip was of a similar level
at RMB20,317 (Oliver Wyman, 2017). By comparison,
UK consumers spent around GBP620 (USD790) per trip
outside of the UK according to the ONS (ONS, 2017).
Median domestic spending is much lower at between
RMB5,000 to RMB9,999 per trip, with domestic tourism
more mass market and less of a priority for luxury travellers.
Italy +121%, Spain +173%). This largely reflects the
long-standing Russian interest in chasing sunnier climes,
security concerns in previously popular destinations, and
a growing tourism relationship in the case of China, with
Russia also seeing an increase in inbound traffic from
China. Interestingly, the US also performed well, and the
vast majority of Russian visitors are likely to fit into the
luxury category, as the average booking value is by far
the highest of all the high growth destinations provided
to EyeforTravel at USD4,302 (Aviasales, 2017). This jump
may be partially down to a more favourable view among
Russians of the US in the Trump era. Only Russia and Israel
now have more confidence in the presidency than under
Obama according to a Pew study (Pew, 2017).
2.2 asia-PacificAsia-Pacific is home to both a series of a developed luxury
travel markets, such as Australia, Hong Kong, Singapore,
South Korea, and Taiwan, alongside a host of developing
economies that should eclipse these by far for spending
levels and journeys as they mature. China, India, Indonesia
and South East Asia will be engines for growth, adding
huge numbers of luxury travel consumers. Amadeus
expects South Asia to be the fastest growing of all the
regions it forecasts and South East Asia the third fastest.
This will push the Asia-Pacific region out to become the
dominant force in world luxury travel in the long term and
Figure 8: Spending Per Trip in China – Domestic Versus International Trips
40%
35%
30%
25%
20%
15%
10%
5%
0%Less than
¥1,000¥20,000 - ¥39,999
¥5,000 - ¥9,999
¥40,000 - ¥99,999
¥10,000 - ¥19,000
More than ¥200,000
¥1,000 - ¥4,999
¥100,000 - ¥199,999
Source: EyeforTravel’s Chinese Consumer Survey, 2017
n Domestic spending n International spending
5.6%
14.2%
23.6%
36.2%
5.8%
28.8%
22.5%
17.5%
0.5%
10.0% 9.3%
0.3%
4.1%
17.5%
2.4%
0.5%
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Spain experiencing very strong growth in 2017. Hurun
reports that Europe is the top region that its wealthy
respondents expect to travel to in the next three years
at 49% of the sample. The region also came top for
travel in 2016, followed by South East Asia (particularly
Thailand and Vietnam; Hurun Research Institute, 2017).
Other key destinations are the US and South Korea,
which have not performed well for Chinese tourists in
2017 and Australia and Japan, which are seeing a strong
continuation of positive recent trends.
A recent trend that demonstrates the increasing
interest of the Chinese consumers in more adventurous
vacations is the growth in travel to the polar regions,
with Chinese luxury travellers now the second biggest
market in Antarctica and the largest to Russia’s Arctic
(Financial Times, 2017b). Internally, Yunnan, Sanya,
Macau, Tibet and Hong Kong are popular destinations.
In terms of recent market developments, the
government crackdown and austerity saw
underperformance in the Chinese luxury market
post-2011 even as wealth exploded, which was not
helped by a long-term decline in the value of the yuan
from 2014 to 2016. This latter factor was noted by Credit
Suisse, alongside a decline equity values, as making
2016 a poor year for wealth growth in China, with a
small decline in the number in the number of adults
with wealth above USD1 million compared to 2015
(Credit Suisse, 2016).
However, spending and wealth growth have turned
around in the second half of 2016 and continued into
2017. The yuan has consistently increased in value since
the start of the year against the dollar, rising by more
than 5% at the time of writing and Chinese consumers
look to be back on the spending spree.
The ETC noted double-digit growth in arrivals or
overnight stays across all bar five out of the 29 European
countries that reported data for Chinese consumers, with
Montenegro increasing overnight stays by 141% (ETC,
2017). This marks a change from subdued growth in 2016.
VisitBritain reported that Q1 2017 arrivals from China
were up 15.6% and bookings up 20% to the middle of
The rate for Chinese spending at the very top end of
the wealth scale is naturally far higher than even the
elevated averages mentioned earlier. Hurun’s 2016
survey of 525 young luxury Chinese travellers born after
1980, who had an average age of 28 and an average
wealth of nearly RMB 39 million, found that they spend
on average RMB420,000 (approximately USD63,000) on
tourism per household and RMB220,000 (approximately
USD33,000) on shopping abroad. In its 2017 survey,
which had an average age of 42 and average wealth of
RMB22 million, the average budget was RMB380,000.
The average spend per night on a hotel is RMB3,800
(USD570) (Hurun Research Institute, 2016; Hurun
Research Institute, 2017).
Chinese HNWIs in Hurun’s 2017 survey went abroad
3.3 times in the previous year for an average of 27
days, 69% of which was for leisure travel. For those
consumers born post-1980, they had visited on average
13 countries (Hurun Research Institute, 2017).
Although shopping spend among Chinese travellers
is still very high, shopping spending is in decline as a
proportion of overall trip budgets and as a motivator
to travel. Whilst total spending per trip rose 3.5% YoY,
the amount of budget allocated to shopping fell from
41% to 33% according to Oliver Wyman (Oliver Wyman,
2017). Hotels.com recorded the proportion of Chinese
tourists noting shopping as the reason for their trip
decline to one-third of the sample in 2017 from more
than two-thirds in 2016. A Survey by the Financial Times
also found a trend of general decline as 37% of trip
spending went to shopping in 2017, down from 47%
in 2013, with the amount spent on accommodation,
food and entertainment up to 31% from 44% (Financial
Times, 2017a). The top category for Chinese spending
whilst travelling is cosmetics.
Chinese travellers generally travel within Asia, with
more than four out of five journeys made in the region
but as wealth rises, then so does travel to further afield
and more adventurous destinations. Europe is the
top destination for luxury travellers currently and is
expected to continue to be so in the near future, with
France, Italy and the UK the leading destinations, and
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comparison post 80s and 90s travellers spend 27% (CITM,
2017). EyeforTravel research found that ages 36-55 spent
the most but 18 to 35 year olds were only just behind
despite lower incomes (EyeforTravel’s Chinese Consumer
Survey, 2017). This bodes well for continuing growth in the
Chinese luxury travel market as younger consumers reach
their peak earning and spending potential.
EyeforTravel research has found that the highest
spending region in China is Beijing, followed by
Shanghai, with Tier 1 cities currently the key outbound
markets (EyeforTravel’s Chinese Consumer Survey, 2017).
2.2.2 JapanJapan is a complex luxury travel market but one that
holds huge promise. On the face of it Japan, should be
a market whose time has come and gone, facing lost
decades of low and inconsistent growth, alongside
a demographic crisis as the country ages. In reality,
it is a massive and thriving luxury travel market that
will actually grow in the coming years, presenting
opportunities for travel brands.
Japan remains an extremely affluent society and this
wealth is more evenly distributed than in comparable
Western economies, with the top 1% earning salaries
of USD240,000 compared to USD1.2m in the US
the year. Chinese arrivals to Spain increased 28.4% from
January through to April (VisitBritain, 2017; BBC, 2017;
TourMIS, 2017). Macau, long a haunt of wealthy Chinese
as its casinos have until recently largely catered for upper
tier gamblers, reported a return to increased gaming
revenues across 2016 and into 2017 and a 5% increase in
visitors in Q1 2017 (Financial Times, 2017c).
In the longer term, the demographic and wealth trends
strongly support growth in the Chinese luxury travel
market. The number of dollar millionaires is expected to
multiply ten times between 2006 and 2026 to 1.8 million,
according to the Knight Frank Wealth Report 2017.
Credit Suisse predicts that the number of millionaires will
increase by 73% between 2016 and 2021, the highest
out of all the countries it forecasts (Credit Suisse, 2016).
McKinsey believes that by 2025 Chinese consumers will
account for 44% of the personal luxury goods market, up
from 12% in 2008 (McKinsey, 2017).
Furthermore, younger Chinese consumer value and
spend more on travel. Hurun’s research suggests that
the post-1980s generation of HNWIs have higher wealth
and spend more on international travel than older
counterparts. The 2017 CITM report notes that the post
90s generation spend more on international travel than
any other generation as a proportion of income at 35%. By
Figure 9: Chinese HNWI Visits Abroad 2016
70%
60%
50%
40%
30%
20%
10%
0%
8%
27%
8%
34%
58%
32%
10%
39%
61%
Europe Pacific Islands
South & Southeast
Asia
Japan & Korea
North & South Pole
Hong Kong, Macau & Taiwan
Middle East
America Africa
Source: Hurun Research Institute, 2017
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million and this will further rise to 1.516 million by 2026,
an increase of 30% (KnightFrank, 2017).
Critically travel brands should note that a large part of
this is being driven by demographics. Older Japanese
consumers have benefited from years of company
employment, higher rates of home ownership, generous
pensions and if they have worked for the same company
throughout, an average final bonus of more than
USD200,000 (Bloomberg, 2017d). Not only this but high
inheritance tax rates incentivize ageing Japanese to
divest assets and encourages spending in later years.
Japan is also in its best period of expansion for more
than a decade, with more than six consecutive
quarters of growth. The most recently available data
(Huffington Post, 2015). Whilst this means less ultra-rich
consumers, it has created a broad base of still highly
affluent consumers. So much so that the country has
the second highest number of dollar millionaires in
liquid assets after the US according to both Knight
Frank and CapGemini, with the latter reckoning that the
nation has more millionaires than Germany and China
combined (CapGemini, 2017).
Not only this but the number of Japanese millionaires
is still on the rise. CapGemini estimates that the wealth
of Japanese HNWIs has been rising since 2011. In the
last available year for data – 2015 – their US dollar
wealth jumped by 11.4% (CapGemini, 2017). Knight
Frank estimates that in the decade preceding 2016
the number of dollar millionaires rose by 35% to 1.166
Figure 10: Japan HNWI wealth change 2012-2015
Source: CapGemini, 2017
7000
6000
5000
4000
3000
2000
1000
02013 20152012 2014
30%
25%
20%
15%
10%
5%
0%
n HNWI wealth (USD billions) n Year-on-year percentage change
Table 4: Japan HNWI wealth change 2012-2015
hnwi wealth (usD billions) yoy Percentage change
2011 4230.9
2012 4452 5.2%
2013 5532.8 24.3%
2014 5899.3 6.6%
2015 6571.4 11.4%
Source: CapGemini, 2017
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This presents an excellent growth opportunity for
travel brands and makes older luxury consumers in the
Japanese market the key demographic to target given
their high wealth and greater leisure time to vacation. In
terms of targeting these consumers, domestic vacations
are particularly popular. Expedia research of eight major
tourism markets notes that Japan had the highest rate
of respondents reporting that their trip was within their
own country, beyond even the US. Just 14% of Japanese
respondents reported that their journey was outside the
country, compared to 18% of US travellers, and 73% of
Germans, the latter of which is the highest in the survey
(Expedia, 2017a).
Internationally, Japanese luxury consumers principally
travel to the US, Western European (particularly France,
Germany, Italy, and Spain), and developed countries
in Asia. According to Affluential Hawaii topped the list
of destinations that high-end Japanese travellers have
visited in the past 12 months up to May 2016 and was
also the top destination they were planning to visit in
the following 12 months. New York was the second
most desired destination, reinforcing the attraction
of the US. The cruise industry is also experiencing
extremely high growth in passenger numbers from
the country as Japanese passengers rose 12% in 2016,
creating a scramble to expand operations, with Princess
Cruises, Genting Hong Kong, and MSC Cruises all
announcing more cruises.
2.2.3 australiaAustralia and New Zealand already have a very mature
luxury travel market, with nearly one third of outbound
trips falling into this category in 2015, according to
Amadeus. Consequently, between 2015 and 2025,
luxury travel from the area will grow with a CAGR of
4.1% compared to 3.8% for the overall travel market
and the Oceania region is one of the slower growing
markets expected by Amadeus. The upside is that
Australian consumers are already very high spenders
on travel, with many destinations noting them as
among the top sending per capita countries, such as
Singapore, Thailand and the US (Marketing Interactive,
2017; Bloomberg, 2017f; Fox News, 2017). Australia as
an inbound market will also benefit from the growing
surprised analysts, significantly beating expectations
and seeing the economy surge 4% in Q2 2017 making
it the top G7 economy. There was much cheer from
the increases in private consumption and domestic
demand, which grew by 0.9% and 1.3%, respectively.
At the time of writing Q3 estimates were not available
but growth is expected again, which would make
the period the longest period of sustained growth
since the turn of the Millennium. The expansion has
pushed Japanese unemployment to a 23 year low and
the ratio of open jobs to applicants to a 43 year high
(Financial Times, 2017d).
This positivity has fed through to the travel market,
with travel brands reporting growth throughout and
especially at the top end of the Japanese leisure travel
market. In 2016 Japanese outbound travel shook off
years in the doldrums for outbound travel and grew by
5.6% and followed this into 2017, with outbound travel
growing by an estimated 6.3% across H1 2017 (Japan
National Tourism Organization, 2017). Affluential’s
research noted that from 2015 to 2016 the percentage
of Japanese luxury consumers agreeing with the
statement “I am more likely to travel abroad for vacation”
increased from 49% to 60% (Affluential, 2016).
Figure 11: Japan dollar millionaires from 2006 to 2026
Source: Knight Frank, 2017
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
020162006 2026
863,700
1,166,000
1,515,800
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of South Korean outbound travellers and, within that,
luxury travellers. From 2010 to 2016 the number of
outbound journeys undertaken by South Koreans has
leapt every year to the point where there are now
more than 22 million outbound journeys undertaken
each year and the total grew by 79% over the period
(Korea Tourism Organization, 2017). For luxury travellers,
Affluential found that the percentage of South Korean
consumers in this category agreeing that they would
travel more rose from 71% in 2015 to 79% in 2016
(Affluential, 2016). The growth trend continued into
2017 with H1 2017 seeing the number of outbound
journeys growing by nearly 19% year-on-year.
In terms of trends and reaching the South Korean
luxury consumer, recent years have been marked by
the rise of the independent South Korean traveller
and the fall in group travel. This is particularly so in
younger generations, who will also drive an already
dominant role of digital research and purchase routes.
South Korea is one of the most connected and digitally
focused societies on earth, particularly with regard
to smartphones. Pew estimates that the country has
the highest rate of smartphone penetration of any
country in the world, at 88% of adults in 2015 (Pew,
Asia-Pacific market, with EyeforTravel noting that
Chinese consumers put Australia as the destination they
would most like to visit in 2017 (EyeforTravel’s Chinese
Travel Consumer Survey, 2017). The country is also
seeing an influx of wealthy individuals, with Australia
is the top country worldwide for millionaire inflows in
2016 (Research and Markets 2017).
2.2.4 south koreaBoth wealth and outbound travel have expanded
massively in South Korea over the last decade.
CapGemini finds that from 2011 to 2015 the wealth
held by HNWIs increased by 39% (CapGemini,
2017). Knight Frank notes that the number of dollar
millionaires doubled between 2006 and 2016 and grew
by 6% from 2015 to 2016 (Knight Frank, 2017). Credit
Suisse notes that the growth has pushed the country
into the top 20 for the number of millionaires and also
UHNW individuals, with the country containing around
2% of the global total of millionaires. They expect the
overall number of dollar millionaires to grow by 41% by
2021 (Credit Suisse, 2016).
The country’s economic success and increasing wealth
has driven a massive expansion in the overall number
Figure 12: South Korea HNWI wealth change 2011-2015
6000
5000
4000
3000
2000
1000
02013 20152012 2014
14%
12%
10%
8%
6%
4%
2%
0%
n HNWI wealth (USD billions) n Year-on-year percentage change
2011
Source: CapGemini, 2017
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planned to visit in 2016 were Hong Kong, Singapore
and Tokyo, according to Affluential (Affluential, 2016).
The country is also a strong destination for inbound
luxury travel from Asian destinations, with China by far
and away the greatest source. A huge part of this is the
country’s developed luxury retail markets and cheaper
costs, with high taxation rates in China creating a
roughly 30% to 40% price differential between the two
and leading to very high spending rates and growth
in 2016. A South Korean official noted that duty free
“sales to foreign tourists increased about 40% last year
in value, about 80% of them are Chinese; but sales to
South Korean travellers saw only a 9.7% increase.” (TR
Business, 2017c). Euromonitor found that the South
Korean tourism industry was one of the world’s best
performing when it came to spending by international
tourists in 2016, with 11% growth (Skift, 2017).
However, in late 2016 and into 2017, there is a growing
body of evidence suggesting that diplomatic tensions
have taken their toll on inbound luxury travel to
South Korea. ForwardKeys data shows a decrease in
international passengers staying four to eight nights of
-24% in the first half of 2017 and a projected -26% in
2016). Affluential notes that South Korea was behind
only China and India when it came to luxury consumers
who purchase luxury good online and purchase travel
through mobile (Affluential, 2016).
The organization export.gov, which promotes US
business, notes that there are opportunities in creating
luxury packages to cater for the high number of single
professional Korean women who travel for leisure and
Korea tourism statistics note that marginally more
women travel internationally than men.
Generally, the South Korean traveller generally and also
luxury traveller tends to favour regional destinations. A
major expansion in air routes has created strong growth
in short breaks to a variety of regional destinations.
Japan is the major destination for South Koreans, with
an increasing number of luxury consumers enjoying
short breaks in the country to enjoy the fine dining
and shopping, which are major priorities for the group.
South Koreans account for more than a fifth of arrivals
to the Japan, and South Koreans generally tend to head
to the Kansai region (Bangkok Post, 2017). The top three
destinations luxury travellers have visited in 2015 were
Tokyo, Hong Kong and Osaka and the top three they
Figure 13: Growth in Outbound Journeys from South Korea, 2010-2016
Source: KTO, 2017
25m
20m
15m
10m
5m
02013 201620152012 2014
25%
20%
15%
10%
5%
0%
n Number of outbound journeys from South Korea, 2010-2016 n Year-on-year percentage change
2010 2011
1.6%
8.2%
12,488,364 12,693,733
13,736,97614,846,485
16,080,684
19,310,430
22,383,190
8.1%
8.3%
20.1%
15.9%
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where I can buy luxury products”, 74% and 79% agreed
growing from 61% and 62%, respectively. This was the
highest rate of agreement out of all of the eight Asian
economies studied. Indian luxury travellers also came
out ahead of the other economies when it came to
digital bookings, with 92% reporting that they booked
online, with the vast majority occurring on mobile at
76% of the respondents (Affluential, 2016).
2.3 americas2.3.1 usThe US remains the unchallenged rival of HNWIs and
wealth held by these individuals, making it the most
important luxury travel market in the world. Knight
Frank estimates that the US had nearly 4.4 million
individuals with more than USD1 million in liquid assets
in 2016, which is more than the next six countries
combined on their list. Credit Suisse estimates that the
US has 41% of the world’s dollar millionaires and this
increases for Ultra-High Net Worth (UNHW) individuals,
where the US is home to 52% of the global total (Credit
Suisse, 2016). Not only this but they analysts do not
expect the rate of growth to slow down, with Knight
Frank estimating a growth rate of 30% from 2006
to 2016 in the number of millionaires and a further
the second. They also note that airline flight capacity
between China and South Korea fell by -17% in H1
2017 ForwardKeys, 2017). The Korean National Tourism
Agency figures for the first seven months of the year
record that arrivals from China were down by 46.5%
compared to the same period in 2016 (KTO, 2017).
2.2.5 indiaIndia is expected to be the fastest growing luxury
market between 2015 and 2025 in Amadeus’ study,
with a CAGR of 12.8% across the period. This will also
push the South-Asian market to become the top
region for growth, driven by the growing middle-class
(Amadeus, 2016).
Part of this growth is the fact that India was coming
from a low base, with an estimated 67,800 dollar
millionaires in 2006 according to Knight Frank. However,
this growth will take it out to 660,800 millionaires by
2026, which is an increase of 875% over the period
and will make the country the sixth biggest home of
millionaires in the world by 2026 (Knight Frank, 2017).
India is a market with huge potential over the next ten
years. There is little regional travel among Indian luxury
travellers, but a high level of medium and long-haul
travel. This is partly down to the lack of suitable
destinations for luxury travel nearby. It is also fuelled
by the diaspora of Indian inhabitants in Europe, the
Americas and the Middle East, making destinations in
Western Europe, the United Arab Emirates, the Maldives
and the Seychelles popular among luxury Indian
travellers. The US is also on the rise, with Affluential
finding that Los Angeles was the top destination noted
by their respondents in the coming 12 months. The
domestic market is also expanding rapidly, with IATA
noting that domestic Revenue Passenger Kilometers
(RPKs) grew by 14.6% in 12 months up to March 2017
(IATA,2017).
In terms of behaviors Indian luxury travellers are
very keen shoppers according to Affluential and this
shows no sign of diminishing. When asked whether
the agree with the statements “I mainly buy luxury
brands when travelling” and “I prefer travel destinations
Figure 14: India Dollar Millionaires from 2006 to 2026
Source: Knight Frank, 2017
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
020162006 2026
67,800
264,300
660,800
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and Western Europe are important destinations. In
particular as disposable income rises, then Western
European destinations become more popular, with
Italy, France, the UK and Germany the main points of
travel. They also over-indexed for spending on dining,
cultural experiences, and outdoor activities and also
for membership for hotel and airline loyalty programs
(EyeforTravel, 2016b).
In terms of where these consumers are located in the
US, they are largely focused on either coast, with the
US North East seeing the greatest concentration of
wealth in the country. According to Equifax, the states
with the highest total income per household are, in
order, Connecticut, Delaware, Virginia, New Jersey, and
Maryland, and the states with highest total assets per
household are Connecticut, New Jersey, Massachusetts,
Washington D.C., and California. (Equifax, 2017a; Equifax,
2017b). There are further pockets of concentrated wealth
around urban areas in Arizona, Colorado, and Texas.
The outlook also appears reasonably solid in the
short-term, particularly for the domestic market, with
good prospects across the medium-, and long-term
for the US luxury travel market. This is in contrast to the
US personal goods luxury market which Bain predicts
will have a rough 2017 and despite a relatively poor
performance from the dollar across the first half of 2017.
Two surveys point to optimism in the short-term. The
first, a survey of luxury travel management firms by
Strategic Vision in February 2017, reported that 58%
of firms’ clients are optimistic about domestic travel,
44% saw no change and just 2% were “cautious”.
International travel sentiment was much weaker, with
half of the firms characterize reporting a “cautious”
outlook, 31% optimism, and 31% expecting the status
quo (Strategic Vision, 2017).
The second survey, released in May 2017, of more than
650 U.S. and Canadian travel agents specializing in
luxury travel found that 44% had seen double-digit sales
increases in sales, 25% experienced 25% increases, and
12% by more than 50%. Furthermore, in the 12 months
following the survey 45% expected double-digit growth.
30% growth from 2016 to 2026 (Knight Frank, 2017).
Credit Suisse estimates that the number of asset dollar
millionaires will grow by 33% from 2016 to 2021.
This makes US travellers: “One of the most lucrative
travel market segments in the world and an important
driver of luxury travel demand and trends across
the globe,” according to the survey by luxury travel
analysts Resonance. The wealthiest five per cent of US
households take an average of 14.3 trips per year, about
half for business and half for leisure. This compares
to some 4.8 trips a year on average taken by all US
travellers. The online survey quizzed 1,667 US travellers
in the top 5% of earners and 742 in the top 1%. It found
that each luxury household was made up of on average
2.9 people, with an average spend of USD3,115 per
person per vacation. This adds up to about USD390
billion total travel expenditure (Resonance, 2016).
EyeforTravel and Equifax’s research into key US
outbound travel segments found that for the higher
tier segments of luxury consumers the key destinations
are Mexico and Canada, as is the case with most US
international tourists, but beyond this the Caribbean,
Figure 15: US dollar millionaires from 2006 to 2026
Source: Knight Frank, 2017
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
020162006 2026
3,376,200
4,389,000
5,705,700
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2.3.2 brazilBrazil emerged as one of the biggest outbound tourism
markets in the early years of the millennium, making
a strong contribution to luxury and business travel.
As one of the BRICS, Brazil was earmarked as one of
the world’s top emerging economies. Powered by a
commodities boom, the number of wealthy consumers
expanded significantly. However, this has given way to
a major recession as a political scandal has engulfed the
country and demand growth for key exports has faltered,
exposing underlying weaknesses across the Brazilian
economy, such as a poor regulatory environment, high
taxation and uncompetitive practices.
The depth of this recession, the longest in the country’s
history, has hit even at the top end of the market, with
CapGemini noting that in every year between 2012
and 2015 the wealth held by HNWIs has fallen (see
Figure 16). Although tentative growth has returned to
the Brazilian economy, with 1% growth in Q1 2017, it
will take some time for the damage to be undone to
Brazilian international tourism and the continuation of
political scandals threatens the fragile economic growth
(BBC, 2017b).
However, the highest growth was skewed toward those
that catered to the very highest spender, fitting in with
wider patterns (Travel Market Report, 2017).
Although Strategic Vision’s survey believed there was
reason for caution regarding the outbound market,
there appears to be little reason for concern from
the numbers so far. The Bureau of Economic Analysis
and the National Travel and Tourism Office (NTTO)
reports that spending by US travellers rose 6.3% in H1
2017 (Bureau of Economic Analysis and NTTO, 2017).
Air departures from the US were up 8% in H1 2017
according to ForwardKeys (ForwardKeys, 2017). The
UK in particular has seen excellent performance across
2017 from US tourists, with H1 2017 seeing a 25%
growth in arrivals from North America, according to
VisitBritain (VisitBritain, 2017).
Over the long term, Amadeus expects this already
enormous luxury market to continue growing and
growing ahead of the overall travel market at more
than 6% per year (Amadeus, 2016). The strength of this
projection are supported by the growing wealth of the
very wealthiest consumers as we saw at the start of
the section.
Figure 16: Brazilian HNWI wealth change 2012-2015
4100
4050
4000
3950
3900
3850
3800
3750
3700
3650
3600
35502013 201520122011 2014
5.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
n HNWI wealth (USD billions)
n Year-on-year percentage change
3892
4037
3.7%
-0.3% -1.4%
-6.2%
4026
3968
3723
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Figures from Florida show a continued decline between
2014 and 2016 following on from years of extremely
strong growth. From 2013 to 2014 arrivals increased by
nearly 37% but then fell -10.1% YoY in 2015 and then
even further by -28.7% in 2016, demonstrating the huge
effect of the economic crisis (Reuters, 2014; Orlando
Sentinel, 2015; Visit Florida, 2017).
One result of this economic crisis and the precipitous
decline in the value of the real in 2014 and 2015
is that the domestic market is showing signs of
recovery before the international market. Brazil has
strong domestic luxury travel facilities that have seen
investment as the country geared up to host the 2014
FIFA World Cup and then 2016 Olympics. As such,
Outbound travel from Brazil collapsed in 2016, falling
15% in the first eight months of 2016 according to the
World Travel Monitor. WTM also showed that Brazilians
took shorter international trips and switched from air
travel to car travel (ITB, 2017).
This has hit key inbound destinations, with the
America’s hit particularly badly as it account for the
majority of Brazilian outbound travel. WTM notes that
across the first eight months of 2016 Brazilian travel to
the Americas declined 16%. Within the Americas, luxury
Brazilian travellers tend to visit a few key destinations,
with New York and Florida out on top for both arrivals
and spending. Consequently, both have been hit by
Brazilian withdrawals in international luxury travel.
Figure 17: Change in 2016 Outbound Travel to World Regions from Brazil Across First Eight Months of 2016
-18% -16% -14% -12% -10% -4%-8% -2%-6% 0%
Americas
Europe
Asia
-16%
-10%
-5%
Source: ITB, 2017
Figure 18: Brazilian Arrivals to Florida 2012-2016 (000’s)
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%2013
1,200,000
23.7%
36.7%
2015
1,475,000
2016
1,051,000
2012
970,000
2014
1,640,000
n Brazilian arrivals to Florida (millions)
n Year-on-year percentage change
-10.1%
-28.7%
Source: Reuters, 2014; Orlando Sentinel, 2015; Visit Florida, 2017
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2017). This coincided with the low point of a lengthy
decline in the Canadian dollar against international
currencies and the dollar in particular from 2013 to Q1
2016. From early January 2013 to early January 2016 the
Canadian dollar lost 28% of its value against the dollar.
The net effect of this was a retrenchment in Canadian
spending on leisure vacation and the number of trips
taken in 2016 overall but with the US suffering the
most. According to Canadian government data the
number of Canadians returning after one or more
nights outside the country decreased 2.7% from 2015 to
2016, although it appears that the travel to the US and
the bottom of the market saw the brunt of this as the
number returning from journeys outside the US grew
by 3.7% (Statistics Canada, 2017).
This downbeat view has been reversed in 2017, with
the economy now booming and the Canadian dollar
regaining some of its losses. The Canadian economy is
expected to grow at it fastest rate since 2011 and be one
of the leading G20 nations, with growth across the year
expected to be 2.7%, following on from a barnstorming
first quarter of 3.7% growth quarter-on-quarter (Business
Vancouver, 2017). This has led to a return to strong
growth in overall Canadian travel and luxury travel.
Canadian international journeys increased by 4.9% overall
and, excluding the US, 4.7% in the first five months
of 2017 (Statistics Canada, 2017). Destination Canada
reported that domestic expenditures rose by 6.6% in Q1
2017 (Destination Canada, 2017). North American luxury
travel agents were also reporting high growth rates and
strong optimism (see Section 2.3.1, the US for more).
Overall, this indicates a robust 2017 for Canadian luxury
spending.
Canada’s International Travel Survey showed that
in 2015, the most visited countries were first the
US, followed by Mexico, then the UK, France, Cuba,
Germany, the Dominican Republic and China (Statistics
Canada, 2015).
2.4 middle eastOil rich Gulf Cooperation Council states such as Saudi
Arabia, Kuwait, Qatar and the UAE have contributed
the overall pattern of data and reports suggests that
Brazilians, including luxury consumers have switched to
travelling more at home. A consumer survey conducted
by the Ministry of tourism found that 86% planned to
travel domestically in 2016 (Ritz G-5, 2016). Brazilian
government statistics also showed that domestic flights
returned to growth in early 2017 with RPKs increasing
in March 2017 breaking a run of 19 consecutive months
of falling demand and continuing to grow throughout
the remainder of H1 2017 (anna aero, 2017). Expedia
Group reported that “domestic travelers in Brazil are also
driving demand for the destination’s luxury segment
with a reported increase of more than 55% in 2016
when compared to the previous year,” (Expedia, 2017b)
Following on from the signs of domestic recovery
in 2016 and heading into 2017, it appears that the
international market for Brazilian travel is now back on
a growth path. ForwardKeys data shows an increase
in international flight booking of 18.8% in H1 2017
compared to the same period last year and 27.6%
growth in bookings made for H2 2017 up until 1st July
2017 (ForwardKeys, 2017). The Brazilian Central Bank
also noted that expenditure on international travel grew
by 10.1% in June 2017 compared to the same month in
2016 (Banco Central do Brasil, 2017).
In the long term, Brazil’s luxury travel market is set to
grow at a relatively modest 4.2% between 2015 and
2025, according to Tourism Economics figures quoted
by Amadeus (Amadeus, 2016).
2.3.3 CanadaCanadians are some of the highest per capita spenders
on travel in the world. However, a recession in 2015 and
intermittent growth in 2016 hit Canadians spending power
and consumer confidence, including at the top, and the
luxury travel market has only recently begun to recover.
Following strong gains in the half decade leading up
to 2014, the wealth held by Canadian HNWIs fell in
2015 as the country was hit by recession according to
CapGemini. They found that the number of HNWIs in
Canada decreased by 3.2% in 2015 and their wealth
decreased by 2.8% to about USD1.0 trillion (CapGemini,
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Instead greater growth in the luxury travel market will
be found in other Middle Eastern countries, though
from a lower base. The CAGR for emerging nations
Lebanon, Iran, Jordan and Egypt is 7.5% for the general
travel market and 8.9% for luxury travel (Amadeus,
2016). Iran has been helped by the lifting of sanctions
while other markets are bouncing back following the
disturbances of the Arab Spring.
Airlines from these states, such as Qatar Airways and
Emirates have set high standards of luxury. Qatar
Airways has created a new “QSuite” business class
product offering what is believed to be the first ever
double bed in business class along with privacy panels.
Emirates Airlines, based in Dubai, is another highly-
regarded luxury service. Etihad, based in Abu Dhabi,
offers what it calls Residence by Etihad, a high-end first
class offer in its Airbus planes featuring separate rooms
for travellers.
strongly to global luxury travel in recent years. However,
recent turmoil and changing economic conditions have
dampened the market somewhat and performance in
the coming years is not expected to be a strong as in
the recent past.
Amadeus estimates the general travel market for
Kuwait, Qatar and UAE will grow by 4.4% while luxury
travel overall across the Middle East region will grow by
4.5%. The report also estimates that the overall travel
market will grow faster than the luxury travel market
and the region will be one of the slower growing
regions. This is reflective of the fact that any of these
countries already have extremely high wealth levels
and living standard, such as Qatar, and the transition
the world is making away from fossil fuels. Knight Frank
notes that from 2015 to 2016 the number of millionaires
failed to grow, reflecting these already emerging
dynamics (Knight Frank, 2017).
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3.1 lead TimesLuxury travellers have a smaller dispersion in the
timeframes they choose to book their accommodation
and transportation. For luxury travellers, it is a bell curve
for both, peaking at between one and four weeks
before travel, whereas the average consumer follows
a flatter curve, with a greater proportion booking at
very short notice or planning their vacations further
in advance than luxury travellers. Tours and activities
on the other hand have noticeably longer lead times
for luxury consumers than the average. This is likely
reflective of the differences in lifestyles, types of trips
taken, spending per trip and price sensitivity.
In the case of transport and accommodation, luxury
consumers can afford to book within the peak pricing
periods and are less likely to be hanging on for last
minute deals. They also engage in far more travel per
year, averaging twice the journeys of the remainder
of the population and consequently will put less time
and emphasis on each individual vacation. However,
they do still require quality of service and comfort, so
they are less likely to search at the very last minute and
gamble with the possibility of dealing with diminished
or a total lack of inventory. In the case of tours and
activities, the experiential economy is pushing luxury
consumers to more and more unique and extravagant
3.
Luxury Consumer Booking Patterns
Figure 19: Lead Times for Accommodation Booking
30%
25%
20%
15%
10%
5%
0%Booked on
vacation2-3 months1-2 weeks 5-6 months More than
one yearLess than one week
3-4 months3-4 weeks 6 months to 1 year
Stayed with friends/family
n Luxury consumers n Rest of sample
Source: EyeforTravel Luxury Travel Analysis, 2017Note: For see methodology for the sources of data for EyeforTravel’s Luxury Travel Analysis
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There is a counter-trend to the tendency for luxury
consumers to book accommodation and transport
later than standard tourists in that non-luxury travellers
are more likely to book these in the final week before
their holiday or in the case of accommodation whilst
they are on holiday. This may be down to budget
travellers hanging on for last minute deals and a lower
complexity in the planning process for non-luxury
travel. We can also see budgetary considerations in
that non-luxury travellers are more likely to use their
own vehicle and stay with friends or family, which is
also indicative of their lower propensity to engage in
expensive long-haul travel.
However, when it comes to tours and activities,
interestingly the trend is reversed. More than double
the percentage of non-luxury travellers report that they
book their vacation activities whilst they are on holiday
at 35.8%, compared to just 14% of luxury travellers.
Similarly, non-luxury travellers saw short lead times, with
more booking in the week before travelling than their
high-spending counterparts, at 17.3% against 11.5%.
Instead, high-end consumers prefer to make bookings
between one and four weeks before they depart, with
experiences, which need to be booked further in
advance than before.
In the case of accommodation 54% of luxury consumers
book between one week and four weeks from their
date of travel, as opposed to 33.5% for normal travellers.
The latter instead have a much higher tendency to
make their accommodation arrangements further in
advance, with 21.4% preferring to book between two
and four months from departure, as opposed to 15.3%
of luxury travellers. Even further out, 12% chose to book
six months or more compared to 6% of luxury travellers.
More than double the percentage of non-luxury travel
consumers also chose to stay with friends and family on
their trip (EyeforTravel Luxury Travel Analysis, 2017).
This trend line for accommodation is very closely
matched in the lead times for booking transport. Luxury
travellers are most likely to book between one and
four weeks before the trip, with three to four weeks the
most common timeframe 54.8% of luxury travellers
book between one and four weeks as opposed to
36.5% of the rest of the sample, according to the survey
(EyeforTravel Luxury Travel Analysis, 2017).
Figure 20: Lead Times for Transport Booking
35%
30%
25%
20%
15%
10%
5%
0%2-3 months1-2 weeks 5-6 months More than
one yearLess than one week
3-4 months3-4 weeks 6 months to 1 year
Used own vehicle
n Luxury consumers n Rest of sample
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time means the cost of their holiday is a bit higher due to
availability issues they may be more willing to accept a
higher price point. They’ll deem that value for money.”
However, at the very top end of the spectrum Richard
Frampton, a travel manager at Hurlingham Travel
Services, has found an increase in the lead times for
booking trips among his clientele: “People seem to be
taking longer to make up their minds. This is a mixture
of luxury consumers shopping around and being
careful before they spend the money. Even for our most
loyal clients, you give them a quote and then it can be
six weeks before they come back and book it.”
He says the usual spend for holidays among his clients
is between GBP15,000 - GBP25,000 for a family holiday,
though the sums can go up over GBP100,000.
“There’s always a bit of a gap when people are spending
a lot of money but it seems that maybe it’s a bit longer
than it has been in the past,” he says. Most of his clients
are from the UK, so their budgets may have been
affected by the fall in the value of the pound since the
EU referendum.
54.8% of the luxury sample saying this was when they
booked tours and activities for their previous vacation,
versus 31.5% of the remainder of our survey population
(EyeforTravel Luxury Travel Analysis, 2017).
This fits in with the wider evidence of the importance
of a vacation activity’s cultural capital for wealthier
travellers and their growing spend on experiences. The
kind of experience that is becoming the hallmark of
the luxury traveller stands above the average traveller’s
mass cultural activity and is therefore far more likely to
be something that needs to be booked in advance.
“Luxury travellers may book their Antarctica cruise 18
months in advance to ensure they get the itinerary and
cabin they want, while a city break to Europe may be
booked with just a week or two lead time,” according to
Lisa Warner, marketing director at luxury travel operator
Abercrombie & Kent.
“While not as price sensitive as the average traveller,
luxury travellers remain concerned with enjoying value
for money. The difference is that they have the luxury of
valuing their time more highly so if a shorter lead-booking
Figure 21: Lead Times for Tours and Activities Bookings
40%
35%
30%
25%
20%
15%
10%
5%
0%2-3 months1-2 weeks 5-6 months More than
one yearLess than one week
3-4 months3-4 weeks 6 months to 1 year
Booked whilst on vacation
n Luxury consumers n Rest of sample
Source: EyeforTravel Luxury Travel Analysis, 2017
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consumers tend to have top-of-the-range smartphones
which are larger and faster, making researching and
booking accommodation easier.
This trend towards mobile booking is echoed in
transport, where 30.2% of luxury consumers have used
their mobiles to book transport compared to 18% of
standard travellers (EyeforTravel Luxury Travel Analysis,
2017).
When it comes to research, the difference is far less
pronounced with only a very small differential between
the two populations. Nearly 36% of luxury consumers
use the mobile to research their trips, compared to 32%
for non-luxury consumers (EyeforTravel Luxury Travel
Analysis, 2017).
In both population tablets continue to be niche
products, but interestingly the smartphone edges
out the tablet for luxury travel consumers, with tablet
usage more widespread for the rest of the population.
When it comes to booking accommodation, 19% of
non-luxury consumers use their tablets compared to
13.5% of luxury consumers (EyeforTravel Luxury Travel
He adds that another contributing factor may be that as
the luxury market is so vast and there is so much variety
on offer, clients need to think longer before choosing a
specific option. He doesn’t believe the trend to taking
longer to decide on a luxury holiday is because people
are more careful with their money, though adds that
people are still conscious of money and don’t want
to waste it. He says: “There’s this pre-conception that
because I’m spending this much money, I’m not going
to have a problem getting what I want. However, that
really isn’t the case.” He recently quoted a price for a
luxury holiday for a group of clients. They considered
the holiday, then came back after five weeks to book,
but the price had gone up by GBP2,000, he recalls.
3.2 Devices used During JourneyWhile luxury travel consumers and the rest of the
population look very much alike in the devices they
use to research their travel, the former are a lot more
comfortable booking their travel on smartphones.
Over 30% of luxury consumers have booked travel
accommodation using their mobile phones compared
to just 13% of standard travellers, our research shows
(EyeforTravel Luxury Travel Analysis, 2017). Wealthier
Figure 22: Research Devices Used to Plan Trip
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%Desktop/Laptop
33.3%
35.8%
15.2%
4.4%
1.3%
44.9%
32.0%
15.3%
6.7%
1.1%
Smartphone Did not use a deviceTablet Other
n Luxury consumers n Rest of sample
Source: EyeforTravel Luxury Travel Analysis, 2017
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Figure 23: Devices Used to Book Accommodation
Desktop/laptop
Smartphone
Tablet
Face-to-face
Other/did not book accommodation
To a call center
0% 20% 40% 60%10% 30% 50%
48.8%
46.0%
13.9%
31.1%
19.1%
13.5%
8.5%
4.1%
6.7%
3.5%
3.0%
1.8%n Rest of sample n Luxury consumers
Source: EyeforTravel Luxury Travel Analysis, 2017
Source: EyeforTravel Luxury Travel Analysis, 2017
Desktop/laptop
Smartphone
Tablet
Face-to-face
Other/did not book a flight
To a call center
Figure 24: Devices Used to Book Flights
n Rest of sample n Luxury consumers
0% 20% 40% 60%10% 30% 50%
46.8%
47.0%
18.2%
30.2%
12.8%
13.4%
13.1%
5.4%
9.0%
2.4%
2.0%
1.8%
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offers powerful ways of building direct contacts with
wealthy clients. Targeted digital marketing is powerful
as luxury brands need to create an air of exclusivity and
may be niche, which can mean forgoing mass market
advertising campaigns.
Maria Pajares, managing director of luxury hotel
marketing agency Mason Rose, says: “Hotels continue to
focus enormously on their own websites as a marketing
channel and booking source, while in most cases still
highly valuing their third-party relationships.
“Social media and digital marketing also continue
to be an area of key focus. Rich content, in particular
video and some virtual reality, ranks highly in terms of
prioritization. Influencer marketing and partnerships
which support and enhance a hotel’s brand by
association and open access to a valuable database
have grown in importance.”
Marketing luxury experiences via digital rests largely
on having authentic, outstanding photography taken
specifically to attract premium audiences. While many
hotels are creating Facebook pages where guests
can upload photos, some of the strongest marketing
messages are put out on Instagram and Pinterest. Hotels
are linking up with influencers on Instagram, which
now has 600 million users worldwide. Starwood Hotels
& Resorts teamed up with five Instagram bloggers and
included a booking feature within their photos. Some
of the influencers are treated to stays at luxury hotels,
where they photograph their surroundings and post
the images to their Instagram accounts. This gives
luxury hotels an ability to communicate with Instagram
followers using real life-images created by guests,
establishing an air of exclusivity and communicate the
experience. User-generated content gives hotels added
credibility compared to photography they commission
themselves.
Some of the leading influencers for luxury travel on
Instagram operate on sponsorship basis. Beautiful
Destinations (9.6 million Instagram followers),
Luxury World Traveller (2.6 million followers), and
OnlyForLuxury (2.4 million followers) all provide
Analysis, 2017). This runs counter to the assumption that
the tablet is a tool of well-off consumers and points to a
distinctly smartphone-led future for the entire industry,
as luxury consumers are more likely to be in the leading
edge of technology consumers who lead the way for
tech trends.
Running alongside this theme of lower spending part of
the population using more traditional booking routes,
the research also shows that non-luxury consumers
are twice as likely to book flights and accommodation
through a “face-to-face” travel agent and more likely to
use a call center.
However, it is worth noting the importance of
demography amongst the target market as well, with
age also playing a crucial role. “As with all consumers,
there is a move from laptop to mobile. The main
difference we’re seeing is that unlike the millennial
travellers, who have almost bypassed the tablet in
favour of phones, the luxury traveller is often a little
older and still shows a preference for tablet over phone,”
says Abercrombie & Kent’s marketing director Lisa
Warner. “That said, while online is the favoured research
channel, it’s still the phone that’s preferred for the
booking process.”
3.3 reaching the luxury ConsumerAs the luxury market has expanded over recent years,
a flood of new supply has come on stream to meet
demands, with new luxury hotels, restaurants, premium
experiences and destinations crowding the market.
This has made it hard for each player to stand out from
their rivals. There has been an expansion of media
outlets fuelled by the digital revolution. However, the
luxury consumer can be hard to reach through standard
marketing channels.
The luxury travel industry has put much store by
collecting data from loyalty schemes and keeping the
details of luxury travellers on file to target them later but
there are now more ways to reach the luxury consumers
as social media expands as a potential channel. While
many luxury brands once eschewed online marketing
and social media, they now understand that digital
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We use technology to help us communicate relevant
and engaging content to our clients and provide
data to inform our consultants, but at the end of the
day there’s no substitute for the human touch. At all
times, we prefer our clients to have the opportunity to
speak to our team, to build a personal relationship that
develops over time. If we can do this, we believe the
best advertising for A&K are those who travel with us
on numerous unforgettable trips and return as brand
ambassadors.”
Many luxury travellers believe they can obtain
better value for their money by going through a
well-connected travel agent. The agent will have
partnerships with leading hotel groups, enabling them
to get better deals and create a bespoke itinerary.
Richard Frampton, travel manager at Hurlingham
Travel Services, says the company has benefited from
membership of Traveller Made, which has connections
with luxury hotels across the globe. “For us it is amazing.
If we get enquiries, it is one of my first places to go,”
he says. Traveller Made negotiates partner benefits
and the agent signs into the site to find hotels deals,
then contacts the hotel directly. Travel agents offer to
negotiate extras such as breakfast and VIP treatment.
“It is all those little things that really make the holiday,”
says Frampton. He gives the example of Le Bristol Hotel
in Paris where breakfast can cost EUR60 per person and
a room EUR1,200 a night. “Sometimes it doesn’t matter
how much money you’ve got, a little extra can make all
the difference.”
sponsorship packages (Instagram, 2017a; Instagram,
2017b; Instagram, 2017c). Luxury brands such as Aman
Resorts has a widely-followed account as does Mr & Mrs
Smith, an agent for boutique hotels.
However, for some hotels, the social influencer route
can have hazards as it lessens the control that the
hotel brand has over the message. Lisa Warner at
Abercrombie and Kent says: “The key to marketing
to the luxury traveller is a bespoke, integrated and
consistent approach – a consistent message, integrated
across all channels that clearly communicates how we
can improve their quality of life.”
This is easier to achieve on WeChat, which is critical for
reaching Chinese luxury consumers, particularly as they
are younger and more technologically engaged than
wealthy travellers in the West. Customization of pages
and additional functionality means luxury travel brands
can control their image and reach the consumer with
targeted information when consumers are researching
and also when they are travelling by tapping into location
data. This can help to facilitate the experiences luxury
consumers crave and also to improve vacation shopping. It
even means WeChat users can book in-store consultations
directly from the app and, for many elite travellers having
personal contact with a travel agent is vital.
As Warner says: “We know that our most valuable
asset is our people. Our specialists take the time to
learn about their clients’ travel requirements to be
able to create the best holiday to meet their needs.
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Luxury travellers take twice as many leisure trips as
non-luxury consumers, according to our research. Luxury
consumers take an average of 5.6 trips per year against 2.8
a year for the rest of the sample. For the former, these are
equally split between domestic trips and international trips,
at an average of 2.8 for both. Meanwhile, the rest of the
population, which has to be more conscious of budget,
is slightly more predisposed to domestic travel, taking an
average of 1.3 international trips and 1.5 trips within their
own country (EyeforTravel Luxury Travel Analysis, 2017).
These international trips are also more likely to be much
closer to home for the average consumer, with the luxury
traveller able to range far further on their international trips.
4.1 Trips Taken and Planned Looking at the dispersion in the number of journeys
planned between the two groups gives an even clearer
picture of the far greater ability and desire of the luxury
traveller to take multiple trips throughout the year.
A huge 16% of luxury travellers report planning 10 or
more trips per year, compared to just 2.5% of the other
consumers in the survey. A further quarter of luxury
travellers plan to take between five and nine trips in the
12 months after the survey was taken, far above the 6.3%
of lower income consumers. Once again, luxury travel is
twice the average, with luxury travellers planning twice
The Value of Luxury Travel Consumers and Their Spending Patterns
Figure 25: Number of Trips Taken Per Year
2.8 2.8
5.6
1.51.3
2.8
6.0
5.0
4.0
3.0
2.0
1.0
0.0Luxury consumers
domestic trips taken
Rest of sample domestic trips
taken
Luxury consumers international trips
taken
Rest of sample international trips
taken
Luxury consumers total
trips taken
Rest of sample total trips
taken
Source: EyeforTravel Luxury Travel Analysis, 2017
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35.7%. Instead luxury consumers lead ordinary travellers
by just over 26 points when planning to vacation both
internationally and domestically. They also lead the
rest of the sample when it comes to planning to just
take trips internationally, although by a smaller margin
(EyeforTravel Luxury Travel Analysis, 2017).
4.2 The value of luxury ConsumersAverage spend per trip is a key measure of revenue
for the travel industry. Our survey found that luxury
as many trips than other consumers. For the remainder of
our sample 57.3% of consumers plan to take two or less
trips (EyeforTravel Luxury Travel Analysis, 2017).
Planned trip locations show slightly more variation
than trips taken, illustrating the enhanced desire and
means luxury travellers have to journey outside their
home country. Less than half the percentage of luxury
consumers plan to vacation only domestically than
those in the rest of our survey population, at 16.2% to
Figure 26: Number of Trips Planned Over 12 months - Luxury Consumers Versus Rest of Sample
40%
35%
30%
25%
20%
15%
10%
5%
0%0 42 6 81 53 7 9 10 or
more
n Rest of sample n Luxury consumers
5.0%
1.5%
16.1%
36.2%
29.7%
4.2%2.7%
1.5% 1.2% 0.8% 0.1%
2.5%
9.2%
18.4% 19.2%
10.8%9.5%
7.0%
3.7% 3.7%1.0%
16.0%
Source: EyeforTravel Luxury Travel Analysis, 2017
Source: EyeforTravel Luxury Travel Analysis, 2017
Figure 27: Planned Domestic and International Trips
Vacation both domestically
and internationally
Vacation
internationally
Vacation
domestically
n Rest of sample n Luxury consumers
0% 20% 40% 60%10% 30% 50%
28.6%
54.7%
35.6%
29.1%
35.7%
16.2%
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all consumers but particularly among the luxury
segment. If they do then the travel sector will need to
plan even more capacity and put even more emphasis
on catering to these travellers.
4.3 luxury Consumer key spending itemsWhile there is still a strong market in offering luxury
consumers a quiet time by a luxurious pool, good food
and some sightseeing, luxury holidays are increasingly
focused on delivering rewarding and transformative
experiences. There is a new focus on areas such as
“wellness” – activities ranging from yoga to spas – as
well adventure activities such as diving and safaris and
cultural and educational tours.
Edie Rodriguez, chief executive of Crystal Cruises
says luxury travellers look for what she calls ECO –
“exclusivity, customization and options.” This means
there needs to be an offer tailored to each individual
traveller – recognizing their personal needs whether
dietary, health or cultural. Offering a range of options is
important to meet the traveller’s needs. Tour operators
and hotels need to be able to offer a variety of activities.
If a traveller books a wellness holiday, the chances are
consumers spend USD5,365 per trip, more than three
times more than the rest of the sample, who spent
USD1,690. When multiplied by the average number of
trips taken each year, the disparity between luxury and
standard travellers becomes even more stark. Luxury
consumers spend some USD30,208 per year on holidays
while the rest of the sample spend USD4,732 or, to put
it another way, the wealthier consumers outspend the
standard travellers by over six times (EyeforTravel Luxury
Travel Analysis, 2017).
This may explain the belief by many in the travel
industry that luxury travel accounts for up to a half
of spending in the entire sector. It also demonstrates
the enormous value the sector has currently and
in the future. We know that income and wealth
correlate with trips taken and travel spending, so it
is no surprise that luxury travellers are more valuable
to travel brands, although the gap is considerable.
What is perhaps more notable is that this gap is
going to accelerate and become more pronounced
if the forecasts for the overall luxury travel sector
come to pass, which seems likely given the economic
situation and shift to experiential spending among
Figure 28: Average Spending Per Trip in US Dollars Figure 29: Annual Value of Consumers Per Year in US Dollars
Source: EyeforTravel Luxury Travel Analysis, 2017Source: EyeforTravel Luxury Travel Analysis, 2017
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0Average spend per trip rest of sample
Average spend per trip luxury consumers
$5,365
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0Rest of sampleLuxury consumers
$30,208
$4,732
$1,690
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tourists have paid a reported USD20m each to visit the
International Space Station orbiting earth, including the
first such visitor, Dennis Tito, in 2001. Virgin Galactic, Blue
Origin and Elon Musk’s SpaceX are all planning to offer
sub-orbital space trips. SpaceX claims it will carry two
tourists on a trip around the moon in 2018.
More down-to-earth activities include immersion in art and
they will also want to mix this with sightseeing and
cultural activities too.
Some of the most popular activities for premium travellers
are explored in research by Resonance for its 2016
Future of Luxury Report. It found that luxury travellers are
constantly looking out for new, exciting experiences. For
the richest, these include trips into space. Seven space
Figure 30: Vacation Activities Participated in by Top 1% of US Consumers
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%Dining Engaging
with natureLearning
new thingsAttending
cultural events sights
Heath and fitness
Sightseeing Fun attractions
Visiting cultural
attractions
Shopping Nightlife
n Regularly n Occasionally
Source: Resonance, 2016
Table 5: Vacation Activities Participated in by Top 1% of US Consumers
regularly occasionally
Dining 76% 94%
Sightseeing 62% 91%
Learning new things 53% 90%
Visiting cultural attractions 45% 90%
Engaging with nature 40% 85%
Fun attractions 37% 85%
Attending cultural events and performances 37% 85%
Shopping 41% 83%
Health and fitness 38% 78%
Nightlife 23% 75%
Source: Resonance, 2016
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Resonance research shows that the top 1% are more
interested in fitness than other travellers and more
so even than the top 5%. Health and fitness was also
one of the top categories that the top 1% would like
to try engage in more. The report describes the trend
to “wellness” which includes fitness, health, healthy
eating, meditation and mindfulness as “conspicuous
non-consumption” (Resonance, 2016). This fits into the
culture, including hotels which feature the work of artists.
Resonance surveyed the top 5% income earners and
top 1% earners in the US about their holiday activities.
While the expected activities – dining and sightseeing
- topped the list, areas such as “engaging with nature”
and “attending cultural events and performances” also
scored highly.
Figure 31: Vacation Activities Enjoyed by US Luxury Travel Consumers
activities engaged regularly or occasionally Top 5% (n=1,659)
Top 1% (n=719)
Top us travellers (n=3,379)
Health & fitness
Working out 82% 81% 76%
Spa treatments 67% 76% 51%
Yoga 43% 49% 39%
Meditation 40% 45% 37%
Weight loss programs 32% 37% 32%
Medical treatments 31% 35% 29%
Figure 32: Chinese Millennial Luxury Traveller Motivations
Traveller trends in the next three years
Leisure travel
Exploring the world
Adventure travel
Cruises
Polar exploration
Road trip
Health & recovery
Honeymoon
Celebrations & events
Study
Golf
n Reasons for travel in 2015 n Reasons for travel in the next 3 years
Trend
0% 20% 40% 80%60% 100%10% 30% 70%50% 90%
82%68%
23%35%
16%22%
17%21%
12%9%
40%50%
26%28%
12%21%
11%12%
11%9%
7%5%
Source: Hurun Research Institute, 2016
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They value not only relaxation and comfort, but a period
of personal improvement beyond their everyday lives.
Abercrombie & Kent marketing director Lisa Warner
says the company’s customers are looking to get the
most out of their holiday and to get “under the skin” of a
destination and explore beyond the obvious.
“They’re looking for local interaction, to learn and gain
insight into their chosen destination, to gain access to
places and people that are not on the regular tourist
trail and to create memories that will last. “They enjoy,
appreciate and expect the finer things in life and a
holiday is an opportunity to relax and connect with
friends and family in style,” she says.
Travel agents can be especially important for luxury
consumers as they need flexibility in their travel
arrangements. This is not offered by online services
even if they do offer luxury products.
Richard Frampton from Hurlingham Travel explains:
“Though we don’t advertise ourselves as a concierge
service, people do want a bit more from us.
“We are going to make their meal reservations and
sometimes their spa treatments. We’ll contact the hotels
to say we’ve got a VIP coming so please make sure they
are looked after. That might mean making sure their
rooms are connecting and all the other things which
you just cannot do online.
“A lot of our clients book a holiday, then a business
meeting comes up and they have to change the whole
thing, and it is very difficult to do that online. They want
someone they can come to and chat to. I’ve had some
clients for twenty years, I booked them with their children
and now I am booking their children with their families.”
idea that the modern luxury consumer is switching
spending away from bling towards inner-directed
self-actualization.
Hurun’s survey of wealthy millennials in shows a variety
of motivations for international travel but some similar
growing themes. Leisure travel was the biggest reason
for international trips, though the respondents reported
this motivation as less important in the future. Instead
exploration and adventure were the big themes that
were growing, as was health and wellness. Exploring
the world, adventure travel, road trips, journeys to the
poles and health were all seen as more important in the
coming three years compared to their motivations for
travel in the preceding year.
It should be noted that the above is a snapshot of
a market segment and there can be great variation
between ages and markets. For example, in the case
of Japan, wealth and leisure time are overwhelmingly
in the hands of older consumers, meaning adventure
is less important with comfort and service more
emphasized and domestic travel and cruises
experiencing big growth in the country’s luxury travel
market (see Section 2.2.2 for more on Japan).
Nonetheless, there does seem to be a broad trend,
particularly at the top market to move towards new
adventurous experiences and to keeping healthy, with
the trends more pronounced at the very top of the
market.
4.2.1 what do luxury Consumers value most when it Comes to Travel?Today’s luxury consumers are using travel to explore
both the world and themselves. They seek different
things from their holidays, depending on their moods,
their intentions and their life stages.
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The evolution of the “experience” as a driving force
in luxury travel will be an important trend for travel
operators over coming years.
“Luxury travel has evolved from being primarily
about the 5-star glamour and glitz to becoming far
more centred on experiential travel, something A&K
has specialised in for over 50 years,” says Lisa Warner,
marketing director at A&K. “Today’s affluent travellers are
far more interested in creating and sharing memories
based around unique encounters, sights or experiences
not available to the average tourist.”
She adds that with social media playing an increasing
role in our lives, travellers have become storytellers. “The
stories that resonate most amongst the luxury traveller
fraternity are those garnered from local interactions and
authentic experiences that truly enrich their lives and
that of those they are meeting and interacting with,” she
says.
In order to get to this, they are going further and
further and looking to more unique experiences. A
survey by Tourism Economics predicts that globally,
long-haul luxury trips will overtake short distance trips
by 2025 (Amadeus, 2016). This leap to farther flung
destinations is that today’s luxury travellers can be
lowered into volcanic magma chambers in Iceland,
camp in the African savannah or get court-side tickets
to Masters tennis matches. They are sitting through
talks in hotel conference rooms on art, cuisine and
philosophy from global experts. They are exploring
ever-more experimental wellness and health regimes.
They are staying in luxury hotels in European cities,
then spending the days in groups running through the
streets of these capitals, combining culture and fitness.
Luxury travellers are pushing new boundaries. Many
want to feel that they have “earned” their luxury
experience through some element of struggle or
danger, rather than simply having it handed to them
on a plate. This is in keeping with the need for the
emerging rich to feel that they are “worth” their new
wealth rather than being simply blessed with luck.
Luxury hotels and providers will need to cater for
this sense of responsibility by making sure they
have a purpose beyond simply making money. They
need to recognize their broader social role. There is
a bourgeoning trend to eco-tourism, such as luxury
hotel holidays in Borneo that fund the preservation of
the endangered natural habitats of orangutans. Luxury
hotels are increasingly taking heed of environmental
concerns, with some installing solar panels and
becoming carbon neutral. The Ramada Eco Beach
Resort in Australia uses an integrated power system
which is 50% solar powered and they have on-site
water recycling. Guests can see their own energy
consumption on monitoring systems in their rooms.
The hotel promises a “unique wilderness experience,
whilst having minimal impact on the surrounding
landscape.”
Luxury providers need to work hard to maintain the
individuality of their offers and make their guests feel
like they have experienced something unusual, special
and extraordinary. An extension of this is to extend
brands that already have this allure into the travel space.
Trends in Luxury Travel
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Buzz Aldrin to come and use the observatory at Soneva
Fushi, with a dinner after, and inviting a famous glass
artist and a deep-sea diver. These talks give guests an
opportunity to meet each other.
He says a cocktail party for guests thrown by a hotel’s
general manager “can be quite naff.” But added: “If
you have it on a sandbank it becomes quite a good
experience, they can go swimming or interact at a
secondary level, not through a cocktail conversation
breaking the ice, because the ice is already broken.”
He said that encouraging interaction between guests
had helped him boost repeat business by up to 52%.
“A lot of that is people meeting each other on holiday
and coming back. You get emails saying our friends
are coming back, we are going to spend time with
them. That is important, that sense of community,
but it doesn’t mean you need a lobby. It is how you
curate that experience,” he told the New York Times
International Luxury Travel conference in December
(New York Times, 2016a).
An experience also lends itself to storytelling.
A narrative is vital for a luxury brand as it gives
authenticity and enhances the experience element.
Luxury holiday home rental service Thirdhome
has advertised for a “storyteller” to promote its top
properties on social media through words, photos
and videos. On the other side, many luxury travellers
enjoy sharing their experiences through review sites
and social media. These become important influencers
of perceptions about luxury hotels and providers and
need to be built into a brand’s story.
However, there is a danger that staying connected
to email and social media can interrupt the special
experience of a luxury trip and bring the traveller
back down to earth. Luxury operators need to strike a
balance between high-tech and high touch, offering
the right combination for the travellers they seek to
attract. For instance, the Red Mountain Resort in Utah,
USA offers wellness retreats and has introduced an
optional digital detox programme.
Several luxury brands that have opened hotels in key
locations. Italian luxury watch and jewellery brand
Bulgari has hotels in Milan, London and Bali and opens
new branches in Shanghai and Beijing this year. Armani
has hotels in Dubai and Milan. Versacci has Versacci
Palazzo hotels in Australia and Dubai. Maison Moschino
is a 65-room hotel in Milan. These hotels offer a three-
dimensional version of the brand experience and allow
visitors to live out the vision of the brand.
Another significant trend is an increase in luxury
consumers using travel agents. American Express
reported last year that there had been a 110% increase
in wealthy travellers planning to use retail agents in
2017 rather than OTAs. The company’s travel booking
data also revealed a 26% rise YoY in the length of stay
for advanced bookings among the top 20 international
destinations (Travel Market Report, 2016).
Claire Bennett, executive vice-president for American
Express Travel, said personalisation and streamlined
services are key motivators for luxury travellers, who
expect customised travel experiences. “Today, affluent
consumers are more knowledgeable, are often in
control of their travel experiences and, across all ages,
are in pursuit of curation, comfort and convenience,”
she said.
5.1 meeting People and Telling a storyWhile luxury travellers are often thought to value their
privacy, they are also looking to meet like-minded
people.
Sonu Shivdasani, founder of the luxury Soneva Fushi
and Jani resorts in the Maldives and Six Senses Resorts
and Spas, told a recent luxury travel conference that
hotels and providers need to offer both privacy and a
sense of community.
“Having big villas with privacy and a sense of
community is also important, though you don’t need
a big lobby, you can orchestrate opportunities where
people can meet each other,” he said.
He described inviting the second man on the moon,
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and desires of these travellers, which can be quite
different to travellers from the West and even from each
other.
5.3 Generational TravelMillennials are an increasingly important group of luxury
travellers whose needs must be considered, especially
as this is the core demography for Chinese luxury travel.
They are successful young business people, performers
and sports stars or the off-spring of wealthy families and
are already the largest demographic group by numbers
if not yet wealth.
They are environmentally aware and they tend to stay
longer and to interact more closely with communities
they visit. There are opportunities to target wealthy
millennial travellers with socially responsible travel and
to build links between them and local communities.
Hurun’s research into millennial luxury travellers
in China found that over half of the 525 young
people interviewed were the second generation of
wealthy families. An interesting finding was that they
see five-star hotels as standardised and lacking in
distinctiveness. This makes it hard for these hotels to
offer unique experiences. 42% of respondents said they
wanted to stay in a hotel with a unique brand style and
40% wanted an artistic design. Outside of booking with
a major hotel chain, the most popular accommodation
was a private boutique hotel followed by a cruise on
a yacht. A variety of hotel brands have recognized this
and a variety of boutique brands have been launched
by groups, such as Hyatt, Marriott, Hyatt and Wyndham.
37% also said they would consider short term vacation
rentals such as Airbnb (Hurun Research Institute, 2016).
Millennials expect a connected experience during their
luxury trips and use mobile apps as a form of digital
butler. For example, the Four Seasons app allows users
to check in and out of their rooms and to order room
service. But while millennials demand the ability to
bypass personal service through technology, many
luxury consumers expect a “high-touch” experience
with a strong degree of personal service. Some hotels
are offering an off-grid experience where people can
5.2 asia as the engine of GrowthOne of the biggest trends over the coming decade will
be the rapid growth of luxury outbound travel from
Asia. This growth is fuelled mainly by the top source
markets of China, India and Indonesia. Spending by
outbound Asian tourism will grow from USD260 billion
in 2010 to USD650 billion in 2020, accounting for 40%
of worldwide outbound consumer spending, according
to research from the Singapore Tourism Board in
association with Boston Consulting Group, and as noted
in Section 2.2.1 Chinese consumers alone will buy 44%
of the world’s personal luxury goods by 2025 according
to McKinsey (McKinsey, 2017; New York Times, 2017b).
Asian travellers are increasingly coming from second
cities in these nations and are not just spending on
cosmetics, jewellery and fashion, but increasingly on
events and experiences. Luxury destinations will need
to make sure they are well acquainted with the needs
viewpointMaria Pajares of Mason Rose gives her views on the
trends shaping luxury travel: “Geographically, there
are certain destinations which are proving very
popular such as Sri Lanka and Burma. Ibiza, although
not new, is currently seeing a surge in a more
sophisticated offering of 5-star accommodation
with a couple of exciting new luxury hotels about to
open including Nobu Ibiza Bay and Seven Pines. The
African continent continues to appeal – for example,
we’ve taken on an exciting new hotel opening later
this year in Zanzibar. We can see that many of our
hotels continue to invest in China and the Middle
East in terms of sourcing business.”
She adds that culture is key, especially with city
destinations. Access to cultural and sporting events
can be very attractive during the purchasing
decision-making process. She gives the examples of
Peninsula’s Pen Cities and Academies programme,
which “opens up a world of local possibilities offering
unique access and experiences of Forte Village’s
partnerships with Chelsea Football Club and various
sporting legends.”
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grandparents and children use luxury holidays as a
family re-union. Such groups often opt for home rentals,
chalets, cottages or cruises. The grandparents often
make the bookings as they have most time. Operators
offering such holidays need to be aware of the varying
technology needs of the different generations, by
supplying connectivity for the millennial family
members.
escape from connectivity and undergo a “digital detox.”
Operator Digital Detox Holidays offers device-free
holidays, such as the Cockatoo Hill Retreat Daintree,
Australia, which consists of “exclusive” tree lodges in the
Daintree Rainforest.
A buzzword that has become popular in luxury
travel is “multi-generational” travel, where parents,
Figure 33: Alternative Accommodation Options Considered by Millennial Chinese Luxury Consumers
Source: Hurun Research Institute, 2016 0% 20% 40% 60%10% 30% 50% 70% 80%
Private boutique hotel
Cruise/yacht
Private short-term vacation rentals, like Airbnb
Staying at the home of a friend/family member
63%
54%
37%
15%
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Co
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6.
Luxury travel is set for significant growth over the
coming decade. For the purveyors of premium travel
this is both a blessing and a challenge. Luxury implies
elegance and comfort but is also a rare pleasure that
is difficult to obtain. Luxury is never commonplace. As
luxury travel becomes more widespread, it risks losing
its mystique and allure. Luxury travel operators - hotels,
agents, cruise operators and other providers, must
maintain the distinctiveness of their offer while finding
ways to increase their share of this expanding market.
Many are well-placed to prosper if they can balance
that equation and increase turnover, sales and customer
numbers without damaging premium brand values.
Success in luxury travel will be all about balancing a
variety of difficult equations.
One will involve dealing with the paradox of choice. A
problem with the rapid expansion in the luxury travel
market over recent years is the plethora of options being
offered. This becomes confusing and complex which can
add stress to the process of booking a holiday.
One of the watchwords of luxury over coming years
will be simplicity – stripping out the many options
and making travel booking easy. But this crunches up
against the trend towards personalization and travel
tailored to the needs of the individual. That implies that
there will be millions of options so each traveller can
choose one tailored to their wishes.
Data analysis will help consumers thread their way
through the complexity. Digital services will learn
about the preferences and likes of consumers and use
algorithms to offer them the ideal selection of options
to suit their tastes. The growth of artificial intelligence
should enable this, though these are early days for
the new technology. AI powered apps such as Lola, a
start-up founded by Kayak founder Paul English, offers
to take much of the complexity out of booking travel.
But for all the talk of technological advances, the personal
touch is still vital in luxury. That’s why many high-spending
consumers still use travel agents. Finding the middle
ground between high-touch and hi-tech service is another
delicate balancing act for luxury travel providers.
Cementing relationships with frequent customers
will be vital. That means finding ways to expand their
involvement whether through encouraging them to
extend their trips for a longer time, to increase the
frequency of trips or to boost the amount they spend.
Offering ever more interesting and extraordinary
experiences is a way of creating this offer.
Players in luxury travel that manage to balance these
tensions can expect rich rewards from this market over
the next ten years.
Conclusion
www.eyefortravel.com The Global luxury Travel Consumer | 57
meTh
oD
olo
Gy
EyeforTravel’s proprietary data is constructed using
a composite of results from its consumer surveys
conducted in China, Germany and the UK. These
surveys were conducted using online panels
obtained in conjunction with marketing research firm
TapResearch and the respondents divided as luxury and
non-luxury travel consumers based upon their reported
annual household income.
The UK survey was conducted between 1st of June
2016 and 18th June 2016. It was conducted entirely
online. Overall 2,806 respondents began the survey and
2,268 completed the full survey. There was a qualifying
question where respondents who had not taken an
international or a domestic vacation within the last
12 months were disqualified from further questions
in order to have a group that could accurately answer
travel-related questions.
The German survey was conducted between 21st of
July 2016 and 31st July 2016. It was conducted entirely
online. Overall 2,944 respondents began the survey and
2,193 completed the full survey. There was a qualifying
question where respondents who had not taken an
international or a domestic vacation within the last
12 months were disqualified from further questions
in order to have a group that could accurately answer
travel-related questions.
The Chinese survey was conducted between 4th
January 2017 and 1st February 2017. It was conducted
entirely online. Overall 2,757 respondents began the
survey and 2,161 completed the full survey. There was
a qualifying question where respondents who had not
taken an international or a domestic vacation within the
last 12 months were disqualified from further questions
in order to have a group that could accurately answer
travel-related questions.
In total, there were 8,507 respondents who began all
of the surveys and 6,622 who completed the surveys.
Luxury travel consumers numbered 2,218 initial
respondents. After filtering to remove those who had
not taken at least one leisure journey in the 12 months
preceding the survey, there were 2,167 luxury travel
respondents, 1,853 of whom completed the full survey.
Luxury travellers were defined as those with household
incomes of approximately USD100,000 in local currency
and at purchasing power parity levels at the time
the survey was conducted. Purchasing power parity
conversion rates were taken from OECD figures for 2016
(the latest available conversion rates). For the UK survey this
was GBP70,000. For the German survey this was EUR70,000.
These were the highest income options available in the
surveys. For the Chinese survey, the cut-off point to be
defined as a luxury traveller was RMB200,000.
Not every question contains all three survey data as
changes in question methodology between surveys
at points made direct comparison inapplicable. At all
points the maximum data set available was used.
Methodology
www.eyefortravel.com The Global luxury Travel Consumer | 58
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