Global travel growth has slowed in recent years, but according to a recent Amadeus report, luxury travel remains untouchable. In fact, luxury travel is indisputably the industry’s fastest-growing segment. As reported by Financial Express, the Amadeus report looks at why and what must be done to continue the pace of growth.
First, let’s look at the numbers: Between 2011 and 2015, the compound annual growth rate for luxury travel (measured by business and first class tickets on outbound flights) was 4.5%, as opposed to 4.2% overall. The pace of growth is expected to accelerate between now and 2015—the compound annual growth rate for luxury travel is projected to be 6.2%, as opposed to just 4.8% for overall travel. Most of this growth comes from North America and Western Europe, though the BRIC nations also show significant luxury acceleration.
Why has luxury travel enjoyed such an intense growth spurt? Financial Express explains that the growth is due to consumers’ increasing desire for unique, personal, and exclusive experiences. The transition from investing in material goods to investing in experiences is a theme that’s cropped up in our posts several times over the past year, and the recent Amadeus report confirms that the trend continues to accelerate. The luxury travel sector is best equipped to give consumers the extraordinary experiences that they crave, from white-glove executive car service to boutique hotel experiences.
The luxury travel sector must continue to capitalize on its ability to provide unique experiences in order to ensure its continued success. As we have observed over the past few years, the luxury industry has already changed its nature to accommodate shifting consumer desires. The “new” luxury, according to Financial Express, is “curated, real-time, and experience-led.” The Amadeus report delves into the specifics of what else makes luxury travel so appealing, noting that luxury travelers are drawn to particulars like five-star quality, concierge service, exclusive VIP access, discreet security. The report affirms, that luxury travel service and product providers must focus and enrich their standards of quality and service to continue drawing in luxury travel consumers, and identifies distinct “tribes” based on buying behavior that will help providers curate end-to-end luxury travel experiences.
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