by The Luxury Travel Market is estimated to be valued at US$ 260.23 Mn in 2023 and is expected to exhibit a CAGR of 7.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
The luxury travel market consists of tours and vacations at high-end resorts, hotels, cruise ships, trains and private islands. Luxury travelers are looking for unique and enriching experiences that connect them with local people and places. They demand the highest standards of service and amenities like private guides, chauffeurs, butlers and secluded villas or suites.
Market key trends:
One of the major trends driving the luxury travel market is the increasing preference for experiential travels rather than sightseeing. Travelers nowadays want to immerse themselves in local cultures through food, arts, crafts and activities. They are keen on interacting with locals and learning about their traditions. Luxury travel companies are focusing on offering more authentic experiences through local cuisine classes, art workshops, farm visits, wellness activities etc. This helps travelers gain a deeper understanding of destinations and also instills a sense of connection. The experience economy is a huge opportunity for luxury travel brands to craft one-of-a-kind memorable journeys.
Porter’s Analysis
Threat of new entrants: High capital required and established brand loyalty in the luxury travel market make it difficult for new entrants.
Bargaining power of buyers: Individual luxury travellers have high bargaining power due to variety of options available.
Bargaining power of suppliers: Travel agencies have significant bargaining power over destinations and experiences suppliers due to their brand value and scale of operations.
Threat of new substitutes: Technological advancements enable new forms of bespoke luxury experiences with direct bookings, increasing threat to traditional luxury tour operators.
Competitive rivalry: Intense competition among established brands to attract high spending customers.
SWOT Analysis
Strength: Strong brand recognition, expertise in tailor making exclusive experiences, global network and high client retention.
Weakness: Over-reliance on seasonal one-time clientele, high operating costs, vulnerability to economic downturns.
Opportunity: Emerging economies in Asia Pacific and Middle East to drive future growth, increasing demand for niche experiences like wildlife tours, culinary trips.
Threats: Digital disruption through new online booking models, health epidemics/pandemics impacting travel.
Key Takeaways
Global Luxury Travel Market Demand is expected to witness high growth, exhibiting CAGR of 7.8% over the forecast period, due to increasing disposable incomes and evolving preferences of millennial travelers.
Regional analysis indicates Europe dominates currently with over 35% share due to high spenders from countries like France and UK. However, Asia Pacific is poised to be the fastest growing region during the forecast period, expanding at a CAGR of over 9%, led by China, India and Southeast Asian countries.
Key players operating in the luxury travel market are Abercrombie & Kent USA, Absolute Travel, Inspiring Travel Company, TCS World Travel, TÜ ELITE, Cox & Kings Ltd., Travcoa, Micato Safaris, Scott Dunn Ltd., Kensington Tours Ltd., and Butterfield & Robinson Inc. While European players have established presence, American brands are eyeing opportunities in the burgeoning Asian luxury travel market.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
