Luxury travellers outspend the rest by over 600% and the gap is growing
Whilst the average traveller spends $1,690 per trip, luxury consumers on average lavish $5,365 per trip according to the report. The different levels of spending become even bigger over the course of a year as luxury consumers take double the trips per year at just over 5.6, meaning a per annum outlay of over $30,000, or six times the average traveller’s spend.
This gap is more likely to widen than diminish says the research, as wealth continues to accrue at the upper end of the income spectrum and luxury consumers prioritise experiential spending and put less emphasis on personal goods. The number of High Net Worth Individuals (HNWIs) globally is expected to comfortably grow by double digits each year well into the 2020s, adding millions of luxury consumers into the market.
The report found that luxury consumers in the report’s survey were also planning to take twice as many vacations on average, illustrating the continuation of current trends. 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% reported by lower income consumers.
These consumers are switching more of their discretionary spending into leisure travel, with developed economies leading this trend but transition occurring rapidly in emerging economies as wealth becomes more widespread. The change will affect luxury consumer behaviours as they book and once they travel. For example, the report notes that Chinese luxury consumers are shifting their spending away from shopping and towards activities and accommodation, with adventure and exploration increasing in importance as shopping falls.
Whilst high-end tours and activities should be one of the primary sectors to benefit given the importance they have to the travel experience, the changing emphasis of luxury traveller priorities means that hotels will need to think hard about how to appeal to these consumers. Luxury travellers ae now more focused on finding unique accommodation and so hotels will need to think about character and local interactions that can really add something to these consumers’ trips while still continuing to provide a high level of service.
“Our research suggests that despite the challenges, it pays to focus on the luxury traveller. For the rest of the market they are also worth keeping a close eye on not just because of their profligate spending but also because they are at the forefront of trends and leading-edge consumers that can help us figure out where the wider market will head in the future,” says Alex Hadwick, Head of Research at EyeforTravel. “The luxury traveller is at the forefront of a number of trends, including increasing the amount of disposable income they put towards experiential items and leading the charge for smartphone usage in the travel research and booking process. This, on top of their huge annual spend, means they are a critical segment to understand in the travel ecosystem.”
This detailed report looks at the state of the overall market currently and breaks down individual country markets, luxury consumer behaviors and spending patterns, and gives you the major trends to look out for.
For more information about the report, please visit http://www.eyefortravel.com/distribution-strategies/global-luxury-travel-consumer
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