The promise of a billion-dollar market in the luxury tourism industry

Image source: LOM Financial

Luxury travel is no longer just about expensive destinations and staying at the most luxurious hotels in the world. In fact, the recent trends that currently dominate the entire industry make it more diverse than how it was conventionally perceived.

According to statistics, the new face of the global luxury tourism industry shows an increased interest in destinations that offer unique, exclusive, and exotic holiday experiences for travelers. More interestingly, luxury travels are no longer limited to a particular affluent social group. This is because, the popularity of the luxury travel experiences in the social media coupled with the increased spending of the middle as well as an upper middle class have shaped and redefined the whole luxury travel market, fueling market growth that is expected to reach over $1.1 billion by 2022, according to the Allied Market Research report.

What drives the demand for luxury travel? According to the same report, the rising growth of the industry can be attributed to luxury travelers’ high spending power as well as their need for exclusivity. Similar studies and statistics that examined the opportunities and forecast for the luxury tourism industry showed that North American and European travelers contributed 66 percent of the industry’s total revenue. In addition, recent data revealed that the global destinations that topped the most-sought-after luxury travel experience are in Kenya.

Safari adventures, for instance, accounted for an approximately 44 percent of revenue not just in the U.S. but of the overall luxury travel market globally. In fact, this segment is still the most popular among young and middle age vacationers. On the other hand, about 70 percent of millennial travelers prefer culinary-focused travel experience as a top motivation in taking their own luxury trips.

Nevertheless, the likes of Santorini, the Cayman Islands, Maldives, and other “expensive” islands remain to be the top choices amongst affluent travelers, given their reputation and the superiority of hospitality services. Just last year, popular offshore investments center and luxury destination Bermuda has hosted the America’s Cup, a racing competition for sailing yachts that attracts not only the world’s top sailors and yacht designers but also wealthy entrepreneurs and sponsors.