Covid-19 Scenario
During the COVID-19 pandemic, the tourism industry was hit hard and its associated sectors such as travel agencies, hospitality, tour operators, and types of transportation services were impacted. About 90% of the global population adjusted to their lifestyles under several travel restrictions and the remaining population stayed at home in fear of the virus. Thus, the tourism sector came to a near standstill.
Moreover, owing to lockdown and social distancing norms around the world, flights were grounded, trains stopped running, and almost all public transport services were halted. With social distancing becoming the new lifestyle in public places and masks & gloves becoming daily wear accessories, people preferred to stay safe at their homes, thereby impacting the market negatively.
However, the market has recovered post the pandemic.
The adventure and safari segment to dominate in terms of revenue during the forecast period
Based on types of tour, the adventure and safari segment contributed to the largest share of more than two-fifths of the global luxury travel market in 2021 and is expected to maintain a progressive growth during the forecast period. Launch of new services, access to new destination markets, and increase in tourism by European and South American travelers who are mainly interested in experiencing wilderness and enjoying serene surroundings are key drivers of this segment Millennials are also inclined towards adventure and safari travelling types of tourism activities. However, the cruise/ship expedition segment is projected to witness the fastest CAGR of 10.9% from 2022 to 2031. The introduction of innovative cruise design concepts, new ship lengths, new and more exotic destinations around the globe, and new on-board and on-shore activities and themes drive the growth of the segment.
The absolute luxury segment to achieve a noteworthy growth during the forecast period
Based on types of traveler, the absolute luxury segment held the largest share of more than half of the global luxury travel market in 2021 and is expected to exhibit the largest revenue growth during the forecast period. The same segment would grow at the fastest CAGR of 9.0% in 2031. The absolute luxury segment comprises households with $30+ million net worth, with annual spending of over $230 billion on luxury goods, and account for over 20% of all luxury purchases, including travel. Travel is the second most popular pastime among high-budget tourists.
Europe to garner the largest revenue by 2031
Based on region, the market in Europe was the largest in 2021, accounting for more than one-third of the global luxury travel market and dominate in terms of revenue during the forecast period. Growth in inclination of people toward unique and exotic holiday experiences, rise in travel expenditure by middle & upper class people, and growing interest of people to spend more time with family are some of the factors that propel the growth of the Europe luxury travel market. However, the market in Asia-Pacific is likely to show the fastest CAGR of 11.1% during the forecast period. Wellness tourism and medical tourism are growing in developed countries in Asia-Pacific due to the continuous increasing rate of double-income households, leading to higher purchasing power and relatively low volatility in disposable income in the region. The growth of Southeast Asia, namely Malaysia, Indonesia and Vietnam, is also projected to fuel the Asia-Pacific luxury travel market.
