What cost-of-living crisis? Luxury travel is booming and set to grow further

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What cost-of-living crisis? Luxury travel is booming and set to grow further

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About 10 years ago, while working at Badrutt’s Palace Hotel in the Swiss town of St Moritz, I was shocked to learn a guest once

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be brought in to deliver a birthday gift to his wife. And the hotel made it happen, squeezing the elephant into the lobby.

This over-the-top gesture symbolized what luxury travel once meant: wealth and power, expressed through grand displays. Think millionaires and billionaires in lavish suites and on private yachts, enjoying

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most of us would never dream of, let alone actually ask for.

Consulting group McKinsey defines the luxury traveler as someone prepared to spend

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on accommodation. But luxury tourism is evolving. Thanks to demographic shifts, sustainability concerns, and a post-pandemic desire for connection, luxury travel has become more personal and meaningful. And luxury travelers these days aren’t always the super-rich elites.

Despite the cost-of-living crisis, luxury travel is

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. So, what’s driving this growth and how is luxury travel changing?

A trillion dollar industry

The luxury travel sector has shown remarkable resilience, even during economic downturns and the COVID pandemic. Globally, it is projected to grow from

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in 2024 to $2.2 trillion by 2030.

The Asia-Pacific region is leading the surge at a compound annual growth rate of

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(a way of measuring growth that assumes profits are reinvested) from 2024 to 2030.

In Australia, the trend is similar: the luxury travel market generated US$37.4 billion in 2023 and is forecast to reach

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by 2032.

This growth is driven not just by affluence among the wealthy but by younger travelers. As

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points out, these travelers are often non-millionaires who may not earn enormous salaries or even own their own homes—but are willing to pay top dollar for meaningful experiences.

And some are splurging on trips to make up for time and opportunities lost due to the pandemic—a trend industry experts sometimes refer to as “revenge” and “

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” travel. As one

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observer put it:

“We’re seeing travel at all costs, where people are determined to have the experience they want, regardless of what that price is.”

Many consumers are

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experiences over other discretionary items, including luxury goods.

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Luxury can have many meanings

Today’s luxury travel isn’t just about extravagance; it can also include forking out for meaningful experiences. Luxury travelers are willing to pay up for holidays that promise

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with people and places.

It can mean access to something rare, like an uncrowded natural environment or an authentic cultural experience that feels deeply personal.

It can also come from

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—like appreciating the nuances of a rare bottle of wine, or touring a place with an expert or celebrity guide who has been there many times before.

Where it was once defined by price and status symbols, luxury travel today is about

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(on social media and in real life) and experiences that align with personal values.

Wellness, adventure and the digital detox

In my 17 years of working in and researching luxury travel, I have seen a lot of different luxury holidaymakers. Everything from humble retirees relishing the rewards of their hard work to VIP celebrities who send 32 pages of requests before even stepping foot in the hotel.

While older high-net-worth individuals from North America and Europe remain a significant demographic, a growing proportion of luxury travelers are millennials, Gen Z, and tourists from

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like Asia and the Middle East.

Traditional hallmarks of luxury travel—like presidential suites and private islands—are still popular among high-net-worth individuals.

But a growing number of travelers seek cultural experiences, adventure, and

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trips.

These travelers are opting for

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and less-visited destinations to avoid crowds, and may be more vocal about sustainable tourism.

The future of luxury travel lies in its ability to adapt to evolving consumer values.

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retreats,

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travel (including by train), and

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experiences are becoming central to the luxury travel narrative.

In a hyper-connected world, luxury travel marketing is now often linked with the idea of a

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. The chance to disconnect and fully immerse in the moment has become a modern indulgence.

Luxury travelers today use their trips to

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, and to

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, their relationships, and themselves.

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The Conversation

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Citation:
What cost-of-living crisis? Luxury travel is booming and set to grow further (2024, December 31)
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#costofliving #crisis #Luxury #travel #booming #set #grow

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