the global luxury travel consumer · the global luxury travel consumer | 2 authors: david benady...

The Global Luxury Travel Consumer

By David Benady and Alex Hadwick

www.eyefortravel.com The Global luxury Travel Consumer | 2

authors: David Benady and Alex Hadwick, Head of Research, EyeforTravel Ltd.

DisclaimerThe information and opinions in this report were prepared by EyeforTravel Ltd and its partners. EyeforTravel Ltd has no obligation to tell you when opinions or information in this report change. EyeforTravel Ltd makes every effort to use reliable, comprehensive information, but we make no representation that it is accurate or complete. In no event shall EyeforTravel Ltd and its partners be liable for any damages, losses, expenses, loss of data, loss of opportunity or profit caused by the use of the material or contents of this report. No part of this document may be distributed, resold, copied or adapted without EyeforTravel’s prior written permission.

© FC Business Intelligence Ltd ® 2017

The Global Luxury Travel Consumer


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About EyeforTravel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Our Values. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Our Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 EyeforTravel in Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Global luxury Travel Market Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Key Luxury Travel Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Luxury Consumer Booking Patterns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 The Value of Luxury Travel Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Trends in Luxury Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Global luxury Travel Market Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 1.1 Global market value and historical growth rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.2 Forecasted growth rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 Key Luxury Travel Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.1 Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.1.1 Western Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.1.2 Emerging Europe and Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 2.2 Asia-Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 2.2.1 China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 2.2.2 Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 2.2.3 Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 2.2.4 South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 2.2.5 India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 2.3 Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 2.3.1 US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 2.3.2 Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 2.3.3 Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 2.4 Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 Luxury Consumer Booking Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 3.1 Lead Times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 3.2 Devices Used During Journey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 3.3 Reaching the Luxury Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 The Value of Luxury Travel Consumers and Their Spending Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 4.1 Trips Taken and Planned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 4.2 The Value of Luxury Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 4.3 Luxury Consumer Key Spending Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 4.2.1 What do Luxury Consumers Value Most When It Comes to Travel? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515 Trends in Luxury Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 5.1 Meeting People and Telling a Story . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 5.2 Asia as the Engine of Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 5.3 Generational Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 546 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

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Figure 1: Worldwide Luxury Market Value Estimate 2016 (EUR billion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Figure 2: Year-on-Year Growth in the Luxury Hospitality Market 2010-2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Figure 3: Estimated Compound Annual Growth Rate in Travel by Region from 2015 to 2025. . . . . . . . . . . . . . 20Figure 4: Top 5 Tourism Markets by Spending (USD billions). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Figure 5: London Luxury Hotel Conversion Rates and Transaction Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Figure 6: Russian Travel Destinations in Europe as of Q2 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Figure 7: High Growth Destinations for Russian Premium Travel in H1 2017

Through Aviasales Metasearch Engine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Figure 8: Spending Per Trip in China – Domestic Versus International Trips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Figure 9: Chinese HNWI Visits Abroad 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Figure 10: Japan HNWI wealth change 2012-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Figure 11: Japan dollar millionaires from 2006 to 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Figure 12: South Korea HNWI wealth change 2011-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Figure 13: Growth in Outbound Journeys from South Korea, 2010-2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Figure 14: India Dollar Millionaires from 2006 to 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Figure 15: US dollar millionaires from 2006 to 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Figure 16: Brazilian HNWI wealth change 2012-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Figure 17: Change in 2016 Outbound Travel to World Regions from Brazil

Across First Eight Months of 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Figure 18: Brazilian Arrivals to Florida 2012-2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Figure 19: Lead Times for Accommodation Booking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Figure 20: Lead Times for Transport Booking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Figure 21: Lead Times for Tours and Activities Bookings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Figure 22: Research Devices Used to Plan Trip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Figure 23: Devices Used to Book Accommodation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Figure 24: Devices Used to Book Flights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Figure 25: Number of Trips Taken Per Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Figure 26: Number of Trips Planned Over 12 months - Luxury Consumers Versus Rest of Population . . . . . . 47Figure 27: Planned Domestic and International Trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Figure 28: Average Spending Per Trip in US Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Figure 29: Annual Value of Consumers Per Year in US Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Figure 30: Vacation Activities Participated in by Top 1% of US Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Figure 31: Vacation Activities Enjoyed by US Luxury Travel Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Figure 32: Chinese Millennial Luxury Traveller Motivations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Figure 33: Alternative Accommodation Options Considered Millennial Chinese Luxury Consumers . . . . . . . 55

Table 1: London Luxury Hotel Conversion Rates and Transaction Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Table 2: Russian Travel Destinations in Europe as of Q2 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Table 3: High Growth Destinations for Russian Premium Travel in H1 2017

Through Aviasales Metasearch Engine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Table 4: Japan HNWI wealth change 2012-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Table 5: Vacation Activities Participated in by Top 1% of US Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

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We would like to thank Abercrombie & Kent’s marketing director Lisa Warner, Maria Pajares, managing director of

luxury hotel marketing agency Mason Rose and Richard Frampton, a travel manager at Hurlingham Travel Services

for their contributions to this report.

We are grateful to all of the data sources utilized for this report and to TapResearch for conducting our consumer

surveys.

Acknowledgements

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The global luxury goods and services market is in a state of flux. In 2016, spending across the entire of the luxury

goods market was weaker than it has been in recent years, with consumers pulling back from a variety of high-end

personal luxury goods. On the flipside, spending by luxury goods consumers into travel and tourism continued to

grow unabated and the luxury hospitality market has almost doubled since 2010. This points to a wider trend that

is being reflected across the travel market but particularly so at the top-end, as luxury consumers are often at the

leading edge of trends. Big-spenders are increasingly shifting their disposable incomes to experiential spending.

No-longer is it enough to have the expensive-watch or handbag. Now capital is going cultural.

Increasingly the luxury travellers is looking for unique experiences. We saw this in our research when we noted that

luxury consumers are more relaxed about booking their flights and accommodation closer to the date of travel but

this behavior reverses when it comes to tours and activities. Luxury consumers book tours and activites around a

month in advance of travelling but normal consumers tend to book while travelling or in the week before departing,

demonstrating that luxury travellers are booking more complex high-end itineraries. This is reflective of the luxury

traveller’s will to search out authenticity, exclusiveness and excitement on their vacation.

Travel brands cannot afford to ignore the changing habits of this hugely influential group. Already, luxury consumers

take trips at twice the rate of the general population and spend more than six times as much per annum. As

economic gains continue to accrue at the upper end of the spectrum in the West and create huge growth in

wealthy individuals in developing economies, particulaly in Asia-Pacific, their spending power is expanding

exponentially. When this is combined with these consumers’ greater emphasis on travel then the stage is set for a

major expansion in this part of the market.

2017 is beating the more downbeat forecasts for the year thus far, with previously troubled markets, such as Russia,

Brazil, and Canada returning to tentative growth, US outbound continuing strongly, Europe seeing its best economic

performance for a number of years and Japan’s luxury market defying expectations and booming.

However, it won’t be easy to win over the luxury travel consumer. Already discerning, the emphasis on the

experience will mean that brands will need to be precise in their details and impeccable in their service. This will

need to carry over to the technology they deploy, as we have found that luxury consumers are smartphone savvy

and multi-channel in their approach. Then there is the growing number of alternative accommodations, many of

which promise the ‘authentic’ experience luxury travellers crave, and will push more competition in the market.

So, read on to learn about the luxury consumer, their changing habits, and how best to capture them. We hope that

this research is of interest and use to you and your organization and do not hesitate to get in touch with questions

or research suggestions.

Alex Hadwick

Head of Research, EyeforTravel Ltd

Introduction

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Global luxury Travel market overview■■ Luxury travel is flourishing. The value of the global

luxury hospitality market has almost doubled over

the past six years, rising to USD183 billion in 2016

from USD93 billion in 2010. The highest growth

spikes came in 2012 with 19% growth and in 2015

with 17.3% growth.

■■ Although growth in the luxury hospitality market

Executive Summary

CanadaA fall in the Canadian dollar and recession hit luxury travel with assets held by Canadian HNWIs falling in 2015. However, the market is back to growing ways with outbound journeys up 4.9% in H1 2017

UKUK outbound luxury travel is suffering as the pound nears decade lows, leaving the market the worst performing for HNWI growth in 2016. However, inbound luxury travel is booming, with a 26% rise in sales to overseas tourists in the opening seven months of 2017

Western EuropeEurozone consumer confidence is at a decade-long highs, with German consumer confidence at post-reunification record levels. The consumer environment and growth in long-haul luxury traveller arrivals into the area, particularly from China and the US is pushing the region to be one of 2017’s top-performing luxury travel markets

Poland Poland’s luxury goods market increased by 15% from 2015 to 2016 and hotels and spas are expected to grow by a CAGR of 5.3% between 2016 and 2020.

South KoreaSouth Korean outbound luxury travel is booming but inbound is suffering in the current political climate, with Chinese arrivals plummeting 46.5% in the first seven months of 2017

RussiaAfter several years of decline, Russia’s outbound luxury travel market returned to growth in late 2016 and into 2017. The Caucasus, China, Thailand, and Western Europe have all seen excellent growth

ChinaChinese luxury traveller habits are changing. Although they spend more per trip than any other country, shopping is falling out of favour to around a third of trip budgets in 2017, and experiences are becoming more important.

IndiaIndia is expected to be the fastest growing luxury travel market between 2015 and 2025, although from a low base: there were just 67,800 dollar millionaires in 2006 but there is expected to be 660,800 millionaires by 2026

USThe US is home to more millionaires than the next six countries combined and the luxury travel market is still growing with luxury travel agents optimistic about 2017 and 2018 - 45% expect double-digit sales growth

BrazilAlthough still a fragile economy, there are signs of a tentative return to growth in the Brazilian luxury travel market: ForwardKeys data found international flight bookings were up 18.8% in H1 2017

JapanAlthough it may seem like a market in decline, it was the fastest growing G7 economy in Q2 2017 and Japan has the second highest number of millionaires in the world, with wealth concentrated among older Japanese consumers. From 2015 to 2016 the percentage of Japanese luxury consumers agreeing with the statement “I am more likely to travel abroad for vacation” increased from 49% to 60%


with income expectations at a point not seen

in post-Reunification Germany, and business

confidence is at similarly record highs

■■ Against the euro the British pound neared lows not

seen since the Financial Crisis in August 2017 before

rebounding.

■■ Credit Suisse estimates that the USD1.5 trillion was

wiped from household wealth as a consequence of

the Brexit vote and it was the economy that lost the

most millionaires in their study.

■■ Deloitte’s indicators of UK consumer confidence and

discretionary spending in Q1 2017 were broadly

negative and this continued into Q2. However,

vacations were one of only two categories to see a

quarter on quarter improvement.

■■ EyeforTravel’s expects UK outbound journeys to

experience much diminished growth in 2017, up to a

maximum of +2%.

■■ The flipside of the pound’s decline is Britain is

experiencing a bumper year for international arrivals.

According to research by Premier Tax Free, the UK

outperformed Western European counterparts,

with a rise of 26% in sales to overseas tourists in the

opening seven months of 2017.

■■ Only just behind were Italy and Spain, reporting

increases of 25% and 23%, respectively, and France

saw a turnaround at 16% growth.

■■ The effect of terrorism on tourism has also

faded. London luxury hotel conversion rates and

transaction values were unaffected by a terrorist

attack on Westminster Bridge in March 2017.

■■ In the long-term the market is expected to achieve

a CAGR of 6.4% even though both Knight Frank and

Credit Suisse expect the region to come bottom for

growth in the number of millionaires in percentage

terms.

emerging europe and russia■■ Amadeus expects the ‘Emerging Europe’ region to

be the second-fastest growing luxury market out to

2025.

■■ Leading growth markets in this region are the Baltic

States, Hungary, Slovakia and Poland

■■ Poland was the only EU economy to avoid

recession and has seen the second longest period

slowed substantially to 4% in 2016, 2017 appears

to have seen a rebound across all luxury travel as

wealthy Chinese consumers focus back on travel,

Japan experiences high wealth creation, Brazil and

Russia come back out of recession, and the Eurozone

and North America grow strongly.

■■ Whilst the total global population expanded around

20% from 2000 to 2015, the number of luxury

consumers grew by 150% over the period, to 350

million according to Bain.

■■ The total number of billionaires stood at 2,024 in

2016, a 45% rise in the past decade.

■■ IPK International estimates that luxury travel grew

by 48% from 2010 to 2014 compared to 24% for the

remaining sectors of the travel and tourism industry.

■■ Amadeus expects a Compound Annual Growth Rate

(CAGR) of 6.2% luxury travel versus overall growth

rate of 4.8% from 2015 to 2025.

■■ Allied Market Research also projects a very similar

estimate of a CAGR of 6.4% from 2016 to 2022 for the

sector.

■■ However, there are some near term risks, with

equity values inflated. US stocks valuations have

only been higher in 1929 and 1999 and a Bank of

America Merrill Lynch Fund Manager Survey from

mid-2017 found that “a net 46% of respondents to

the latest consider stocks ‘overvalued’, the biggest

gap ever recorded in the survey, which dates to the

mid-1990s.”

key luxury Travel marketswestern europe■■ Western Europe is one of the best performing

all-round luxury markets in 2017, particularly from an

inbound perspective, with all key markets reporting

arrival growth.

■■ Wealth and purchasing power in the UK has been hit

as the pound reels from the effects of Brexit, and is

the main negative spot in the region.

■■ France and Germany are growing at their

strongest rates since 2011, Italy since 2010, and the

Netherlands since 2007

■■ The euro has strengthened against 26 of its 31 major

peers

■■ German consumer confidence is at a record,

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more than 5% at the time of writing and Chinese

consumers look to be back on the spending spree

after under-trend growth in 2016.

■■ A very large proportion of the more than 140 million

outbound journeys that will be made from China in

2017 are by luxury travellers as the market is still at a

relatively early stage in its development.

■■ This can be seen in spending per trip data.

EyeforTravel 2017 consumer survey data found

that the median reported spending category for

outbound trips is between RMB20,000 to RMB39,999

per household, equivalent to approximately

USD2,900 to USD5,000 and a 2017 Oliver Wyman

survey from early 2017 found that spending per trip

was of a similar level, at RMB20,317.

■■ Shopping is falling in importance for Chinese luxury

consumers and adventure and experiences are

growing. Whilst total spending per trip rose 3.5%

from 2016 to 2017, the amount of budget allocated

to shopping fell from 41% to 33% according to Oliver

Wyman. Hotels.com noted shopping as the prime

trip motivation falling to one-third of the sample in

2017 from more than two-thirds in 2016. A survey by

the Financial Times found 37% of trip spending went

to shopping in 2017, down from 47% in 2013.

■■ Europe is the top destination for Chinese luxury

travellers currently and is expected to continue to

be so in the near future, with France, Italy and the

UK the leading destinations, and Spain experiencing

very strong growth in 2017.

■■ Other key destinations are South East Asia, Australia,

Japan, the US, and South Korea, although the latter

two have not performed well for Chinese tourists in

2017.

■■ The ETC noted double-digit growth in arrivals or

overnight stays across all bar five out of the 29

European countries that reported data for Chinese

consumers. Macau reported a return to increased

gaming revenues across 2016 and into 2017 and a

5% increase in visitors in Q1 2017

■■ Long term prospects in the Chinese luxury travel

market appear excellent as demographics and

wealth growth support the industry. Credit Suisse

predicts that the number of millionaires will increase

by 73% between 2016 and 2021.

of uninterrupted economic growth in the Western

world since 1945.

■■ KPMG estimates that the number of affluent

consumers in Poland reached 1 million in 2016

and that their incomes will increase by nearly 30%

between 2016 and 2019, pushing the luxury goods

market to expand by 27% from 2016 to 2020 and

hotels and spas to a CAGR of 5.3% over the period.

■■ Russia saw strong growth in its luxury tourism market

and outbound travel generally up until a peak in

2013 with some 40 million outbound trips.

■■ The luxury travel market was helped by Russian

having the highest wealth disparity of any major

economic power, with the top decile of wealth-

holders owning 89% of all household wealth.

■■ Post-2013 the luxury travel market was hit by major

declines in the value of the rouble, worsening a

recession that lasted for seven quarters until late 2016.

■■ Growth in luxury spending had returned in H2 2016.

■■ Russian shopping in Italy grew by 3% in 2016, the

London Luxury Quarter reported that spending in

Q1 2017 by Russians grew by 88%, and Worldpay

note that Russian spending in June 2017 in the UK

increased by 25%

■■ The European Travel Commission (ETC) noted in its

Q2 2017 report a broad-based recovery of Russian

travellers across the destinations it measures, with

Turkey growing by 88%.

■■ The domestic luxury travel market has also

benefitted strongly from the downturn. Contactlab

estimates that foreign spending as a proportion of

Russian luxury consumers overall travel budgets was

nearly 90% in 2014 but this share fell precipitously in

2015 to around 65%. Aviasales recorded an increase

of 4% in their site’s domestic flight bookings in H1

2017.

■■ Key growth destinations Aviasales has measured for

Russian premium travel in 2017 are the Caucasus

(Armenia + 240%, Azerbaijan, +92%), China (161%),

Thailand (+91%) and Western Europe (Germany

+122%, Italy +121%, Spain +173%).

China■■ The yuan has consistently increased in value against

the dollar since the start of the year, rising by

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agreeing with the statement “I am more likely to

travel abroad for vacation” increased from 49% to

60%.

■■ The growth in luxury travel is skewed toward older

Japanese consumers, who have benefited from

years of company employment, higher rates of

home ownership, generous pensions and if they

have worked for the same company throughout, an

average final bonus of more than USD200,000

■■ More than 80% of Japanese travellers report

spending their last vacation inside the country.

■■ Internationally, Japanese luxury consumers principally

travel to the US, Western European (particularly France,

Germany, Italy, and Spain), and developed countries

in Asia. According to Affluential Hawaii topped the list

of destinations that high-end Japanese travellers have

visited in the past 12 months up to May 2016 and was

also the top destination they were planning to visit in

the following 12 months.

■■ Japan’s cruise industry is booming, with Japanese

passengers rising 12% in 2016.

australia■■ Australia and New Zealand already have a very

mature luxury travel market and so is expected to

have one of the lower growing regional markets.

However, Australian consumers are noted as having

some of the highest average spends in the world

already.

■■ Australia as an inbound luxury travel market will also

benefit from the growing Asia-Pacific market, with

EyeforTravel noting that Chinese consumers put

Australia as the destination they would most like to

visit in 2017.

south korea■■ South Korea is seeing a booming outbound luxury

travel market, but a struggling inbound one in 2017.

■■ The luxury market is supported by strong wealth

growth. CapGemini finds that from 2011 to 2015 the

wealth held by South Korean HNWIs increased by

39% and Credit Suisse expects the overall number of

dollar millionaires to grow by 41% by 2021.

■■ The percentage of South Korean luxury travellers that

agreed with the statement that they would travel

■■ The post 90s generation spend more on

international travel than any other generation as

a proportion of income at 35%. By comparison

post 80s and 90s travellers spend 27%. EyeforTravel

research found that ages 36-55 spent the most but

18 to 35 year olds were only just behind despite

lower incomes.

Japan■■ Although on first glance it seems a poor market for

investment Japan is an excellent source of luxury

travellers, with recent wealth growth bolstering

market dynamics. Japan remains an extremely

affluent society and this wealth is more evenly

distributed than in comparable Western economies,

with the top 1% earning salaries of USD240,000

compared to USD1.2m in the US

■■ CapGemini estimates that the wealth of Japanese

HNWIs has been rising since 2011. In the last

available year for data – 2015 – their US dollar wealth

jumped by 11.4% (CapGemini, 2017). Knight Frank

estimates that in the decade preceding 2016 the

number of dollar millionaires rose by 35% to 1.166

million and this will further rise to 1.516 million by

2026, an increase of 30%.

■■ Japan is in its best period of expansion since the turn

of the Millennium, with more than six consecutive

quarters of growth and was the top-performing G7

economy in Q2 2017, with private consumption and

domestic demand growing 0.9% and 1.3% in the

period, respectively. Japanese unemployment is at a

23-year low and the ratio of open jobs to applicants

at a 43 year high.

■■ Whilst Japan has less UHNWIs, there is a broad base

of highly affluent consumers. So much so that the

country has the second highest number of dollar

millionaires in liquid assets after the US according

to both Knight Frank and CapGemini, with the latter

reckoning that the nation has more millionaires than

Germany and China combined.

■■ Growing wealth has pushed Japanese outbound

travel back into growth, expanding 5.6% in 2016 and

6.3% across H1 2017

■■ Affluential’s research noted that from 2015 to 2016

the percentage of Japanese luxury consumers

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the statements “I mainly buy luxury brands when

travelling” and “I prefer travel destinations where I can

buy luxury products”, 74% and 79% agreed, growing

from 61% and 62% in 2015. This was the highest

rate of agreement out of the eight Asian economies

studied by Affluential.

■■ 92% of Indian luxury travellers reported that they

booked online and 76% on smartphones.

us ■■ Knight Frank estimates that the US had nearly 4.4

million individuals with more than USD1 million in

liquid assets in 2016, which is more than the next

six countries combined on their list. Credit Suisse

estimates that the US has 41% of the world’s dollar

millionaires and this increases for Ultra-High Net

Worth (UNHW) individuals, where the US is home to

52% of the global total.

■■ Credit Suisse estimates that the number of asset

dollar millionaires will grow by 33% from 2016 to

2021.

■■ The wealthiest 5% of US households take an average

of 14.3 trips per year, about half for business and

half for leisure and spend USD3,115 per person per

vacation. This compares to some 4.8 trips a year on

average taken by all US travellers.

■■ The higher a household disposable income, the

more likely they are to travel to Western European

destinations, with Italy, France, the UK and Germany

the main points of travel.

■■ US North East has the greatest concentration of

wealth in the country. According to Equifax, the

states with the highest total income per household

are, in order, Connecticut, Delaware, Virginia, New

Jersey, and Maryland, and the states with highest

total assets per household are Connecticut, New

Jersey, Massachusetts, Washington D.C., and

California.

■■ The luxury travel market is performing well, which is

in contrast to the US personal goods luxury market

which Bain predicts will have a rough 2017 and

defies the relatively poor performance from the

dollar across the first half of 2017.

■■ A survey of luxury travel management firms by

Strategic Vision in February 2017, reported that 58%

more rose to 79% in 2016 from 71% in 2015

■■ Overall outbound journeys from South Korea grew

by nearly 19% year-on-year in H1 2017.

■■ In terms of trends and reaching the South Korean

luxury consumer, recent years have been marked by

the rise of the independent South Korean traveller

and the fall in group travel

■■ Generally, the average South Korean traveller and the

luxury traveller tends to favour regional destinations,

with Japan top. South Koreans account for more

than a fifth of arrivals to Japan.

■■ Until recently the country’s inbound luxury travel

market was booming, heavily boosted by the strong

retail environment, with South Korean duty free sales

to foreign tourists increasing approximately 40% in

value in 2016.

■■ However, international tensions have hit the market.

ForwardKeys data shows a decrease in international

passengers staying four to eight nights of -24% in

the first half of 2017 and a projected -26% in the

second. Chinese arrivals were down 46.5% in the first

seven months of 2017.

india■■ India is expected to be the fastest growing luxury

market between 2015 and 2025 in Amadeus’ study,

with a CAGR of 12.8% across the period.

■■ Part of this growth is the fact that India was coming

from a low base, with an estimated 67,800 dollar

millionaires in 2006 but this will explode to 660,800

millionaires by 2026, making the country the sixth

biggest home of millionaires in the world by 2026,

according to Knight Frank.

■■ Destinations in Western Europe, the United Arab

Emirates, the Maldives and the Seychelles are

popular among luxury Indian travellers. The US is also

on the rise, with Affluential finding that Los Angeles

was the top destination noted by their respondents

in the coming 12 months.

■■ The domestic market is also expanding rapidly,

with IATA noting that domestic Revenue Passenger

Kilometers (RPKs) grew by 14.6% in 12 months up to

March 2017

■■ Indian luxury travellers are very keen shoppers:

When asked in 2016 whether they agree with

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• TheBrazilianCentralBankalsonotedthat

expenditure on international travel grew by 10.1% in

June 2017 compared to the same month in 2016

Canada■■ Canadians are some of the highest per capita

spenders on travel in the world. However, a

recession in 2015 and intermittent growth in 2016

hit Canadians spending power and consumer

confidence, including at the top, and the luxury

travel market has only recently begun to recover

■■ The number of HNWIs in Canada decreased by 3.2%

in 2015 and their wealth decreased by 2.8%.

■■ From early January 2013 to early January 2016 the

Canadian dollar lost 28% of its value against the

dollar.

■■ The number of Canadians returning after one or

more nights outside the country decreased 2.7%

from 2015 to 2016, although it appears that the

travel to the US and the bottom of the market saw

the brunt of this as the number returning from

journeys outside the US grew by 3.7%.

■■ The Canadian economy is expected to be one of the

leading G20 nations in 2017, with growth across the

year expected to be 2.7%,

■■ Canadian international journeys increased by 4.9%

overall and, excluding the US, 4.7% in the first five

months of 2017 (Statistics Canada, 2017). Destination

Canada reported that domestic expenditures rose by

6.6% in Q1 2017.

middle east■■ Oil rich Gulf Cooperation Council states such as Saudi

Arabia, Kuwait, Qatar and the UAE have contributed

strongly to global luxury travel in recent years.

However, Amadeus estimates the general travel

market for Kuwait, Qatar and UAE will grow by 4.4%

while luxury travel overall across the Middle East

region will grow by 4.5% - one of the lower rates.

■■ Knight Frank notes that from 2015 to 2016 the

number of millionaires failed to grow.

■■ This is reflective of the fact that any of these

countries already have extremely high wealth levels

and living standard, such as Qatar, and the transition

the world is making away from fossil fuels.

of firms’ clients are optimistic about domestic travel,

44% saw no change and just 2% were “cautious”.

■■ A 2017 TMR survey of more than 650 U.S. and

Canadian travel agents specializing in luxury

travel found that 44% had seen double-digit sales

increases in sales, 25% experienced 25% increases,

and 12% by more than 50% in the previous year. In

the 12 months following the survey, 45% expected

double-digit growth.

■■ The Bureau of Economic Analysis and the National

Travel and Tourism Office (NTTO) reports that

spending by US travellers rose 6.3% in H1 2017 and

air departures from the US were up 8% in H1 2017

according to ForwardKeys.

■■ The UK in particular has seen excellent performance

across 2017 from US tourists, with H1 2017 seeing a

25% growth in arrivals from North America.

■■ Amadeus expects this already enormous luxury

market to continue growing, and growing ahead of

the overall travel market, at more than 6% per year

brazil■■ Brazil’s luxury travel market has only just started to

come out of a painful and steep decline following a

recession and fall in the value of the Brazilian real.

■■ CapGemini notes that the wealth held by HNWIs fell

every year between 2012 and 2015.

■■ Outbound travel from Brazil collapsed in 2016, falling

15% in the first eight months of 2016 according to

the World Travel Monitor.

■■ As the top destination for Brazilian luxury outbound

travel, the US has been hit particularly badly. From

2013 to 2014 Brazilian arrivals to Florida increased

by nearly 37% but then fell -10.1% YoY in 2015 and

28.7% in 2016.

■■ The luxury domestic travel market has benefited –

Expedia reported a YoY increase of more than 55% in

the country’s luxury segment 2016.

■■ There are signs of a return to growth for Brazil’s

luxury travel market in 2017:

• DomesticRPKsincreasedinMarch2017breakinga

run of 19 consecutive months of falling demand and

increased throughout the remainder of H1 2017.

• Internationalflightbookingsrecordedby

ForwardKeys were up 18.8% in H1 2017.

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between the two populations. Nearly 36% of

luxury consumers use the mobile to research their

trips, compared to 32% for non-luxury consumers,

demonstrating that luxury travel consumers are less

likely to switch devices.

■■ Non-luxury consumers are twice as likely to book

flights and accommodation through a “face-to-face”

travel agent and more likely to use a call center

■■ Lisa Warner at Abercrombie and Kent says: “The key

to marketing to the luxury traveller is a bespoke,

integrated and consistent approach – a consistent

message, integrated across all channels that clearly

communicates how we can improve their quality of

life.”

■■ Hotels are linking up with influencers on Instagram.

Beautiful Destinations (8.4 million Instagram

followers), Luxury World Traveller (2.6 million

followers), and OnlyForLuxury (2.4 million followers)

all provide sponsorship packages. Luxury brands

such as Aman Resorts has a widely-followed account

as does Mr & Mrs Smith, an agent for boutique

hotels.

■■ WeChat, which is critical for reaching Chinese

luxury consumers, offers customization of pages

and additional functionality. Luxury travel brands

can control their image on the platform and reach

the consumer with targeted information when

consumers are researching and also when they are

travelling by tapping into location data.

■■ WeChat users can book in-store consultations

directly from the app, which is important given that

luxury travel agents still remain important at the top

end of the market.

The value of luxury Travel Consumers■■ Luxury consumers take an average of 5.6 leisure trips

per year against 2.8 a year for the rest of the sample.

For the former, these are equally split between

domestic trips and international trips, at an average

of 2.8 for both. Meanwhile, the rest of the population,

which has to be more conscious of budget, is slightly

more predisposed to domestic travel, taking an

average of 1.3 international trips and 1.5 trips within

their own country.

■■ Luxury travellers also plan twice as many trips than

■■ Instead greater growth in the luxury travel market

will be found in other Middle Eastern countries,

though from a lower base. The CAGR for emerging

nations Lebanon, Iran, Jordan and Egypt is 8.9%.

luxury Consumer booking Patterns■■ Luxury consumers book accommodation and

transportation later than average consumers:

• 54%ofluxuryconsumersbookbetweenoneweek

and four weeks from their date of travel, as opposed

to 33.5% for normal travellers.

• 21.4%ofnon-luxuryconsumersprefertobook

between two and four months from departure, as

opposed to 15.3% of luxury travellers, and 12% chose

to book six months or more compared to 6% of

luxury travellers.

• 54.8%ofluxurytravellersbooktransportation

between one and four weeks before travelling as

opposed to 36.5% of the rest of the sample.

■■ However, when it comes to tours and activities,

interestingly the trend is reversed. More than double

the percentage of non-luxury travellers report that

they book their vacation activities whilst they are

on holiday at 35.8%, compared to just 14% of luxury

travellers. 54.8% of the luxury sample book tours and

activities between one and four weeks before they

depart versus 31.5% of the remainder of our survey

population.

■■ The longer lead times for tours and activities

illustrates the importance luxury consumers put on

their experience, as they book more expensive and

complex itineraries that are more likely to need to be

booked in advance.

■■ Double the rate of non-luxury travel consumers

chose to stay with friends and family on their trip.

■■ Luxury consumers are much more comfortable using

smartphones to book:

• Over30%ofluxuryconsumershavebooked

travel accommodation using their mobile phones

compared to just 13% of standard travellers.

• 30.2%ofluxuryconsumershaveusedtheir

mobiles to book transport compared to 18% of

standard travellers.

■■ When it comes to research, the difference is far

less pronounced with only a very small differential

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properties on social media through words, photos

and videos.

■■ Other brands have had success in bringing guests

together and creating bonds over experiences.

■■ A survey of Chinese millennial luxury travellers

found that they often think of five-star hotels

as standardised and lacking in distinctiveness.

Accommodation suppliers therefore need to have a

distinctive offering.

■■ 42% of respondents to the survey said they wanted

to stay in a hotel with a unique brand style and 40%

wanted an artistic design.

■■ Luxury hotels are increasingly taking heed of

environmental concerns, with some installing solar

panels and becoming carbon neutral as wealthy

millennial travellers like to be socially responsible

travel and to build links between them and local

communities.

■■ Several luxury brands that have opened hotels in key

locations. Italian luxury watch and jewellery brand

Bulgari has hotels in Milan, London and Bali. Armani

has hotels in Dubai and Milan. Versacci has Versacci

Palazzo hotels in Australia and Dubai. Maison

Moschino is a 65-room hotel in Milan

■■ Millennials expect a connected experience during

their luxury trips and use mobile apps as a form of

digital butler.

■■ One of the biggest trends over the coming decade

will be the rapid growth of luxury outbound travel

from Asia. This growth is fuelled mainly by the

top source markets of China, India and Indonesia.

Chinese consumers alone will buy 44% of the

world’s personal luxury goods by 2025 according to

McKinsey.

■■ Asian travellers are increasingly coming from second

tier cities in these nations and are not just spending

on cosmetics, jewellery and fashion, but increasingly

on events and experiences.

■■ American Express reported last year that there had

been a 110% increase in wealthy travellers planning

to use retail agents in 2017 rather than OTAs.

other consumers. 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% of

lower income consumers.

■■ 35.7% of non-luxury consumers plan to vacation

solely in their own country, compared to 16.2% of

luxury travellers. Instead luxury consumers lead

ordinary travellers by just over 26 points when

planning to vacation both internationally and

domestically.

■■ Our survey found that luxury consumers spend

USD5,365 per trip, more than three times more than

the rest of the sample, who spent USD1,690. When

multiplied by the average number of trips taken

each year, luxury consumers spend some USD30,208

per year on holidays while the rest of the sample

spend USD4,732 or, to put it another way, wealthier

consumers outspend standard travellers by over six

times.

■■ This may explain the belief by many in the travel

industry that luxury travel accounts for up to a half of

spending in the entire sector.

Trends in luxury Travel■■ Luxury travellers are pushing further afield to seek

experiences. A survey by Tourism Economics predicts

that globally, long-haul luxury trips will overtake

short distance trips by 2025.

■■ “Luxury travel has evolved from being primarily

about the 5-star glamour and glitz to becoming far

more centred on experiential travel.… The stories

that resonate most amongst the luxury traveller

fraternity are those garnered from local interactions

and authentic experiences that truly enrich their lives

and that of those they are meeting and interacting

with.” Lisa Warner, marketing director at A&K.

■■ Luxury holiday home rental service Thirdhome

has advertised for a “storyteller” to promote its top

exeC

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From the glamour of first class air travel and five-star

hotels to the gruelling challenge of a trek across the

frozen wastes of Antarctica, luxury travel has expanded

to meet almost every conceivable whim and desire and

is in reach of more consumers than ever before.

Global luxury travel, which is often defined as trips

including business and first-class air travel and hotel

stays valued at over EUR500 a night, has boomed in

recent decades as heady financial markets and rapidly-

developing economies have fuelled huge increases in

personal wealth for a lucky few. Luxury travel faced a

downturn following the 2008 financial crash, but has

bounced back and is now set to outstrip the overall

travel market over the next ten years according to

estimates.

Travel operators and hotels looking to increase sales

in the luxury travel market need to keep abreast of

changing consumer behaviour.

Where once luxury was mainly associated with

grandeur, service and overt displays of opulence, many

of today’s affluent tourists seek deeper, more enriching

experiences. There has been a rapid increase in luxury

hotels across the globe. At the same time, emerging

areas such as eco-tourism, adventure holidays,

educational trips and bespoke cultural and culinary

1.

Global luxury Travel Market Overview

Figure 1: Worldwide Luxury Market Value Estimate 2016 (EUR billion)

Worldwide luxury market, 2016E (€billion)

Source: Bain & Company, 2016a

Total 2016E

4%

1,081

Designer furniture

3%

33

Yachts

0%

7

Fine food

4%

46

Luxury cars

8%

438

Luxury cruises

5%

2

Fine art

0%

Growth 2015-16E

39

Luxury hospitality

4%

183

Private jets

-5%

18

Fine wines & spirits

4%

66

Personal luxury goods

-1%

249


become more “outer-directed”, seeking more personally

enriching experiences. This is in line with Maslow’s

Hierarchy of Needs which suggests that as people

become richer, they move beyond the need to show

off their wealth and build their status. They move to the

highest level of the hierarchy, that of self-actualization.

They seek out personal fulfilment through education,

travel and culture. Many of the emerging super-rich of

the past three decades seem to be making this journey.

This benefits luxury travel operators, especially those

among them those offering experience-based trips that

combine adventure, culture and learning with comfort

and service.

Meanwhile, there is a trend towards casualization across

society that is affecting luxury travel, with more relaxed

dress codes and an easy-going approach to service.

According to the Bain report, sales of luxury denim have

exceeded EUR3 billion in 2016 (Bain & Company, 2016a).

1.1 Global market value and historical growth rates

Luxury travel is flourishing. The value of the global

luxury hospitality market has almost doubled over the

past six years, rising to USD183 billion in 2016 from

USD93 billion in 2010. The highest growth spikes came

in 2012 with 19% growth and in 2015 with 17.3%

growth, though this slowed substantially to 4% growth

in 2016.

Crucially, the number of luxury consumers and luxury

spending rates are accelerating ahead of overall

growth rates. Whilst the global population expanded

around 20% from 2000 to 2015, the number of luxury

consumers grew by 150% over the period to 350 million

according to Bain (Financial Times, 2015). Similarly, the

luxury segment of the travel industry is outperforming

the whole. IPK International estimates that luxury travel

grew by 48% from 2010 to 2014 compared to 24% for

the remaining sectors of the travel and tourism industry

(Travel Daily Middle East, 2015). Tourism Economics

data measuring outbound flights found that the luxury

segment -business and first-class flights - grew at a

compound annual growth rate of 4.5% between 2011

and 2015, compared to 4.2% CAGR for overall travel.

vacations are of huge interest to luxury travellers. The

really wealthy can even book a trip into space. Travel

as a form of geographical and personal exploration is

not confined to the back-packer generation. The spirit

of experimentation and discovery extends to the very

richest tourists.

Several trends are working in favour of global luxury

travel. For the swelling numbers of the wealthy, there

has been a marked change in spending patterns. They

have switched away from conspicuous consumption of

luxury goods and instead they have increased spending

on leisure and travel. For many wealthy people, overt

displays of material opulence seem somewhat outdated

and experiences are the new social currency.

This is particularly the case in China, where a transition

appears to be occurring. A crackdown on corruption

in China has led to wealthy business people becoming

more circumspect about showing off their wealth

inside the country for fear of drawing attention to their

activities. High taxes on luxury imports has created a

push factor for Chinese luxury consumers, incentivizing

them to buy goods while travelling (Financial Times,

2015).

Bain & Company’s Luxury Goods Worldwide Market

Study, Fall Winter 2016 shows that spending on

personal luxury goods has been flat for several years but

travel is growing. Between 2015 and 2016, the report

estimates that EUR183 billion was spent worldwide on

luxury hospitality, which represents a 4% rise on the

previous year and fine food spending rose 4% to EUR46

billion. Luxury cruises were up 5% to EUR2 billion. As

the report notes: “Luxury consumption shifted away

from goods towards experiences such as travel and

gastronomy which grew faster than luxury goods by

at least five percentage points. The best performing

categories were luxury cars, hospitality, fine wines and

spirits and fine food.” (Bain & Company, 2016a)

While the freshly-minted millionaires of the past two

decades initially favoured the showy accoutrements

of wealth – diamonds, gold and high fashion couture

– their tastes have developed over recent years to

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This surge in the numbers of the wealthy, and the

ultra-wealth in particular, has triggered an explosive

growth in the building of luxury hotels, the launch of

premium airline services and a trend to innovation in

luxury travel.

For ultra-premium customers, there is a hot new

market in private jet tours. Luxury tour operator

Abercrombie & Kent has offered a chartered Boeing

757 with 50 seats that convert to flat beds. Luxury

hotel group Four Seasons has fitted out the same

aircraft for luxury passengers and has flown it around

the world using its hotels as stopping off points.

Crystal Luxury Air is teaming up with Peninsula Hotels

and will fly guests around the globe to ten of its top

hotels. The fare is USD159,000 per person (Forbes.com,

2016). Hotels have also branched out into cruise travel.

Ritz-Carlton announced that it is building a series of

three luxury cruise liners that are due to launch from

2019 and several hotels, such as the Wellesley London,

the Four Seasons in the Maldives, and the Borgo Santo

Pietro Tuscany, operate superyachts for their clientele

and charge in the tens of thousands of dollars (The

Telegraph, 2017).

Amadeus expects a Compound Annual Growth Rate

(CAGR) of 6.2% luxury travel versus overall growth rate

of 4.8% from 2015 to 2025 (Amadeus, 2016). Allied

Market Research also projects a very similar estimate of

a CAGR of 6.4% from 2016 to 2022 for the sector (Allied

Market Research, 2016).

This expansion in market size is driven by the growth

in the both the numbers of wealthy households and

also the wealth that they hold. Massive expansion from

developing economies, particularly in Asia-Pacific is

creating the most exciting opportunities, but it is still

worth noting that the wealthiest markets in North

American and European are growing, and are expected

to continue to grow over the next decade.

In 2016, there was a rise in the number of Ultra-High Net

Worth Individuals (UHNWIs) - those with net assets worth

over USD30m - according to the Wealth Report 2017 by

property consultancy Knight Frank. The number of such

wealthy people declined in 2015, but bounced back in

2016 rising by over 6,000 worldwide to 193,490 and the

total number of billionaires rose to 2,024, a 45% rise over

the past decade (Knight Frank, 2017).

Figure 2: Year-on-Year Growth in the Luxury Hospitality Market 2010-2016 (USD Billions)

Source: Bain & Company, 2016b, Bain & Company, 2013

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

$02016

$183

2013

$138

2015

$176

2012

$127

15.1%

18.7%

8.7%

2014

$150

2011

$107

2010

$93

20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

8.7%

17.3%

4.0%

n Value (US$ billions) n Year-on-year percentage change

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individuals are more likely to be investors and hold large

amounts of that wealth in equities.

Negative bond yields, quantitative easing, and negative

or very low interest rates have hurt savers and pushed

them towards riskier assets. The bull market in US

stocks pushed the market to record highs at the time

of writing. A report by investment firm GOM suggested

that US stocks are currently very expensive compared

to historical norms to the point that valuations have

only been higher in 1929 and 1999 (MoneyWeek, 2017).

A Bank of America Merrill Lynch Fund Manager Survey

from mid-2017 found that “a net 46% of respondents

to the latest consider stocks ‘overvalued’, the biggest

gap ever recorded in the survey, which dates to the

mid-1990s.” (CNBC, 2017)

There does appear to be quite a bit of room yet left in

the global economy, with most developed economies

seeing falling unemployment and hitting better

growth rates than in the recent past but the number of

analysts believing we are nearing the end of the current

business cycle is growing. As the Federal Reserve and

European Central Bank look to roll back the ultra-loose

monetary policies of recent years this could mark a shift

and expose both consumers and companies who have

been hiding weaknesses behind cheap credit, although

both banks have been, and will be, cautious in reducing

market support.

In the event that a recession or sustained fall in the value

of equities does occur, it seems the momentum will carry

the global economy through 2017 and push the spectre

of a possible downturn back into 2018. Any recession

is far less likely to be of the size and systemic nature of

the Great Recession following 2008, likely following a

far shallower course in developed markets but also one

in which the return to growth is very weak as fewer

levers are available for policy makers to pull. The Bank

of America Merrill Lynch survey also notes that asset

managers’ cash levels are at multi-year highs, suggesting

that there is an awareness of overvaluation in the market.

However, such trips are way out of reach for many

luxury travellers. The wealthiest 5% of households in the

United States have incomes of USD200,000, while the

wealthiest 1% earn USD400,000 or more, according to

the 2016 Future of Luxury Travel Report by Resonance

(Resonance, 2016). Even these travellers might baulk at

the air trip from Crystal and Peninsula Hotels costing

one third of their annual income. Many travel agents

talk of luxury clients spending between GBP15,000 -

GBP25,000 per family on their trips.

1.2 forecasted growth ratesLuxury travel will continue to boom, especially relative

to the wider travel industry. The gap between the

growth of luxury travel and standard travel is expected

to widen over coming years, according to Tourism

Economics. Luxury travel trips will grow at 6.2% CAGR

between 2015 and 2025 while overall travel will grow at

4.8%, says the company (Amadeus, 2016).

Fuelling the rise of luxury travel will be further growth in

the numbers of wealthy people. Knight Frank estimates

that individuals with net assets worth over USD30m –

so-called “ultra-high net worth individuals” - will grow

by 12% in Europe but by 91% in Asia over the coming

ten years. The number of millionaires in the world could

double between 2006 and 2026. Certain countries will

see “stellar” growth among the richest, says the report.

Vietnam is expected to have the largest expansion

of UHNWIs, rising 170% to 540 over the next decade

while millionaires in the country are expected to climb

2.5 times from 14,300 to 38,600. The global growth of

UHNWIs will be 43% by 2026 (Knight Frank, 2017). In the

long-term, this rising number of wealthy individuals are

likely to drive a strong surge in spending on premium

tourism.

In the medium-term, however, there are some risks

that should be noted. Unusual policy, inflation, and

investment environments appears to be pushing some

asset classes to be overvalued. This is of particular

concern to the luxury travel market as wealthier

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Europe and the United States are responsible for

the bulk of the world’s outbound luxury travel trips

- accounting for 64% of the total, despite making up

only 18% of the world’s population, according to the

Amadeus report on Luxury Travel (Amadeus, 2016).

But the picture is likely to change markedly over

coming decade with the highest growth in luxury travel

coming from emerging markets.

The compound annual growth rate (CAGR) in luxury

travel from North America and Western Europe

between 2015 and 2025 is expected to rise at just

above 6%. However, the greatest growth is expected

from South Asia, mainly India, where luxury travel will

grow by nearly 12% CAGR. Emerging Europe, which

comprises much of Eastern Europe, is expected to grow

by over eight per cent and Southeast Asia will also grow

by eight per cent (Amadeus, 2016).

2.1 europe2.1.1 western europeWestern Europe will continue to be a dominant force

in global luxury travel with large numbers of affluent

outbound consumers travelling in the region and beyond

as well as being home to so many of the top locations for

Key Luxury Travel Markets

Figure 3: Estimated Compound Annual Growth Rate in Travel by Region from 2015 to 2025

Source: Amadeus, 2016

14%

12%

10%

8%

6%

4%

2%

0%North

AmericaNortheast

AsiaEmerging

EuropeNorth AfricaWestern

EuropeMiddle

EastSoutheast

AsiaSouth

AmericaSouth Asia

Oceania

n Overall travel compound growth 2015-2025 n Luxury travel compound growth 2015-2025


economic engine and source of one of the highest

rates of outbound travel in the region and globally.

Consumer confidence is at a record, with income

expectations at a point not seen in post-Reunification

Germany, and business confidence at similar record

highs (DW, 2017).

The UK on the other hand is seeing a period of

instability resonating out from its decision to leave the

European Union. The most obvious effect of this has

been a fall in the value of the pound that has pushed

inflation above average wage growth. Against the euro

the pound is now nearing lows not seen since the

depths of the financial crisis. Consumers of luxury travel

products will be far more insulated from this effect than

other consumers but nonetheless, purchasing power

has been diminished and vacation spending is not

going to be as strong as previous years. Both Knight

Frank and Credit Suisse note that largely due to the

currency fluctuations the UK performed particularly

badly in 2016 for wealth held by residents. Credit Suisse

estimates that the USD1.5 trillion was wiped from

household wealth as a result of the vote and it was the

economy with the most significant loss of wealth per

adult and also in millionaires that they measured (Credit

Suisse, 2016).

It appears there is a continuation of diminishing

confidence and wage and GDP growth for the UK into

2017. Wage growth has been behind inflation across 2017

and this has helped to push the UK to the lowest GDP

luxury travel, such as London and Paris. The largest luxury

travel spenders in this area, broadly in line with overall

travel market sizes, are the British, French, and Germans.

It is a mixed picture for these major economies, with the

Eurozone appearing to be rebounding after difficult years

but the UK is peering into a murkier economic picture.

Eurozone economic indicators are at multi-year highs

across the board. Eurozone confidence hit decade long

highs in the first half of 2017, helped by diminishing

political risk as the support for populist candidates in

core economies faded. Eurozone unemployment fell to

eight-year lows, and GDP growth in several economies

reached multi-year highs, pushing up household incomes

and consumer spending. France and Germany are growing

at their strongest rates since 2011, Italy since 2010, and

the Netherlands since 2007 (Bloomberg, 2017a). This has

pushed Eurozone household consumption spending up

3% YoY in Q1 2017 (ECB, 2017).

The Euro has also made gains against almost every

other major currency, particularly the dollar, with

Bloomberg reporting that: “The euro has strengthened

against 26 of its 31 major peers, with only the Mexican

peso, the Czech koruna, the Polish zloty, the Hungarian

forint and the Swedish krona withstanding its advance,”

giving luxury consumers greater purchasing power

when travelling outside the area (Bloomberg, 2017b).

German consumers are in a particularly buoyant mood,

which is excellent news given its positions as Europe’s

Figure 4: Top 5 Tourism Markets by Spending (USD billions)

World’s top tourism spenders – international tourism expenditure 2016

UNWTO, 2017

0 50 100 150 200 250 300

China

USA

Germany

UK

France

261 USD billion

122 USD billion

81 USD billion

64 USD billion

41 USD billion

US$ billion

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experiencing a bumper year. According to research

by Premier Tax Free, the UK outperformed Western

European counterparts, with a rise of 26% in sales

to overseas tourists in the opening seven months of

2017. Only just behind were Italy and Spain, reported

increases of 25% and 23%, respectively, and France

saw a turnaround at 16% growth (TR Business, 2017a).

Both Spain and Italy are following on from strong

performances in 2016 for luxury travel, the former

boosted by Russian tourists avoiding riskier destinations

and increased German arrivals, and the latter’s luxury

tourism market reportedly growing 7% in 2016 (Il Sole

24 Ore, 2016).

Internal economic and wealth growth and rising

external visitors to the continent is pushing Western

Europe to be one of 2017’s top performers in luxury

travel, which is in stark contrast to 2016. Although

terrorism has presented a consistent risk to major

European markets its effect appears to be diminishing.

France and Belgium suffered in 2016 as a result of

attacks, with long-haul markets particularly affected.

Attacks in Europe across 2017 don’t appear to have

had the same effect. ForwardKeys only found virtually

negligible decreases following attacks in London and

growth in the G7 across H1 2017. Deloitte’s indicators

of consumer confidence and discretionary spending in

Q1 2017 were broadly negative and this continued into

Q2. Although it did note that vacations were one of only

two categories to see a quarter on quarter improvement

(Deloitte, 2017). The UK Office of National Statistics notes

that from April to June 2017, the number of outbound

journeys grew by only 1%. (ONS, 2017).

This broadly accords with EyeforTravel’s expectations

from its 2016-2017 UK Consumer Report, which

expected outbound journeys to experience much

diminished growth in 2017, up to a maximum of

+2% but generally trending towards zero net growth

(EyeforTravel, 2016a). For luxury travel from the UK,

the performance will be slightly better but much will

depend on the value of the pound. It hit an eight-year

low against the euro in August 2017 before recovering

but has performed much better against the dollar,

reaching a post-Brexit high in September, and other

major currencies at the time of writing.

Europe will also continue to benefit from being the

largest market for inbound spend on luxury goods.

The flipside of the pound’s decline is that Britain is

Figure 5: London Luxury Hotel Conversion Rates and Average Values

Source: 80 Days, 2017

£1,800

£1,600

£1,400

£1,200

£1,000

£800

£600

£400

£200

£0Oct 16Sep 16 Feb 17 May 17Jan 17 Apr 17Aug 16Jul 16Jun 16 Dec 16 Mar 17Nov 16

0.50%

0.45%

0.40%

0.35%

0.30%

0.25%

0.20%

0.15%

0.10%

0.05%

0.00%

n Average transaction value (£) n Conversion rate (%)

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in purchasing-power-standard terms has shown

substantial convergence toward the EU average”

(Bloomberg, 2017c). This has led consumers incomes in

these economies to rapidly head towards EU averages

and built new markets of luxury consumers, albeit from

small bases compared to Western Europe.

Poland was the only EU economy to avoid recession

and has seen the longest period of uninterrupted

economic growth in the Western world since 1945.

Since the OECD began to collect consistent data

on Poland in 1995, it has yet to record a recession,

which puts it second only to Australia (Australian

Trade and Investment Commission, 2017). This has

driven a massive expansion in Polish earning and

spending capacity and an increasing number of

affluent consumers who are splashing their cash. KPMG

estimates that the number of affluent consumers in

Poland reached 1 million in 2016 and that their incomes

will increase by nearly 30% between 2016 and 2019

(KPMG, 2016).

The expansion is driving an even higher rate of

discretionary spending on luxury items. KPMG estimates

that the country’s luxury goods market increased by

15% from 2015 to 2016. It expects the market to grow

by a further 27% by 2020. Travel will be a key beneficiary

of this, with hotels and spas experiencing a CAGR of

5.3% in the country between 2016 and 2020 (KPMG,

2016).

Russia also saw strong growth in its luxury tourism

market and outbound travel generally up until a peak in

2013 with some 40 million outbound trips. The majority

of these trips were and continue to be to European

destinations with central and Eastern Europe being the

prime destinations (see Figure 6 and Table 2; ETC, 2017).

Following on from this Russian tourism at all levels has

been buffeted by political and economic disruption.

Manchester in 2017. Data provided to EyeforTravel

by 80 Days, which benchmarks luxury hotels, found

that London hotels have seen stable conversion rates

and transaction values, with the latter rising despite a

terrorist attack on Westminster Bridge in March 2017

(see Figure 5).

In the longer term, Amadeus expects Western Europe

to be one of the stronger performing regional markets,

even as wealth doesn’t grow to the same degree as

other regional markets. They expect the luxury travel

market to achieve a CAGR of 6.4% but both Knight Frank

and Credit Suisse expect the region to come bottom

for growth in the number of millionaires in percentage

terms (Amadeus, 2017). This expectation of growth in

luxury travel speaks to the strength of Europe’s brand,

attractions, luxury travel infrastructure and already

considerable wealth.

2.1.2 emerging europe and russiaCentral and Eastern Europe and Russia have grown

strongly as sources of outbound travel over the past

decade but have diverged in recent years, with several

Eastern European economies becoming star performers,

such as Poland, and Russia facing a turbulent few years.

EU enlargement has benefited Eastern European

economies, leading to increasing wealth and

consequently for Amadeus to predict that the ‘Emerging

Europe’ region to be the second-fastest growing luxury

market out to 2025 (Amadeus, 2016).

Growth in the luxury travel market will be broad-

based with numerous countries growing strongly

in the region over the previous decade and set

to continue to do so, particularly the Baltic States,

Hungary, Slovakia and Poland. The ECB notes that: “The

Baltic states are among the few euro-area countries,

along with Slovakia, in which real GDP per capita

Table 1: London Luxury Hotel Conversion Rates and Transaction Values

Jun-16 Jul-16 aug-16 sep-16 oct-16 nov-16 Dec-16 Jan-17 feb-17 mar-17 apr-17 may-17

Conversion Rate (%) 0.32% 0.35% 0.43% 0.41% 0.43% 0.33% 0.28% 0.41% 0.32% 0.34% 0.34% 0.37%

Average Transaction Value (£) £1,442 £1,447 £1,337 £1,246 £1,193 £1,200 £1,146 £1,130 £1,446 £1,389 £1,431 £1,541

Source: 80 Days, 2017

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signs of recovery in 2017 within the travel market as a

whole and in luxury travel. Consumer confidence has

moved off the floor it reached in 2015 and since has

increased every quarter since Q1 2016 to the time of

writing and national GDP finally stopped contracting

in the latter half of 2016 and is expected to tentatively

grow in 2017.

This has led luxury tourism sales growth to return. The

London Luxury Quarter reported that Russian spending

in Q1 2017 grew by 88%. A spokesperson noted that

“March recorded the highest growth in international tax

free spend by Russian visitors in London Luxury Quarter

in more than two years. The Russian economy, slowly

emerging out of a recession, is believed to have positively

influenced Russian consumers’ spending habits, historically

known for their keen investment in luxury goods (TR

Business, 2017b).” Worldpay note that Russian spending

in June 2017 in the UK increased by 25% (Retail Gazette,

2017). The ETC noted in its Q2 2017 report a broad-based

recovery across the destinations it measures, with Russian

arrivals to Turkey growing by 88% (ETC, 2017).

A report from Exane BNP Paribas Research and

Contactlab published at end-2016 noted that growth

International sanctions, terrorism, recession and a falling

currency have all played a part in diminishing Russian

spending on tourism, with some destinations suffering

particularly badly.

Major declines occurred in 2014 and 2015 following the

imposition of sanctions and the collapse in oil and gas

prices. This was combined with major declines in the

value of the rouble, worsening a recession that lasted

for seven quarters until late 2016. This has had a much

smaller effect on the country’s luxury consumer than

the average Russian as it is the site of the highest wealth

disparity of any major economic power according

to Credit Suisse, who estimate that the top decile of

wealth-holders owns 89% of all household wealth (Credit

Suisse, 2016). This has led to long-haul travel and journeys

to Western Europe, which are haunts of the Russian rich,

experiencing smaller declines than other destinations,

but declines nonetheless as even Russian oligarchs suffer

when the ruble more than halves in value against the

dollar and euro as it did between 2013 and early 2016

(Central Bank of the Russian Federation, 2017).

Conditions began to stabilize in terms of the tourism

market in late 2015 and into 2016, with some tentative

Figure 6: Russian Travel Destinations in Europe as of Q2 2017 (000’s)

Central/Eastern Europe

Southern Europe

Western Europe

Northern Europe

0 2,000 4,000 6,000 8,0001,000 3,000 5,000

7,124

1,314

4,362

1,084

7,000

Source: ETC, 2017

Table 2: Russian Travel Destinations in Europe as of Q2 2017

Outbound journeys Overall market share

Travel to Europe 13,885,000 73.5%

Northern Europe 1,084,000 5.7%

Western Europe 1,314,000 7.0%

Southern Europe 4,362,000 23.1%

Central/Eastern Europe 7,124,000 37.7%

Source: ETC, 2017

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in a number of destinations and also in the number

of domestic trips. Contactlab estimates that foreign

spending as a proportion of Russian luxury consumers

overall travel budgets was nearly 90% in 2014 but this

share fell precipitously in 2015 to around 65% (Exane BNP

Paribas Research & Contactlab, 2016). Aviasales recorded

an increase of 4% in their site’s bookings for Russian

destinations in the first half of 2017.

Elsewhere, they reported to EyeforTravel that the major

areas for Russian inbound growth were the Caucasus

(Armenia + 240%, Azerbaijan, +92%), China (161%),

Thailand (+91%) and Western Europe (Germany +122%,

in luxury spending had returned in 2016, with a strong

increase recorded in Q3 2016 and overall spending

growing by potentially by 5-10% for the entire year.

The report notes that Russian shopping in Italy (a key

Russian shopping destination) grew by 3% in 2016. They

expect the growth found in 2016 to continue into 2017

(Exane BNP Paribas Research and Contactlab, 2016).

According to Aviasales data, business class bookings as

a percentage of sales have remained stable throughout

the first half of 2017 compared to 2016, following a

fall from 2015 to 2016. The company, which is Russia’s

largest metasearch site by visits, also notes strong growth

Figure 7: High Growth Destinations for Russian Premium Travel in H1 2017 Through Aviasales Metasearch Engine

Source: Aviasales, 2017

300%

250%

200%

150%

100%

50%

0%

142%

121%

91%

161%

240%

49%

122%

173%

92%

4%

Russia ItalyChina USArmenia SpainGermany UzbekistanAzerbaijan Thailand

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Table 3: High Growth Destinations for Russian Premium Travel in H1 2017 Through Aviasales Metasearch Engine

yoy percentage change in aviasales bookings average booking value

Russia 4% $713

Armenia 240% $649

Azerbaijan 92% $786

China 161% $2,080

Germany 122% $1,471

Italy 121% $1,546

Spain 173% $1,679

Thailand 91% $2,940

US 49% $4,302

Uzbekistan 142% $954

Source: Aviasales, 2017


a vital region to draw consumers from, especially given

their interest in travelling for shopping across the region.

2.2.1 ChinaChina is the number one source of tourists worldwide,

with projections estimating that more than 140 million

outbound journeys are to be made in 2017 (COTRI, 2017).

A very large proportion of these international travellers

would count as luxury travellers, as the country is still at

an early stage in its development as a travel market. As

yet, only a small proportion of the Chinese population

hold passports and have the means to travel. This has led

the country’s consumers to be highly coveted as they,

on average, spend far more when abroad than any other

nation. EyeforTravel 2017 consumer survey data found that

the median reported spending category for outbound

trips is between RMB20,000 to RMB39,999 per household,

equivalent to approximately USD2,900 to USD5,000 at

the time of the survey (EyeforTravel’s Chinese Consumer

Survey, 2017). A 2017 Oliver Wyman survey from early

2017 found that spending per trip was of a similar level

at RMB20,317 (Oliver Wyman, 2017). By comparison,

UK consumers spent around GBP620 (USD790) per trip

outside of the UK according to the ONS (ONS, 2017).

Median domestic spending is much lower at between

RMB5,000 to RMB9,999 per trip, with domestic tourism

more mass market and less of a priority for luxury travellers.

Italy +121%, Spain +173%). This largely reflects the

long-standing Russian interest in chasing sunnier climes,

security concerns in previously popular destinations, and

a growing tourism relationship in the case of China, with

Russia also seeing an increase in inbound traffic from

China. Interestingly, the US also performed well, and the

vast majority of Russian visitors are likely to fit into the

luxury category, as the average booking value is by far

the highest of all the high growth destinations provided

to EyeforTravel at USD4,302 (Aviasales, 2017). This jump

may be partially down to a more favourable view among

Russians of the US in the Trump era. Only Russia and Israel

now have more confidence in the presidency than under

Obama according to a Pew study (Pew, 2017).

2.2 asia-PacificAsia-Pacific is home to both a series of a developed luxury

travel markets, such as Australia, Hong Kong, Singapore,

South Korea, and Taiwan, alongside a host of developing

economies that should eclipse these by far for spending

levels and journeys as they mature. China, India, Indonesia

and South East Asia will be engines for growth, adding

huge numbers of luxury travel consumers. Amadeus

expects South Asia to be the fastest growing of all the

regions it forecasts and South East Asia the third fastest.

This will push the Asia-Pacific region out to become the

dominant force in world luxury travel in the long term and

Figure 8: Spending Per Trip in China – Domestic Versus International Trips

40%

35%

30%

25%

20%

15%

10%

5%

0%Less than

¥1,000¥20,000 - ¥39,999

¥5,000 - ¥9,999

¥40,000 - ¥99,999

¥10,000 - ¥19,000

More than ¥200,000

¥1,000 - ¥4,999

¥100,000 - ¥199,999

Source: EyeforTravel’s Chinese Consumer Survey, 2017

n Domestic spending n International spending

5.6%

14.2%

23.6%

36.2%

5.8%

28.8%

22.5%

17.5%

0.5%

10.0% 9.3%

0.3%

4.1%

17.5%

2.4%

0.5%

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Spain experiencing very strong growth in 2017. Hurun

reports that Europe is the top region that its wealthy

respondents expect to travel to in the next three years

at 49% of the sample. The region also came top for

travel in 2016, followed by South East Asia (particularly

Thailand and Vietnam; Hurun Research Institute, 2017).

Other key destinations are the US and South Korea,

which have not performed well for Chinese tourists in

2017 and Australia and Japan, which are seeing a strong

continuation of positive recent trends.

A recent trend that demonstrates the increasing

interest of the Chinese consumers in more adventurous

vacations is the growth in travel to the polar regions,

with Chinese luxury travellers now the second biggest

market in Antarctica and the largest to Russia’s Arctic

(Financial Times, 2017b). Internally, Yunnan, Sanya,

Macau, Tibet and Hong Kong are popular destinations.

In terms of recent market developments, the

government crackdown and austerity saw

underperformance in the Chinese luxury market

post-2011 even as wealth exploded, which was not

helped by a long-term decline in the value of the yuan

from 2014 to 2016. This latter factor was noted by Credit

Suisse, alongside a decline equity values, as making

2016 a poor year for wealth growth in China, with a

small decline in the number in the number of adults

with wealth above USD1 million compared to 2015

(Credit Suisse, 2016).

However, spending and wealth growth have turned

around in the second half of 2016 and continued into

2017. The yuan has consistently increased in value since

the start of the year against the dollar, rising by more

than 5% at the time of writing and Chinese consumers

look to be back on the spending spree.

The ETC noted double-digit growth in arrivals or

overnight stays across all bar five out of the 29 European

countries that reported data for Chinese consumers, with

Montenegro increasing overnight stays by 141% (ETC,

2017). This marks a change from subdued growth in 2016.

VisitBritain reported that Q1 2017 arrivals from China

were up 15.6% and bookings up 20% to the middle of

The rate for Chinese spending at the very top end of

the wealth scale is naturally far higher than even the

elevated averages mentioned earlier. Hurun’s 2016

survey of 525 young luxury Chinese travellers born after

1980, who had an average age of 28 and an average

wealth of nearly RMB 39 million, found that they spend

on average RMB420,000 (approximately USD63,000) on

tourism per household and RMB220,000 (approximately

USD33,000) on shopping abroad. In its 2017 survey,

which had an average age of 42 and average wealth of

RMB22 million, the average budget was RMB380,000.

The average spend per night on a hotel is RMB3,800

(USD570) (Hurun Research Institute, 2016; Hurun

Research Institute, 2017).

Chinese HNWIs in Hurun’s 2017 survey went abroad

3.3 times in the previous year for an average of 27

days, 69% of which was for leisure travel. For those

consumers born post-1980, they had visited on average

13 countries (Hurun Research Institute, 2017).

Although shopping spend among Chinese travellers

is still very high, shopping spending is in decline as a

proportion of overall trip budgets and as a motivator

to travel. Whilst total spending per trip rose 3.5% YoY,

the amount of budget allocated to shopping fell from

41% to 33% according to Oliver Wyman (Oliver Wyman,

2017). Hotels.com recorded the proportion of Chinese

tourists noting shopping as the reason for their trip

decline to one-third of the sample in 2017 from more

than two-thirds in 2016. A Survey by the Financial Times

also found a trend of general decline as 37% of trip

spending went to shopping in 2017, down from 47%

in 2013, with the amount spent on accommodation,

food and entertainment up to 31% from 44% (Financial

Times, 2017a). The top category for Chinese spending

whilst travelling is cosmetics.

Chinese travellers generally travel within Asia, with

more than four out of five journeys made in the region

but as wealth rises, then so does travel to further afield

and more adventurous destinations. Europe is the

top destination for luxury travellers currently and is

expected to continue to be so in the near future, with

France, Italy and the UK the leading destinations, and

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comparison post 80s and 90s travellers spend 27% (CITM,

2017). EyeforTravel research found that ages 36-55 spent

the most but 18 to 35 year olds were only just behind

despite lower incomes (EyeforTravel’s Chinese Consumer

Survey, 2017). This bodes well for continuing growth in the

Chinese luxury travel market as younger consumers reach

their peak earning and spending potential.

EyeforTravel research has found that the highest

spending region in China is Beijing, followed by

Shanghai, with Tier 1 cities currently the key outbound

markets (EyeforTravel’s Chinese Consumer Survey, 2017).

2.2.2 JapanJapan is a complex luxury travel market but one that

holds huge promise. On the face of it Japan, should be

a market whose time has come and gone, facing lost

decades of low and inconsistent growth, alongside

a demographic crisis as the country ages. In reality,

it is a massive and thriving luxury travel market that

will actually grow in the coming years, presenting

opportunities for travel brands.

Japan remains an extremely affluent society and this

wealth is more evenly distributed than in comparable

Western economies, with the top 1% earning salaries

of USD240,000 compared to USD1.2m in the US

the year. Chinese arrivals to Spain increased 28.4% from

January through to April (VisitBritain, 2017; BBC, 2017;

TourMIS, 2017). Macau, long a haunt of wealthy Chinese

as its casinos have until recently largely catered for upper

tier gamblers, reported a return to increased gaming

revenues across 2016 and into 2017 and a 5% increase in

visitors in Q1 2017 (Financial Times, 2017c).

In the longer term, the demographic and wealth trends

strongly support growth in the Chinese luxury travel

market. The number of dollar millionaires is expected to

multiply ten times between 2006 and 2026 to 1.8 million,

according to the Knight Frank Wealth Report 2017.

Credit Suisse predicts that the number of millionaires will

increase by 73% between 2016 and 2021, the highest

out of all the countries it forecasts (Credit Suisse, 2016).

McKinsey believes that by 2025 Chinese consumers will

account for 44% of the personal luxury goods market, up

from 12% in 2008 (McKinsey, 2017).

Furthermore, younger Chinese consumer value and

spend more on travel. Hurun’s research suggests that

the post-1980s generation of HNWIs have higher wealth

and spend more on international travel than older

counterparts. The 2017 CITM report notes that the post

90s generation spend more on international travel than

any other generation as a proportion of income at 35%. By

Figure 9: Chinese HNWI Visits Abroad 2016

70%

60%

50%

40%

30%

20%

10%

0%

8%

27%

8%

34%

58%

32%

10%

39%

61%

Europe Pacific Islands

South & Southeast

Asia

Japan & Korea

North & South Pole

Hong Kong, Macau & Taiwan

Middle East

America Africa

Source: Hurun Research Institute, 2017

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million and this will further rise to 1.516 million by 2026,

an increase of 30% (KnightFrank, 2017).

Critically travel brands should note that a large part of

this is being driven by demographics. Older Japanese

consumers have benefited from years of company

employment, higher rates of home ownership, generous

pensions and if they have worked for the same company

throughout, an average final bonus of more than

USD200,000 (Bloomberg, 2017d). Not only this but high

inheritance tax rates incentivize ageing Japanese to

divest assets and encourages spending in later years.

Japan is also in its best period of expansion for more

than a decade, with more than six consecutive

quarters of growth. The most recently available data

(Huffington Post, 2015). Whilst this means less ultra-rich

consumers, it has created a broad base of still highly

affluent consumers. So much so that the country has

the second highest number of dollar millionaires in

liquid assets after the US according to both Knight

Frank and CapGemini, with the latter reckoning that the

nation has more millionaires than Germany and China

combined (CapGemini, 2017).

Not only this but the number of Japanese millionaires

is still on the rise. CapGemini estimates that the wealth

of Japanese HNWIs has been rising since 2011. In the

last available year for data – 2015 – their US dollar

wealth jumped by 11.4% (CapGemini, 2017). Knight

Frank estimates that in the decade preceding 2016

the number of dollar millionaires rose by 35% to 1.166

Figure 10: Japan HNWI wealth change 2012-2015

Source: CapGemini, 2017

7000

6000

5000

4000

3000

2000

1000

02013 20152012 2014

30%

25%

20%

15%

10%

5%

0%

n HNWI wealth (USD billions) n Year-on-year percentage change

Table 4: Japan HNWI wealth change 2012-2015

hnwi wealth (usD billions) yoy Percentage change

2011 4230.9

2012 4452 5.2%

2013 5532.8 24.3%

2014 5899.3 6.6%

2015 6571.4 11.4%


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This presents an excellent growth opportunity for

travel brands and makes older luxury consumers in the

Japanese market the key demographic to target given

their high wealth and greater leisure time to vacation. In

terms of targeting these consumers, domestic vacations

are particularly popular. Expedia research of eight major

tourism markets notes that Japan had the highest rate

of respondents reporting that their trip was within their

own country, beyond even the US. Just 14% of Japanese

respondents reported that their journey was outside the

country, compared to 18% of US travellers, and 73% of

Germans, the latter of which is the highest in the survey

(Expedia, 2017a).

Internationally, Japanese luxury consumers principally

travel to the US, Western European (particularly France,

Germany, Italy, and Spain), and developed countries

in Asia. According to Affluential Hawaii topped the list

of destinations that high-end Japanese travellers have

visited in the past 12 months up to May 2016 and was

also the top destination they were planning to visit in

the following 12 months. New York was the second

most desired destination, reinforcing the attraction

of the US. The cruise industry is also experiencing

extremely high growth in passenger numbers from

the country as Japanese passengers rose 12% in 2016,

creating a scramble to expand operations, with Princess

Cruises, Genting Hong Kong, and MSC Cruises all

announcing more cruises.

2.2.3 australiaAustralia and New Zealand already have a very mature

luxury travel market, with nearly one third of outbound

trips falling into this category in 2015, according to

Amadeus. Consequently, between 2015 and 2025,

luxury travel from the area will grow with a CAGR of

4.1% compared to 3.8% for the overall travel market

and the Oceania region is one of the slower growing

markets expected by Amadeus. The upside is that

Australian consumers are already very high spenders

on travel, with many destinations noting them as

among the top sending per capita countries, such as

Singapore, Thailand and the US (Marketing Interactive,

2017; Bloomberg, 2017f; Fox News, 2017). Australia as

an inbound market will also benefit from the growing

surprised analysts, significantly beating expectations

and seeing the economy surge 4% in Q2 2017 making

it the top G7 economy. There was much cheer from

the increases in private consumption and domestic

demand, which grew by 0.9% and 1.3%, respectively.

At the time of writing Q3 estimates were not available

but growth is expected again, which would make

the period the longest period of sustained growth

since the turn of the Millennium. The expansion has

pushed Japanese unemployment to a 23 year low and

the ratio of open jobs to applicants to a 43 year high

(Financial Times, 2017d).

This positivity has fed through to the travel market,

with travel brands reporting growth throughout and

especially at the top end of the Japanese leisure travel

market. In 2016 Japanese outbound travel shook off

years in the doldrums for outbound travel and grew by

5.6% and followed this into 2017, with outbound travel

growing by an estimated 6.3% across H1 2017 (Japan

National Tourism Organization, 2017). Affluential’s

research noted that from 2015 to 2016 the percentage

of Japanese luxury consumers agreeing with the

statement “I am more likely to travel abroad for vacation”

increased from 49% to 60% (Affluential, 2016).

Figure 11: Japan dollar millionaires from 2006 to 2026

Source: Knight Frank, 2017

1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

020162006 2026

863,700

1,166,000

1,515,800

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of South Korean outbound travellers and, within that,

luxury travellers. From 2010 to 2016 the number of

outbound journeys undertaken by South Koreans has

leapt every year to the point where there are now

more than 22 million outbound journeys undertaken

each year and the total grew by 79% over the period

(Korea Tourism Organization, 2017). For luxury travellers,

Affluential found that the percentage of South Korean

consumers in this category agreeing that they would

travel more rose from 71% in 2015 to 79% in 2016

(Affluential, 2016). The growth trend continued into

2017 with H1 2017 seeing the number of outbound

journeys growing by nearly 19% year-on-year.

In terms of trends and reaching the South Korean

luxury consumer, recent years have been marked by

the rise of the independent South Korean traveller

and the fall in group travel. This is particularly so in

younger generations, who will also drive an already

dominant role of digital research and purchase routes.

South Korea is one of the most connected and digitally

focused societies on earth, particularly with regard

to smartphones. Pew estimates that the country has

the highest rate of smartphone penetration of any

country in the world, at 88% of adults in 2015 (Pew,

Asia-Pacific market, with EyeforTravel noting that

Chinese consumers put Australia as the destination they

would most like to visit in 2017 (EyeforTravel’s Chinese

Travel Consumer Survey, 2017). The country is also

seeing an influx of wealthy individuals, with Australia

is the top country worldwide for millionaire inflows in

2016 (Research and Markets 2017).

2.2.4 south koreaBoth wealth and outbound travel have expanded

massively in South Korea over the last decade.

CapGemini finds that from 2011 to 2015 the wealth

held by HNWIs increased by 39% (CapGemini,

2017). Knight Frank notes that the number of dollar

millionaires doubled between 2006 and 2016 and grew

by 6% from 2015 to 2016 (Knight Frank, 2017). Credit

Suisse notes that the growth has pushed the country

into the top 20 for the number of millionaires and also

UHNW individuals, with the country containing around

2% of the global total of millionaires. They expect the

overall number of dollar millionaires to grow by 41% by

2021 (Credit Suisse, 2016).

The country’s economic success and increasing wealth

has driven a massive expansion in the overall number

Figure 12: South Korea HNWI wealth change 2011-2015

6000

5000

4000

3000

2000

1000

02013 20152012 2014

14%

12%

10%

8%

6%

4%

2%

0%

n HNWI wealth (USD billions) n Year-on-year percentage change

2011


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planned to visit in 2016 were Hong Kong, Singapore

and Tokyo, according to Affluential (Affluential, 2016).

The country is also a strong destination for inbound

luxury travel from Asian destinations, with China by far

and away the greatest source. A huge part of this is the

country’s developed luxury retail markets and cheaper

costs, with high taxation rates in China creating a

roughly 30% to 40% price differential between the two

and leading to very high spending rates and growth

in 2016. A South Korean official noted that duty free

“sales to foreign tourists increased about 40% last year

in value, about 80% of them are Chinese; but sales to

South Korean travellers saw only a 9.7% increase.” (TR

Business, 2017c). Euromonitor found that the South

Korean tourism industry was one of the world’s best

performing when it came to spending by international

tourists in 2016, with 11% growth (Skift, 2017).

However, in late 2016 and into 2017, there is a growing

body of evidence suggesting that diplomatic tensions

have taken their toll on inbound luxury travel to

South Korea. ForwardKeys data shows a decrease in

international passengers staying four to eight nights of

-24% in the first half of 2017 and a projected -26% in

2016). Affluential notes that South Korea was behind

only China and India when it came to luxury consumers

who purchase luxury good online and purchase travel

through mobile (Affluential, 2016).

The organization export.gov, which promotes US

business, notes that there are opportunities in creating

luxury packages to cater for the high number of single

professional Korean women who travel for leisure and

Korea tourism statistics note that marginally more

women travel internationally than men.

Generally, the South Korean traveller generally and also

luxury traveller tends to favour regional destinations. A

major expansion in air routes has created strong growth

in short breaks to a variety of regional destinations.

Japan is the major destination for South Koreans, with

an increasing number of luxury consumers enjoying

short breaks in the country to enjoy the fine dining

and shopping, which are major priorities for the group.

South Koreans account for more than a fifth of arrivals

to the Japan, and South Koreans generally tend to head

to the Kansai region (Bangkok Post, 2017). The top three

destinations luxury travellers have visited in 2015 were

Tokyo, Hong Kong and Osaka and the top three they

Figure 13: Growth in Outbound Journeys from South Korea, 2010-2016

Source: KTO, 2017

25m

20m

15m

10m

5m

02013 201620152012 2014

25%

20%

15%

10%

5%

0%

n Number of outbound journeys from South Korea, 2010-2016 n Year-on-year percentage change

2010 2011

1.6%

8.2%

12,488,364 12,693,733

13,736,97614,846,485

16,080,684

19,310,430

22,383,190

8.1%

8.3%

20.1%

15.9%

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where I can buy luxury products”, 74% and 79% agreed

growing from 61% and 62%, respectively. This was the

highest rate of agreement out of all of the eight Asian

economies studied. Indian luxury travellers also came

out ahead of the other economies when it came to

digital bookings, with 92% reporting that they booked

online, with the vast majority occurring on mobile at

76% of the respondents (Affluential, 2016).

2.3 americas2.3.1 usThe US remains the unchallenged rival of HNWIs and

wealth held by these individuals, making it the most

important luxury travel market in the world. Knight

Frank estimates that the US had nearly 4.4 million

individuals with more than USD1 million in liquid assets

in 2016, which is more than the next six countries

combined on their list. Credit Suisse estimates that the

US has 41% of the world’s dollar millionaires and this

increases for Ultra-High Net Worth (UNHW) individuals,

where the US is home to 52% of the global total (Credit

Suisse, 2016). Not only this but they analysts do not

expect the rate of growth to slow down, with Knight

Frank estimating a growth rate of 30% from 2006

to 2016 in the number of millionaires and a further

the second. They also note that airline flight capacity

between China and South Korea fell by -17% in H1

2017 ForwardKeys, 2017). The Korean National Tourism

Agency figures for the first seven months of the year

record that arrivals from China were down by 46.5%

compared to the same period in 2016 (KTO, 2017).

2.2.5 indiaIndia is expected to be the fastest growing luxury

market between 2015 and 2025 in Amadeus’ study,

with a CAGR of 12.8% across the period. This will also

push the South-Asian market to become the top

region for growth, driven by the growing middle-class

(Amadeus, 2016).

Part of this growth is the fact that India was coming

from a low base, with an estimated 67,800 dollar

millionaires in 2006 according to Knight Frank. However,

this growth will take it out to 660,800 millionaires by

2026, which is an increase of 875% over the period

and will make the country the sixth biggest home of

millionaires in the world by 2026 (Knight Frank, 2017).

India is a market with huge potential over the next ten

years. There is little regional travel among Indian luxury

travellers, but a high level of medium and long-haul

travel. This is partly down to the lack of suitable

destinations for luxury travel nearby. It is also fuelled

by the diaspora of Indian inhabitants in Europe, the

Americas and the Middle East, making destinations in

Western Europe, the United Arab Emirates, the Maldives

and the Seychelles popular among luxury Indian

travellers. The US is also on the rise, with Affluential

finding that Los Angeles was the top destination noted

by their respondents in the coming 12 months. The

domestic market is also expanding rapidly, with IATA

noting that domestic Revenue Passenger Kilometers

(RPKs) grew by 14.6% in 12 months up to March 2017

(IATA,2017).

In terms of behaviors Indian luxury travellers are

very keen shoppers according to Affluential and this

shows no sign of diminishing. When asked whether

the agree with the statements “I mainly buy luxury

brands when travelling” and “I prefer travel destinations

Figure 14: India Dollar Millionaires from 2006 to 2026


7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

020162006 2026

67,800

264,300

660,800

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and Western Europe are important destinations. In

particular as disposable income rises, then Western

European destinations become more popular, with

Italy, France, the UK and Germany the main points of

travel. They also over-indexed for spending on dining,

cultural experiences, and outdoor activities and also

for membership for hotel and airline loyalty programs

(EyeforTravel, 2016b).

In terms of where these consumers are located in the

US, they are largely focused on either coast, with the

US North East seeing the greatest concentration of

wealth in the country. According to Equifax, the states

with the highest total income per household are, in

order, Connecticut, Delaware, Virginia, New Jersey, and

Maryland, and the states with highest total assets per

household are Connecticut, New Jersey, Massachusetts,

Washington D.C., and California. (Equifax, 2017a; Equifax,

2017b). There are further pockets of concentrated wealth

around urban areas in Arizona, Colorado, and Texas.

The outlook also appears reasonably solid in the

short-term, particularly for the domestic market, with

good prospects across the medium-, and long-term

for the US luxury travel market. This is in contrast to the

US personal goods luxury market which Bain predicts

will have a rough 2017 and despite a relatively poor

performance from the dollar across the first half of 2017.

Two surveys point to optimism in the short-term. The

first, a survey of luxury travel management firms by

Strategic Vision in February 2017, reported that 58%

of firms’ clients are optimistic about domestic travel,

44% saw no change and just 2% were “cautious”.

International travel sentiment was much weaker, with

half of the firms characterize reporting a “cautious”

outlook, 31% optimism, and 31% expecting the status

quo (Strategic Vision, 2017).

The second survey, released in May 2017, of more than

650 U.S. and Canadian travel agents specializing in

luxury travel found that 44% had seen double-digit sales

increases in sales, 25% experienced 25% increases, and

12% by more than 50%. Furthermore, in the 12 months

following the survey 45% expected double-digit growth.

30% growth from 2016 to 2026 (Knight Frank, 2017).

Credit Suisse estimates that the number of asset dollar

millionaires will grow by 33% from 2016 to 2021.

This makes US travellers: “One of the most lucrative

travel market segments in the world and an important

driver of luxury travel demand and trends across

the globe,” according to the survey by luxury travel

analysts Resonance. The wealthiest five per cent of US

households take an average of 14.3 trips per year, about

half for business and half for leisure. This compares

to some 4.8 trips a year on average taken by all US

travellers. The online survey quizzed 1,667 US travellers

in the top 5% of earners and 742 in the top 1%. It found

that each luxury household was made up of on average

2.9 people, with an average spend of USD3,115 per

person per vacation. This adds up to about USD390

billion total travel expenditure (Resonance, 2016).

EyeforTravel and Equifax’s research into key US

outbound travel segments found that for the higher

tier segments of luxury consumers the key destinations

are Mexico and Canada, as is the case with most US

international tourists, but beyond this the Caribbean,

Figure 15: US dollar millionaires from 2006 to 2026


7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

020162006 2026

3,376,200

4,389,000

5,705,700

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2.3.2 brazilBrazil emerged as one of the biggest outbound tourism

markets in the early years of the millennium, making

a strong contribution to luxury and business travel.

As one of the BRICS, Brazil was earmarked as one of

the world’s top emerging economies. Powered by a

commodities boom, the number of wealthy consumers

expanded significantly. However, this has given way to

a major recession as a political scandal has engulfed the

country and demand growth for key exports has faltered,

exposing underlying weaknesses across the Brazilian

economy, such as a poor regulatory environment, high

taxation and uncompetitive practices.

The depth of this recession, the longest in the country’s

history, has hit even at the top end of the market, with

CapGemini noting that in every year between 2012

and 2015 the wealth held by HNWIs has fallen (see

Figure 16). Although tentative growth has returned to

the Brazilian economy, with 1% growth in Q1 2017, it

will take some time for the damage to be undone to

Brazilian international tourism and the continuation of

political scandals threatens the fragile economic growth

(BBC, 2017b).

However, the highest growth was skewed toward those

that catered to the very highest spender, fitting in with

wider patterns (Travel Market Report, 2017).

Although Strategic Vision’s survey believed there was

reason for caution regarding the outbound market,

there appears to be little reason for concern from

the numbers so far. The Bureau of Economic Analysis

and the National Travel and Tourism Office (NTTO)

reports that spending by US travellers rose 6.3% in H1

2017 (Bureau of Economic Analysis and NTTO, 2017).

Air departures from the US were up 8% in H1 2017

according to ForwardKeys (ForwardKeys, 2017). The

UK in particular has seen excellent performance across

2017 from US tourists, with H1 2017 seeing a 25%

growth in arrivals from North America, according to

VisitBritain (VisitBritain, 2017).

Over the long term, Amadeus expects this already

enormous luxury market to continue growing and

growing ahead of the overall travel market at more

than 6% per year (Amadeus, 2016). The strength of this

projection are supported by the growing wealth of the

very wealthiest consumers as we saw at the start of

the section.

Figure 16: Brazilian HNWI wealth change 2012-2015

4100

4050

4000

3950

3900

3850

3800

3750

3700

3650

3600

35502013 201520122011 2014

5.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

-6.0%

-8.0%

n HNWI wealth (USD billions)

n Year-on-year percentage change

3892

4037

3.7%

-0.3% -1.4%

-6.2%

4026

3968

3723

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Figures from Florida show a continued decline between

2014 and 2016 following on from years of extremely

strong growth. From 2013 to 2014 arrivals increased by

nearly 37% but then fell -10.1% YoY in 2015 and then

even further by -28.7% in 2016, demonstrating the huge

effect of the economic crisis (Reuters, 2014; Orlando

Sentinel, 2015; Visit Florida, 2017).

One result of this economic crisis and the precipitous

decline in the value of the real in 2014 and 2015

is that the domestic market is showing signs of

recovery before the international market. Brazil has

strong domestic luxury travel facilities that have seen

investment as the country geared up to host the 2014

FIFA World Cup and then 2016 Olympics. As such,

Outbound travel from Brazil collapsed in 2016, falling

15% in the first eight months of 2016 according to the

World Travel Monitor. WTM also showed that Brazilians

took shorter international trips and switched from air

travel to car travel (ITB, 2017).

This has hit key inbound destinations, with the

America’s hit particularly badly as it account for the

majority of Brazilian outbound travel. WTM notes that

across the first eight months of 2016 Brazilian travel to

the Americas declined 16%. Within the Americas, luxury

Brazilian travellers tend to visit a few key destinations,

with New York and Florida out on top for both arrivals

and spending. Consequently, both have been hit by

Brazilian withdrawals in international luxury travel.

Figure 17: Change in 2016 Outbound Travel to World Regions from Brazil Across First Eight Months of 2016

-18% -16% -14% -12% -10% -4%-8% -2%-6% 0%

Americas

Europe

Asia

-16%

-10%

-5%

Source: ITB, 2017

Figure 18: Brazilian Arrivals to Florida 2012-2016 (000’s)

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0

40%

30%

20%

10%

0%

-10%

-20%

-30%

-40%2013

1,200,000

23.7%

36.7%

2015

1,475,000

2016

1,051,000

2012

970,000

2014

1,640,000

n Brazilian arrivals to Florida (millions)

n Year-on-year percentage change

-10.1%

-28.7%

Source: Reuters, 2014; Orlando Sentinel, 2015; Visit Florida, 2017

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2017). This coincided with the low point of a lengthy

decline in the Canadian dollar against international

currencies and the dollar in particular from 2013 to Q1

2016. From early January 2013 to early January 2016 the

Canadian dollar lost 28% of its value against the dollar.

The net effect of this was a retrenchment in Canadian

spending on leisure vacation and the number of trips

taken in 2016 overall but with the US suffering the

most. According to Canadian government data the

number of Canadians returning after one or more

nights outside the country decreased 2.7% from 2015 to

2016, although it appears that the travel to the US and

the bottom of the market saw the brunt of this as the

number returning from journeys outside the US grew

by 3.7% (Statistics Canada, 2017).

This downbeat view has been reversed in 2017, with

the economy now booming and the Canadian dollar

regaining some of its losses. The Canadian economy is

expected to grow at it fastest rate since 2011 and be one

of the leading G20 nations, with growth across the year

expected to be 2.7%, following on from a barnstorming

first quarter of 3.7% growth quarter-on-quarter (Business

Vancouver, 2017). This has led to a return to strong

growth in overall Canadian travel and luxury travel.

Canadian international journeys increased by 4.9% overall

and, excluding the US, 4.7% in the first five months

of 2017 (Statistics Canada, 2017). Destination Canada

reported that domestic expenditures rose by 6.6% in Q1

2017 (Destination Canada, 2017). North American luxury

travel agents were also reporting high growth rates and

strong optimism (see Section 2.3.1, the US for more).

Overall, this indicates a robust 2017 for Canadian luxury

spending.

Canada’s International Travel Survey showed that

in 2015, the most visited countries were first the

US, followed by Mexico, then the UK, France, Cuba,

Germany, the Dominican Republic and China (Statistics

Canada, 2015).

2.4 middle eastOil rich Gulf Cooperation Council states such as Saudi

Arabia, Kuwait, Qatar and the UAE have contributed

the overall pattern of data and reports suggests that

Brazilians, including luxury consumers have switched to

travelling more at home. A consumer survey conducted

by the Ministry of tourism found that 86% planned to

travel domestically in 2016 (Ritz G-5, 2016). Brazilian

government statistics also showed that domestic flights

returned to growth in early 2017 with RPKs increasing

in March 2017 breaking a run of 19 consecutive months

of falling demand and continuing to grow throughout

the remainder of H1 2017 (anna aero, 2017). Expedia

Group reported that “domestic travelers in Brazil are also

driving demand for the destination’s luxury segment

with a reported increase of more than 55% in 2016

when compared to the previous year,” (Expedia, 2017b)

Following on from the signs of domestic recovery

in 2016 and heading into 2017, it appears that the

international market for Brazilian travel is now back on

a growth path. ForwardKeys data shows an increase

in international flight booking of 18.8% in H1 2017

compared to the same period last year and 27.6%

growth in bookings made for H2 2017 up until 1st July

2017 (ForwardKeys, 2017). The Brazilian Central Bank

also noted that expenditure on international travel grew

by 10.1% in June 2017 compared to the same month in

2016 (Banco Central do Brasil, 2017).

In the long term, Brazil’s luxury travel market is set to

grow at a relatively modest 4.2% between 2015 and

2025, according to Tourism Economics figures quoted

by Amadeus (Amadeus, 2016).

2.3.3 CanadaCanadians are some of the highest per capita spenders

on travel in the world. However, a recession in 2015 and

intermittent growth in 2016 hit Canadians spending power

and consumer confidence, including at the top, and the

luxury travel market has only recently begun to recover.

Following strong gains in the half decade leading up

to 2014, the wealth held by Canadian HNWIs fell in

2015 as the country was hit by recession according to

CapGemini. They found that the number of HNWIs in

Canada decreased by 3.2% in 2015 and their wealth

decreased by 2.8% to about USD1.0 trillion (CapGemini,

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Instead greater growth in the luxury travel market will

be found in other Middle Eastern countries, though

from a lower base. The CAGR for emerging nations

Lebanon, Iran, Jordan and Egypt is 7.5% for the general

travel market and 8.9% for luxury travel (Amadeus,

2016). Iran has been helped by the lifting of sanctions

while other markets are bouncing back following the

disturbances of the Arab Spring.

Airlines from these states, such as Qatar Airways and

Emirates have set high standards of luxury. Qatar

Airways has created a new “QSuite” business class

product offering what is believed to be the first ever

double bed in business class along with privacy panels.

Emirates Airlines, based in Dubai, is another highly-

regarded luxury service. Etihad, based in Abu Dhabi,

offers what it calls Residence by Etihad, a high-end first

class offer in its Airbus planes featuring separate rooms

for travellers.

strongly to global luxury travel in recent years. However,

recent turmoil and changing economic conditions have

dampened the market somewhat and performance in

the coming years is not expected to be a strong as in

the recent past.

Amadeus estimates the general travel market for

Kuwait, Qatar and UAE will grow by 4.4% while luxury

travel overall across the Middle East region will grow by

4.5%. The report also estimates that the overall travel

market will grow faster than the luxury travel market

and the region will be one of the slower growing

regions. This is reflective of the fact that any of these

countries already have extremely high wealth levels

and living standard, such as Qatar, and the transition

the world is making away from fossil fuels. Knight Frank

notes that from 2015 to 2016 the number of millionaires

failed to grow, reflecting these already emerging

dynamics (Knight Frank, 2017).

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3.1 lead TimesLuxury travellers have a smaller dispersion in the

timeframes they choose to book their accommodation

and transportation. For luxury travellers, it is a bell curve

for both, peaking at between one and four weeks

before travel, whereas the average consumer follows

a flatter curve, with a greater proportion booking at

very short notice or planning their vacations further

in advance than luxury travellers. Tours and activities

on the other hand have noticeably longer lead times

for luxury consumers than the average. This is likely

reflective of the differences in lifestyles, types of trips

taken, spending per trip and price sensitivity.

In the case of transport and accommodation, luxury

consumers can afford to book within the peak pricing

periods and are less likely to be hanging on for last

minute deals. They also engage in far more travel per

year, averaging twice the journeys of the remainder

of the population and consequently will put less time

and emphasis on each individual vacation. However,

they do still require quality of service and comfort, so

they are less likely to search at the very last minute and

gamble with the possibility of dealing with diminished

or a total lack of inventory. In the case of tours and

activities, the experiential economy is pushing luxury

consumers to more and more unique and extravagant

3.

Luxury Consumer Booking Patterns

Figure 19: Lead Times for Accommodation Booking

30%

25%

20%

15%

10%

5%

0%Booked on

vacation2-3 months1-2 weeks 5-6 months More than

one yearLess than one week

3-4 months3-4 weeks 6 months to 1 year

Stayed with friends/family

n Luxury consumers n Rest of sample

Source: EyeforTravel Luxury Travel Analysis, 2017Note: For see methodology for the sources of data for EyeforTravel’s Luxury Travel Analysis


There is a counter-trend to the tendency for luxury

consumers to book accommodation and transport

later than standard tourists in that non-luxury travellers

are more likely to book these in the final week before

their holiday or in the case of accommodation whilst

they are on holiday. This may be down to budget

travellers hanging on for last minute deals and a lower

complexity in the planning process for non-luxury

travel. We can also see budgetary considerations in

that non-luxury travellers are more likely to use their

own vehicle and stay with friends or family, which is

also indicative of their lower propensity to engage in

expensive long-haul travel.

However, when it comes to tours and activities,

interestingly the trend is reversed. More than double

the percentage of non-luxury travellers report that they

book their vacation activities whilst they are on holiday

at 35.8%, compared to just 14% of luxury travellers.

Similarly, non-luxury travellers saw short lead times, with

more booking in the week before travelling than their

high-spending counterparts, at 17.3% against 11.5%.

Instead, high-end consumers prefer to make bookings

between one and four weeks before they depart, with

experiences, which need to be booked further in

advance than before.

In the case of accommodation 54% of luxury consumers

book between one week and four weeks from their

date of travel, as opposed to 33.5% for normal travellers.

The latter instead have a much higher tendency to

make their accommodation arrangements further in

advance, with 21.4% preferring to book between two

and four months from departure, as opposed to 15.3%

of luxury travellers. Even further out, 12% chose to book

six months or more compared to 6% of luxury travellers.

More than double the percentage of non-luxury travel

consumers also chose to stay with friends and family on

their trip (EyeforTravel Luxury Travel Analysis, 2017).

This trend line for accommodation is very closely

matched in the lead times for booking transport. Luxury

travellers are most likely to book between one and

four weeks before the trip, with three to four weeks the

most common timeframe 54.8% of luxury travellers

book between one and four weeks as opposed to

36.5% of the rest of the sample, according to the survey

(EyeforTravel Luxury Travel Analysis, 2017).

Figure 20: Lead Times for Transport Booking

35%

30%

25%

20%

15%

10%

5%

0%2-3 months1-2 weeks 5-6 months More than



Used own vehicle


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time means the cost of their holiday is a bit higher due to

availability issues they may be more willing to accept a

higher price point. They’ll deem that value for money.”

However, at the very top end of the spectrum Richard

Frampton, a travel manager at Hurlingham Travel

Services, has found an increase in the lead times for

booking trips among his clientele: “People seem to be

taking longer to make up their minds. This is a mixture

of luxury consumers shopping around and being

careful before they spend the money. Even for our most

loyal clients, you give them a quote and then it can be

six weeks before they come back and book it.”

He says the usual spend for holidays among his clients

is between GBP15,000 - GBP25,000 for a family holiday,

though the sums can go up over GBP100,000.

“There’s always a bit of a gap when people are spending

a lot of money but it seems that maybe it’s a bit longer

than it has been in the past,” he says. Most of his clients

are from the UK, so their budgets may have been

affected by the fall in the value of the pound since the

EU referendum.

54.8% of the luxury sample saying this was when they

booked tours and activities for their previous vacation,

versus 31.5% of the remainder of our survey population


This fits in with the wider evidence of the importance

of a vacation activity’s cultural capital for wealthier

travellers and their growing spend on experiences. The

kind of experience that is becoming the hallmark of

the luxury traveller stands above the average traveller’s

mass cultural activity and is therefore far more likely to

be something that needs to be booked in advance.

“Luxury travellers may book their Antarctica cruise 18

months in advance to ensure they get the itinerary and

cabin they want, while a city break to Europe may be

booked with just a week or two lead time,” according to

Lisa Warner, marketing director at luxury travel operator

Abercrombie & Kent.

“While not as price sensitive as the average traveller,

luxury travellers remain concerned with enjoying value

for money. The difference is that they have the luxury of

valuing their time more highly so if a shorter lead-booking

Figure 21: Lead Times for Tours and Activities Bookings

40%

35%

30%

25%

20%

15%

10%

5%

0%2-3 months1-2 weeks 5-6 months More than



Booked whilst on vacation


Source: EyeforTravel Luxury Travel Analysis, 2017

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consumers tend to have top-of-the-range smartphones

which are larger and faster, making researching and

booking accommodation easier.

This trend towards mobile booking is echoed in

transport, where 30.2% of luxury consumers have used

their mobiles to book transport compared to 18% of

standard travellers (EyeforTravel Luxury Travel Analysis,

2017).

When it comes to research, the difference is far less

pronounced with only a very small differential between

the two populations. Nearly 36% of luxury consumers

use the mobile to research their trips, compared to 32%

for non-luxury consumers (EyeforTravel Luxury Travel

Analysis, 2017).

In both population tablets continue to be niche

products, but interestingly the smartphone edges

out the tablet for luxury travel consumers, with tablet

usage more widespread for the rest of the population.

When it comes to booking accommodation, 19% of

non-luxury consumers use their tablets compared to

13.5% of luxury consumers (EyeforTravel Luxury Travel

He adds that another contributing factor may be that as

the luxury market is so vast and there is so much variety

on offer, clients need to think longer before choosing a

specific option. He doesn’t believe the trend to taking

longer to decide on a luxury holiday is because people

are more careful with their money, though adds that

people are still conscious of money and don’t want

to waste it. He says: “There’s this pre-conception that

because I’m spending this much money, I’m not going

to have a problem getting what I want. However, that

really isn’t the case.” He recently quoted a price for a

luxury holiday for a group of clients. They considered

the holiday, then came back after five weeks to book,

but the price had gone up by GBP2,000, he recalls.

3.2 Devices used During JourneyWhile luxury travel consumers and the rest of the

population look very much alike in the devices they

use to research their travel, the former are a lot more

comfortable booking their travel on smartphones.

Over 30% of luxury consumers have booked travel

accommodation using their mobile phones compared

to just 13% of standard travellers, our research shows

(EyeforTravel Luxury Travel Analysis, 2017). Wealthier

Figure 22: Research Devices Used to Plan Trip

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%Desktop/Laptop

33.3%

35.8%

15.2%

4.4%

1.3%

44.9%

32.0%

15.3%

6.7%

1.1%

Smartphone Did not use a deviceTablet Other



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Figure 23: Devices Used to Book Accommodation

Desktop/laptop

Smartphone

Tablet

Face-to-face

Other/did not book accommodation

To a call center

0% 20% 40% 60%10% 30% 50%

48.8%

46.0%

13.9%

31.1%

19.1%

13.5%

8.5%

4.1%

6.7%

3.5%

3.0%

1.8%n Rest of sample n Luxury consumers



Desktop/laptop

Smartphone

Tablet

Face-to-face

Other/did not book a flight

To a call center

Figure 24: Devices Used to Book Flights

n Rest of sample n Luxury consumers

0% 20% 40% 60%10% 30% 50%

46.8%

47.0%

18.2%

30.2%

12.8%

13.4%

13.1%

5.4%

9.0%

2.4%

2.0%

1.8%

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offers powerful ways of building direct contacts with

wealthy clients. Targeted digital marketing is powerful

as luxury brands need to create an air of exclusivity and

may be niche, which can mean forgoing mass market

advertising campaigns.

Maria Pajares, managing director of luxury hotel

marketing agency Mason Rose, says: “Hotels continue to

focus enormously on their own websites as a marketing

channel and booking source, while in most cases still

highly valuing their third-party relationships.

“Social media and digital marketing also continue

to be an area of key focus. Rich content, in particular

video and some virtual reality, ranks highly in terms of

prioritization. Influencer marketing and partnerships

which support and enhance a hotel’s brand by

association and open access to a valuable database

have grown in importance.”

Marketing luxury experiences via digital rests largely

on having authentic, outstanding photography taken

specifically to attract premium audiences. While many

hotels are creating Facebook pages where guests

can upload photos, some of the strongest marketing

messages are put out on Instagram and Pinterest. Hotels

are linking up with influencers on Instagram, which

now has 600 million users worldwide. Starwood Hotels

& Resorts teamed up with five Instagram bloggers and

included a booking feature within their photos. Some

of the influencers are treated to stays at luxury hotels,

where they photograph their surroundings and post

the images to their Instagram accounts. This gives

luxury hotels an ability to communicate with Instagram

followers using real life-images created by guests,

establishing an air of exclusivity and communicate the

experience. User-generated content gives hotels added

credibility compared to photography they commission

themselves.

Some of the leading influencers for luxury travel on

Instagram operate on sponsorship basis. Beautiful

Destinations (9.6 million Instagram followers),

Luxury World Traveller (2.6 million followers), and

OnlyForLuxury (2.4 million followers) all provide

Analysis, 2017). This runs counter to the assumption that

the tablet is a tool of well-off consumers and points to a

distinctly smartphone-led future for the entire industry,

as luxury consumers are more likely to be in the leading

edge of technology consumers who lead the way for

tech trends.

Running alongside this theme of lower spending part of

the population using more traditional booking routes,

the research also shows that non-luxury consumers

are twice as likely to book flights and accommodation

through a “face-to-face” travel agent and more likely to

use a call center.

However, it is worth noting the importance of

demography amongst the target market as well, with

age also playing a crucial role. “As with all consumers,

there is a move from laptop to mobile. The main

difference we’re seeing is that unlike the millennial

travellers, who have almost bypassed the tablet in

favour of phones, the luxury traveller is often a little

older and still shows a preference for tablet over phone,”

says Abercrombie & Kent’s marketing director Lisa

Warner. “That said, while online is the favoured research

channel, it’s still the phone that’s preferred for the

booking process.”

3.3 reaching the luxury ConsumerAs the luxury market has expanded over recent years,

a flood of new supply has come on stream to meet

demands, with new luxury hotels, restaurants, premium

experiences and destinations crowding the market.

This has made it hard for each player to stand out from

their rivals. There has been an expansion of media

outlets fuelled by the digital revolution. However, the

luxury consumer can be hard to reach through standard

marketing channels.

The luxury travel industry has put much store by

collecting data from loyalty schemes and keeping the

details of luxury travellers on file to target them later but

there are now more ways to reach the luxury consumers

as social media expands as a potential channel. While

many luxury brands once eschewed online marketing

and social media, they now understand that digital

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We use technology to help us communicate relevant

and engaging content to our clients and provide

data to inform our consultants, but at the end of the

day there’s no substitute for the human touch. At all

times, we prefer our clients to have the opportunity to

speak to our team, to build a personal relationship that

develops over time. If we can do this, we believe the

best advertising for A&K are those who travel with us

on numerous unforgettable trips and return as brand

ambassadors.”

Many luxury travellers believe they can obtain

better value for their money by going through a

well-connected travel agent. The agent will have

partnerships with leading hotel groups, enabling them

to get better deals and create a bespoke itinerary.

Richard Frampton, travel manager at Hurlingham

Travel Services, says the company has benefited from

membership of Traveller Made, which has connections

with luxury hotels across the globe. “For us it is amazing.

If we get enquiries, it is one of my first places to go,”

he says. Traveller Made negotiates partner benefits

and the agent signs into the site to find hotels deals,

then contacts the hotel directly. Travel agents offer to

negotiate extras such as breakfast and VIP treatment.

“It is all those little things that really make the holiday,”

says Frampton. He gives the example of Le Bristol Hotel

in Paris where breakfast can cost EUR60 per person and

a room EUR1,200 a night. “Sometimes it doesn’t matter

how much money you’ve got, a little extra can make all

the difference.”

sponsorship packages (Instagram, 2017a; Instagram,

2017b; Instagram, 2017c). Luxury brands such as Aman

Resorts has a widely-followed account as does Mr & Mrs

Smith, an agent for boutique hotels.

However, for some hotels, the social influencer route

can have hazards as it lessens the control that the

hotel brand has over the message. Lisa Warner at

Abercrombie and Kent says: “The key to marketing

to the luxury traveller is a bespoke, integrated and

consistent approach – a consistent message, integrated

across all channels that clearly communicates how we

can improve their quality of life.”

This is easier to achieve on WeChat, which is critical for

reaching Chinese luxury consumers, particularly as they

are younger and more technologically engaged than

wealthy travellers in the West. Customization of pages

and additional functionality means luxury travel brands

can control their image and reach the consumer with

targeted information when consumers are researching

and also when they are travelling by tapping into location

data. This can help to facilitate the experiences luxury

consumers crave and also to improve vacation shopping. It

even means WeChat users can book in-store consultations

directly from the app and, for many elite travellers having

personal contact with a travel agent is vital.

As Warner says: “We know that our most valuable

asset is our people. Our specialists take the time to

learn about their clients’ travel requirements to be

able to create the best holiday to meet their needs.

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4.

Luxury travellers take twice as many leisure trips as

non-luxury consumers, according to our research. Luxury

consumers take an average of 5.6 trips per year against 2.8

a year for the rest of the sample. For the former, these are

equally split between domestic trips and international trips,

at an average of 2.8 for both. Meanwhile, the rest of the

population, which has to be more conscious of budget,

is slightly more predisposed to domestic travel, taking an

average of 1.3 international trips and 1.5 trips within their

own country (EyeforTravel Luxury Travel Analysis, 2017).

These international trips are also more likely to be much

closer to home for the average consumer, with the luxury

traveller able to range far further on their international trips.

4.1 Trips Taken and Planned Looking at the dispersion in the number of journeys

planned between the two groups gives an even clearer

picture of the far greater ability and desire of the luxury

traveller to take multiple trips throughout the year.

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 luxury

travellers plan to take between five and nine trips in the

12 months after the survey was taken, far above the 6.3%

of lower income consumers. Once again, luxury travel is

twice the average, with luxury travellers planning twice

The Value of Luxury Travel Consumers and Their Spending Patterns

Figure 25: Number of Trips Taken Per Year

2.8 2.8

5.6

1.51.3

2.8

6.0

5.0

4.0

3.0

2.0

1.0

0.0Luxury consumers

domestic trips taken

Rest of sample domestic trips

taken

Luxury consumers international trips

taken

Rest of sample international trips

taken

Luxury consumers total

trips taken

Rest of sample total trips

taken



35.7%. Instead luxury consumers lead ordinary travellers

by just over 26 points when planning to vacation both

internationally and domestically. They also lead the

rest of the sample when it comes to planning to just

take trips internationally, although by a smaller margin


4.2 The value of luxury ConsumersAverage spend per trip is a key measure of revenue

for the travel industry. Our survey found that luxury

as many trips than other consumers. For the remainder of

our sample 57.3% of consumers plan to take two or less

trips (EyeforTravel Luxury Travel Analysis, 2017).

Planned trip locations show slightly more variation

than trips taken, illustrating the enhanced desire and

means luxury travellers have to journey outside their

home country. Less than half the percentage of luxury

consumers plan to vacation only domestically than

those in the rest of our survey population, at 16.2% to

Figure 26: Number of Trips Planned Over 12 months - Luxury Consumers Versus Rest of Sample

40%

35%

30%

25%

20%

15%

10%

5%

0%0 42 6 81 53 7 9 10 or

more


5.0%

1.5%

16.1%

36.2%

29.7%

4.2%2.7%

1.5% 1.2% 0.8% 0.1%

2.5%

9.2%

18.4% 19.2%

10.8%9.5%

7.0%

3.7% 3.7%1.0%

16.0%



Figure 27: Planned Domestic and International Trips

Vacation both domestically

and internationally

Vacation

internationally

Vacation

domestically


0% 20% 40% 60%10% 30% 50%

28.6%

54.7%

35.6%

29.1%

35.7%

16.2%

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all consumers but particularly among the luxury

segment. If they do then the travel sector will need to

plan even more capacity and put even more emphasis

on catering to these travellers.

4.3 luxury Consumer key spending itemsWhile there is still a strong market in offering luxury

consumers a quiet time by a luxurious pool, good food

and some sightseeing, luxury holidays are increasingly

focused on delivering rewarding and transformative

experiences. There is a new focus on areas such as

“wellness” – activities ranging from yoga to spas – as

well adventure activities such as diving and safaris and

cultural and educational tours.

Edie Rodriguez, chief executive of Crystal Cruises

says luxury travellers look for what she calls ECO –

“exclusivity, customization and options.” This means

there needs to be an offer tailored to each individual

traveller – recognizing their personal needs whether

dietary, health or cultural. Offering a range of options is

important to meet the traveller’s needs. Tour operators

and hotels need to be able to offer a variety of activities.

If a traveller books a wellness holiday, the chances are

consumers spend USD5,365 per trip, more than three

times more than the rest of the sample, who spent

USD1,690. When multiplied by the average number of

trips taken each year, the disparity between luxury and

standard travellers becomes even more stark. Luxury

consumers spend some USD30,208 per year on holidays

while the rest of the sample spend USD4,732 or, to put

it another way, the wealthier consumers outspend the

standard travellers by over six times (EyeforTravel Luxury

Travel Analysis, 2017).

This may explain the belief by many in the travel

industry that luxury travel accounts for up to a half

of spending in the entire sector. It also demonstrates

the enormous value the sector has currently and

in the future. We know that income and wealth

correlate with trips taken and travel spending, so it

is no surprise that luxury travellers are more valuable

to travel brands, although the gap is considerable.

What is perhaps more notable is that this gap is

going to accelerate and become more pronounced

if the forecasts for the overall luxury travel sector

come to pass, which seems likely given the economic

situation and shift to experiential spending among

Figure 28: Average Spending Per Trip in US Dollars Figure 29: Annual Value of Consumers Per Year in US Dollars

Source: EyeforTravel Luxury Travel Analysis, 2017Source: EyeforTravel Luxury Travel Analysis, 2017

$6,000

$5,000

$4,000

$3,000

$2,000

$1,000

$0Average spend per trip rest of sample

Average spend per trip luxury consumers

$5,365

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0Rest of sampleLuxury consumers

$30,208

$4,732

$1,690

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tourists have paid a reported USD20m each to visit the

International Space Station orbiting earth, including the

first such visitor, Dennis Tito, in 2001. Virgin Galactic, Blue

Origin and Elon Musk’s SpaceX are all planning to offer

sub-orbital space trips. SpaceX claims it will carry two

tourists on a trip around the moon in 2018.

More down-to-earth activities include immersion in art and

they will also want to mix this with sightseeing and

cultural activities too.

Some of the most popular activities for premium travellers

are explored in research by Resonance for its 2016

Future of Luxury Report. It found that luxury travellers are

constantly looking out for new, exciting experiences. For

the richest, these include trips into space. Seven space

Figure 30: Vacation Activities Participated in by Top 1% of US Consumers

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%Dining Engaging

with natureLearning

new thingsAttending

cultural events sights

Heath and fitness

Sightseeing Fun attractions

Visiting cultural

attractions

Shopping Nightlife

n Regularly n Occasionally

Source: Resonance, 2016

Table 5: Vacation Activities Participated in by Top 1% of US Consumers

regularly occasionally

Dining 76% 94%

Sightseeing 62% 91%

Learning new things 53% 90%

Visiting cultural attractions 45% 90%

Engaging with nature 40% 85%

Fun attractions 37% 85%

Attending cultural events and performances 37% 85%

Shopping 41% 83%

Health and fitness 38% 78%

Nightlife 23% 75%

Source: Resonance, 2016

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Resonance research shows that the top 1% are more

interested in fitness than other travellers and more

so even than the top 5%. Health and fitness was also

one of the top categories that the top 1% would like

to try engage in more. The report describes the trend

to “wellness” which includes fitness, health, healthy

eating, meditation and mindfulness as “conspicuous

non-consumption” (Resonance, 2016). This fits into the

culture, including hotels which feature the work of artists.

Resonance surveyed the top 5% income earners and

top 1% earners in the US about their holiday activities.

While the expected activities – dining and sightseeing

- topped the list, areas such as “engaging with nature”

and “attending cultural events and performances” also

scored highly.

Figure 31: Vacation Activities Enjoyed by US Luxury Travel Consumers

activities engaged regularly or occasionally Top 5% (n=1,659)

Top 1% (n=719)

Top us travellers (n=3,379)

Health & fitness

Working out 82% 81% 76%

Spa treatments 67% 76% 51%

Yoga 43% 49% 39%

Meditation 40% 45% 37%

Weight loss programs 32% 37% 32%

Medical treatments 31% 35% 29%

Figure 32: Chinese Millennial Luxury Traveller Motivations

Traveller trends in the next three years

Leisure travel

Exploring the world

Adventure travel

Cruises

Polar exploration

Road trip

Health & recovery

Honeymoon

Celebrations & events

Study

Golf

n Reasons for travel in 2015 n Reasons for travel in the next 3 years

Trend

0% 20% 40% 80%60% 100%10% 30% 70%50% 90%

82%68%

23%35%

16%22%

17%21%

12%9%

40%50%

26%28%

12%21%

11%12%

11%9%

7%5%

Source: Hurun Research Institute, 2016

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They value not only relaxation and comfort, but a period

of personal improvement beyond their everyday lives.

Abercrombie & Kent marketing director Lisa Warner

says the company’s customers are looking to get the

most out of their holiday and to get “under the skin” of a

destination and explore beyond the obvious.

“They’re looking for local interaction, to learn and gain

insight into their chosen destination, to gain access to

places and people that are not on the regular tourist

trail and to create memories that will last. “They enjoy,

appreciate and expect the finer things in life and a

holiday is an opportunity to relax and connect with

friends and family in style,” she says.

Travel agents can be especially important for luxury

consumers as they need flexibility in their travel

arrangements. This is not offered by online services

even if they do offer luxury products.

Richard Frampton from Hurlingham Travel explains:

“Though we don’t advertise ourselves as a concierge

service, people do want a bit more from us.

“We are going to make their meal reservations and

sometimes their spa treatments. We’ll contact the hotels

to say we’ve got a VIP coming so please make sure they

are looked after. That might mean making sure their

rooms are connecting and all the other things which

you just cannot do online.

“A lot of our clients book a holiday, then a business

meeting comes up and they have to change the whole

thing, and it is very difficult to do that online. They want

someone they can come to and chat to. I’ve had some

clients for twenty years, I booked them with their children

and now I am booking their children with their families.”

idea that the modern luxury consumer is switching

spending away from bling towards inner-directed

self-actualization.

Hurun’s survey of wealthy millennials in shows a variety

of motivations for international travel but some similar

growing themes. Leisure travel was the biggest reason

for international trips, though the respondents reported

this motivation as less important in the future. Instead

exploration and adventure were the big themes that

were growing, as was health and wellness. Exploring

the world, adventure travel, road trips, journeys to the

poles and health were all seen as more important in the

coming three years compared to their motivations for

travel in the preceding year.

It should be noted that the above is a snapshot of

a market segment and there can be great variation

between ages and markets. For example, in the case

of Japan, wealth and leisure time are overwhelmingly

in the hands of older consumers, meaning adventure

is less important with comfort and service more

emphasized and domestic travel and cruises

experiencing big growth in the country’s luxury travel

market (see Section 2.2.2 for more on Japan).

Nonetheless, there does seem to be a broad trend,

particularly at the top market to move towards new

adventurous experiences and to keeping healthy, with

the trends more pronounced at the very top of the

market.

4.2.1 what do luxury Consumers value most when it Comes to Travel?Today’s luxury consumers are using travel to explore

both the world and themselves. They seek different

things from their holidays, depending on their moods,

their intentions and their life stages.

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5.

The evolution of the “experience” as a driving force

in luxury travel will be an important trend for travel

operators over coming years.

“Luxury travel has evolved from being primarily

about the 5-star glamour and glitz to becoming far

more centred on experiential travel, something A&K

has specialised in for over 50 years,” says Lisa Warner,

marketing director at A&K. “Today’s affluent travellers are

far more interested in creating and sharing memories

based around unique encounters, sights or experiences

not available to the average tourist.”

She adds that with social media playing an increasing

role in our lives, travellers have become storytellers. “The

stories that resonate most amongst the luxury traveller

fraternity are those garnered from local interactions and

authentic experiences that truly enrich their lives and

that of those they are meeting and interacting with,” she

says.

In order to get to this, they are going further and

further and looking to more unique experiences. A

survey by Tourism Economics predicts that globally,

long-haul luxury trips will overtake short distance trips

by 2025 (Amadeus, 2016). This leap to farther flung

destinations is that today’s luxury travellers can be

lowered into volcanic magma chambers in Iceland,

camp in the African savannah or get court-side tickets

to Masters tennis matches. They are sitting through

talks in hotel conference rooms on art, cuisine and

philosophy from global experts. They are exploring

ever-more experimental wellness and health regimes.

They are staying in luxury hotels in European cities,

then spending the days in groups running through the

streets of these capitals, combining culture and fitness.

Luxury travellers are pushing new boundaries. Many

want to feel that they have “earned” their luxury

experience through some element of struggle or

danger, rather than simply having it handed to them

on a plate. This is in keeping with the need for the

emerging rich to feel that they are “worth” their new

wealth rather than being simply blessed with luck.

Luxury hotels and providers will need to cater for

this sense of responsibility by making sure they

have a purpose beyond simply making money. They

need to recognize their broader social role. There is

a bourgeoning trend to eco-tourism, such as luxury

hotel holidays in Borneo that fund the preservation of

the endangered natural habitats of orangutans. Luxury

hotels are increasingly taking heed of environmental

concerns, with some installing solar panels and

becoming carbon neutral. The Ramada Eco Beach

Resort in Australia uses an integrated power system

which is 50% solar powered and they have on-site

water recycling. Guests can see their own energy

consumption on monitoring systems in their rooms.

The hotel promises a “unique wilderness experience,

whilst having minimal impact on the surrounding

landscape.”

Luxury providers need to work hard to maintain the

individuality of their offers and make their guests feel

like they have experienced something unusual, special

and extraordinary. An extension of this is to extend

brands that already have this allure into the travel space.

Trends in Luxury Travel


Buzz Aldrin to come and use the observatory at Soneva

Fushi, with a dinner after, and inviting a famous glass

artist and a deep-sea diver. These talks give guests an

opportunity to meet each other.

He says a cocktail party for guests thrown by a hotel’s

general manager “can be quite naff.” But added: “If

you have it on a sandbank it becomes quite a good

experience, they can go swimming or interact at a

secondary level, not through a cocktail conversation

breaking the ice, because the ice is already broken.”

He said that encouraging interaction between guests

had helped him boost repeat business by up to 52%.

“A lot of that is people meeting each other on holiday

and coming back. You get emails saying our friends

are coming back, we are going to spend time with

them. That is important, that sense of community,

but it doesn’t mean you need a lobby. It is how you

curate that experience,” he told the New York Times

International Luxury Travel conference in December

(New York Times, 2016a).

An experience also lends itself to storytelling.

A narrative is vital for a luxury brand as it gives

authenticity and enhances the experience element.

Luxury holiday home rental service Thirdhome

has advertised for a “storyteller” to promote its top

properties on social media through words, photos

and videos. On the other side, many luxury travellers

enjoy sharing their experiences through review sites

and social media. These become important influencers

of perceptions about luxury hotels and providers and

need to be built into a brand’s story.

However, there is a danger that staying connected

to email and social media can interrupt the special

experience of a luxury trip and bring the traveller

back down to earth. Luxury operators need to strike a

balance between high-tech and high touch, offering

the right combination for the travellers they seek to

attract. For instance, the Red Mountain Resort in Utah,

USA offers wellness retreats and has introduced an

optional digital detox programme.

Several luxury brands that have opened hotels in key

locations. Italian luxury watch and jewellery brand

Bulgari has hotels in Milan, London and Bali and opens

new branches in Shanghai and Beijing this year. Armani

has hotels in Dubai and Milan. Versacci has Versacci

Palazzo hotels in Australia and Dubai. Maison Moschino

is a 65-room hotel in Milan. These hotels offer a three-

dimensional version of the brand experience and allow

visitors to live out the vision of the brand.

Another significant trend is an increase in luxury

consumers using travel agents. American Express

reported last year that there had been a 110% increase

in wealthy travellers planning to use retail agents in

2017 rather than OTAs. The company’s travel booking

data also revealed a 26% rise YoY in the length of stay

for advanced bookings among the top 20 international

destinations (Travel Market Report, 2016).

Claire Bennett, executive vice-president for American

Express Travel, said personalisation and streamlined

services are key motivators for luxury travellers, who

expect customised travel experiences. “Today, affluent

consumers are more knowledgeable, are often in

control of their travel experiences and, across all ages,

are in pursuit of curation, comfort and convenience,”

she said.

5.1 meeting People and Telling a storyWhile luxury travellers are often thought to value their

privacy, they are also looking to meet like-minded

people.

Sonu Shivdasani, founder of the luxury Soneva Fushi

and Jani resorts in the Maldives and Six Senses Resorts

and Spas, told a recent luxury travel conference that

hotels and providers need to offer both privacy and a

sense of community.

“Having big villas with privacy and a sense of

community is also important, though you don’t need

a big lobby, you can orchestrate opportunities where

people can meet each other,” he said.

He described inviting the second man on the moon,

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and desires of these travellers, which can be quite

different to travellers from the West and even from each

other.

5.3 Generational TravelMillennials are an increasingly important group of luxury

travellers whose needs must be considered, especially

as this is the core demography for Chinese luxury travel.

They are successful young business people, performers

and sports stars or the off-spring of wealthy families and

are already the largest demographic group by numbers

if not yet wealth.

They are environmentally aware and they tend to stay

longer and to interact more closely with communities

they visit. There are opportunities to target wealthy

millennial travellers with socially responsible travel and

to build links between them and local communities.

Hurun’s research into millennial luxury travellers

in China found that over half of the 525 young

people interviewed were the second generation of

wealthy families. An interesting finding was that they

see five-star hotels as standardised and lacking in

distinctiveness. This makes it hard for these hotels to

offer unique experiences. 42% of respondents said they

wanted to stay in a hotel with a unique brand style and

40% wanted an artistic design. Outside of booking with

a major hotel chain, the most popular accommodation

was a private boutique hotel followed by a cruise on

a yacht. A variety of hotel brands have recognized this

and a variety of boutique brands have been launched

by groups, such as Hyatt, Marriott, Hyatt and Wyndham.

37% also said they would consider short term vacation

rentals such as Airbnb (Hurun Research Institute, 2016).

Millennials expect a connected experience during their

luxury trips and use mobile apps as a form of digital

butler. For example, the Four Seasons app allows users

to check in and out of their rooms and to order room

service. But while millennials demand the ability to

bypass personal service through technology, many

luxury consumers expect a “high-touch” experience

with a strong degree of personal service. Some hotels

are offering an off-grid experience where people can

5.2 asia as the engine of GrowthOne of the biggest trends over the coming decade will

be the rapid growth of luxury outbound travel from

Asia. This growth is fuelled mainly by the top source

markets of China, India and Indonesia. Spending by

outbound Asian tourism will grow from USD260 billion

in 2010 to USD650 billion in 2020, accounting for 40%

of worldwide outbound consumer spending, according

to research from the Singapore Tourism Board in

association with Boston Consulting Group, and as noted

in Section 2.2.1 Chinese consumers alone will buy 44%

of the world’s personal luxury goods by 2025 according

to McKinsey (McKinsey, 2017; New York Times, 2017b).

Asian travellers are increasingly coming from second

cities in these nations and are not just spending on

cosmetics, jewellery and fashion, but increasingly on

events and experiences. Luxury destinations will need

to make sure they are well acquainted with the needs

viewpointMaria Pajares of Mason Rose gives her views on the

trends shaping luxury travel: “Geographically, there

are certain destinations which are proving very

popular such as Sri Lanka and Burma. Ibiza, although

not new, is currently seeing a surge in a more

sophisticated offering of 5-star accommodation

with a couple of exciting new luxury hotels about to

open including Nobu Ibiza Bay and Seven Pines. The

African continent continues to appeal – for example,

we’ve taken on an exciting new hotel opening later

this year in Zanzibar. We can see that many of our

hotels continue to invest in China and the Middle

East in terms of sourcing business.”

She adds that culture is key, especially with city

destinations. Access to cultural and sporting events

can be very attractive during the purchasing

decision-making process. She gives the examples of

Peninsula’s Pen Cities and Academies programme,

which “opens up a world of local possibilities offering

unique access and experiences of Forte Village’s

partnerships with Chelsea Football Club and various

sporting legends.”

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grandparents and children use luxury holidays as a

family re-union. Such groups often opt for home rentals,

chalets, cottages or cruises. The grandparents often

make the bookings as they have most time. Operators

offering such holidays need to be aware of the varying

technology needs of the different generations, by

supplying connectivity for the millennial family

members.

escape from connectivity and undergo a “digital detox.”

Operator Digital Detox Holidays offers device-free

holidays, such as the Cockatoo Hill Retreat Daintree,

Australia, which consists of “exclusive” tree lodges in the

Daintree Rainforest.

A buzzword that has become popular in luxury

travel is “multi-generational” travel, where parents,

Figure 33: Alternative Accommodation Options Considered by Millennial Chinese Luxury Consumers

Source: Hurun Research Institute, 2016 0% 20% 40% 60%10% 30% 50% 70% 80%

Private boutique hotel

Cruise/yacht

Private short-term vacation rentals, like Airbnb

Staying at the home of a friend/family member

63%

54%

37%

15%

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6.

Luxury travel is set for significant growth over the

coming decade. For the purveyors of premium travel

this is both a blessing and a challenge. Luxury implies

elegance and comfort but is also a rare pleasure that

is difficult to obtain. Luxury is never commonplace. As

luxury travel becomes more widespread, it risks losing

its mystique and allure. Luxury travel operators - hotels,

agents, cruise operators and other providers, must

maintain the distinctiveness of their offer while finding

ways to increase their share of this expanding market.

Many are well-placed to prosper if they can balance

that equation and increase turnover, sales and customer

numbers without damaging premium brand values.

Success in luxury travel will be all about balancing a

variety of difficult equations.

One will involve dealing with the paradox of choice. A

problem with the rapid expansion in the luxury travel

market over recent years is the plethora of options being

offered. This becomes confusing and complex which can

add stress to the process of booking a holiday.

One of the watchwords of luxury over coming years

will be simplicity – stripping out the many options

and making travel booking easy. But this crunches up

against the trend towards personalization and travel

tailored to the needs of the individual. That implies that

there will be millions of options so each traveller can

choose one tailored to their wishes.

Data analysis will help consumers thread their way

through the complexity. Digital services will learn

about the preferences and likes of consumers and use

algorithms to offer them the ideal selection of options

to suit their tastes. The growth of artificial intelligence

should enable this, though these are early days for

the new technology. AI powered apps such as Lola, a

start-up founded by Kayak founder Paul English, offers

to take much of the complexity out of booking travel.

But for all the talk of technological advances, the personal

touch is still vital in luxury. That’s why many high-spending

consumers still use travel agents. Finding the middle

ground between high-touch and hi-tech service is another

delicate balancing act for luxury travel providers.

Cementing relationships with frequent customers

will be vital. That means finding ways to expand their

involvement whether through encouraging them to

extend their trips for a longer time, to increase the

frequency of trips or to boost the amount they spend.

Offering ever more interesting and extraordinary

experiences is a way of creating this offer.

Players in luxury travel that manage to balance these

tensions can expect rich rewards from this market over

the next ten years.

Conclusion


meTh

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EyeforTravel’s proprietary data is constructed using

a composite of results from its consumer surveys

conducted in China, Germany and the UK. These

surveys were conducted using online panels

obtained in conjunction with marketing research firm

TapResearch and the respondents divided as luxury and

non-luxury travel consumers based upon their reported

annual household income.

The UK survey was conducted between 1st of June

2016 and 18th June 2016. It was conducted entirely

online. Overall 2,806 respondents began the survey and

2,268 completed the full survey. There was a qualifying

question where respondents who had not taken an

international or a domestic vacation within the last

12 months were disqualified from further questions

in order to have a group that could accurately answer

travel-related questions.

The German survey was conducted between 21st of

July 2016 and 31st July 2016. It was conducted entirely

online. Overall 2,944 respondents began the survey and

2,193 completed the full survey. There was a qualifying

question where respondents who had not taken an

international or a domestic vacation within the last

12 months were disqualified from further questions



The Chinese survey was conducted between 4th

January 2017 and 1st February 2017. It was conducted

entirely online. Overall 2,757 respondents began the

survey and 2,161 completed the full survey. There was

a qualifying question where respondents who had not

taken an international or a domestic vacation within the

last 12 months were disqualified from further questions



In total, there were 8,507 respondents who began all

of the surveys and 6,622 who completed the surveys.

Luxury travel consumers numbered 2,218 initial

respondents. After filtering to remove those who had

not taken at least one leisure journey in the 12 months

preceding the survey, there were 2,167 luxury travel

respondents, 1,853 of whom completed the full survey.

Luxury travellers were defined as those with household

incomes of approximately USD100,000 in local currency

and at purchasing power parity levels at the time

the survey was conducted. Purchasing power parity

conversion rates were taken from OECD figures for 2016

(the latest available conversion rates). For the UK survey this

was GBP70,000. For the German survey this was EUR70,000.

These were the highest income options available in the

surveys. For the Chinese survey, the cut-off point to be

defined as a luxury traveller was RMB200,000.

Not every question contains all three survey data as

changes in question methodology between surveys

at points made direct comparison inapplicable. At all

points the maximum data set available was used.

Methodology


refer

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es

80 Days, 2017. Data provided exclusively to EyeforTravel from 80 Days benchmarking of London luxury hotels.

Affluential, 2016. Experiencing Luxury - The Asian Traveller in 2016 [Online]. Available at: http://view.iltm.com/wp-content/uploads/2017/01/ILTM-Report-Experiencing-Luxury-The-Asian-Traveler-in-2016-2.pdf

Allied Market Research, 2016. Luxury Travel Market to Reach $1,154 Billion, Globally, by 2022 - Allied Market Research [Online]. Available at: http://www.prnewswire.co.uk/news-releases/luxury-travel-market-to-reach-1154-billion-globally-by-2022---allied-market-research-601293056.html

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Bloomberg, 2017a. More Countries Join the Euro-Area Recovery Bandwagon [Online]. Available at: https://www.bloomberg.com/news/articles/2017-08-16/euro-area-economic-growth-picks-up-pace-as-recovery-spreads

Bloomberg, 2017b. Here’s How the Euro Is Likely to Fare Against World Currencies [Online]. Available at: https://www.bloomberg.com/news/articles/2017-08-17/here-s-how-the-euro-is-likely-to-fare-against-world-currencies

Bloomberg, 2017c. Europe’s East Is Shining Brightly [Online]. Available at: https://www.bloomberg.com/news/articles/2017-08-04/eurozone-s-eastern-fringe-outshines-in-quest-for-prosperity

Bloomberg, 2017d. This Is What Elderly Millionaires Spend Their Cash on in Japan [Online]. Available at: https://www.bloomberg.com/news/articles/2017-07-17/older-and-a-lot-richer-japan-s-retirees-fuel-luxury-travel-boom

Bloomberg, 2017e. Thailand Wants More Tourists Who Act Like Australians [Online]. Available at: https://www.bloomberg.com/news/articles/2017-07-16/spendthrift-aussies-embody-thailand-s-new-strategy-for-tourism

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