LUXURY TRAVEL MARKET ANALYSIS

Market Challenges And Opportunities

Global Luxury Travel Market- Drivers

Increasing disposable income

Increasing disposable income especially in emerging economy such as India is expected to drive the global luxury travel market growth during the forecast period. According to the Organization for Economic Cooperation and Development,in 2022, the global middle class populace is projected to increase from 1.8 billion in 2009 to 4.9 billion by 2030. Consumer spending on travel across India amounted to over U.S. $ 0.27 trillion  in the end of fourth quarter of 2022.

Increasing adoption of digital technology, use of internet, and high presence of people on social media platforms

Increasing adoption of digital technology is expected to boost growth of the market. Increasing use of internet and high presence of people on social media platforms also aids the market growth. Market players are focusing on capitalizing the social media presence to expand their consumer base and to strengthen consumer relation. Usage of internet allows consumer to compare brands, and offers several choices. Moreover, user-generated travel content is more influential over conventional advertising. Increasing appeal for travel storytelling, owing to platforms such as Instagram and various blogging sites is also expected to drive the market growth.

Therefore, increasing use of internet and social platforms contributes to growth of the global luxury travel market during the forecast period. For instance, according to the India Brand Equity Foundation (IBEF), in November 2022, India has experienced a boom in internet and smartphone penetration in the recent years. Driven by the ‘Digital India’ programme, the number of internet connections in India in 2021 increased significantly to 830 million. Out of the total internet connections, ~55% of connections were in urban areas, of which 97% of connections were wireless. The smartphone base has also increased significantly, and is expected to reach 1 billion by 2026.  All this factors helped India’s digital sector, and it is expected to reach US$ 1 trillion by 2030.

Global Luxury Travel Market- Restraint

High cost and less autonomy

Luxury vacations on  foreign land, the reality of luxury is very expensive, and is out of budget for middle class people. Most of tour companies have a pre-existing set of options to choose from while travelling such as from shore excursions to menu plans.  This can be tiresome to a traveller who is accustomed to create their own itinerary. By reducing the cost and autonomy can counterbalance this restraint.