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Luxury Tourism Market Size
Luxury Tourism Market size valued at USD 20 billion in 2022 and is projected to grow at over 15% CAGR from 2023 to 2032. Driven by a growing demographic of affluent consumers in the Asia Pacific.
The number of well-off people in Asia Pacific has increased in recent years on account of favorable government initiatives, which have improved economic scenarios and raised literacy rates in the region, bolstering the demand for recreational and leisure activities such as luxury tourism. The new age of wealthy and highly educated consumer base is more inclined towards convenient, comfortable, and luxurious travel. These preferences now primarily influence the purchasing decisions of travelers, and the global tourism sector is increasingly paying heed to these tastes.
Recently, the government of India rolled out several initiatives such as rationalization of port fees, infrastructure upgradation, and granting priority berthing to cruise ships to boost its cruise tourism sector.
| Report Attributes | Details |
|---|---|
| Base Year: | 2022 |
| Market Size in 2022: | USD 20 Billion |
| Forecast Period: | 2023 to 2032 |
| Forecast Period 2023 to 2032 CAGR: | 15% |
| 2032 Value Projection: | USD 150 Billion |
| Historical Data for: | 2018 to 2022 |
| No. of Pages: | 350 |
| Tables, Charts & Figures: | 325 |
| Segments covered: | Type, Tour Type, Generation, Standard |
| Growth Drivers: |
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| Pitfalls & Challenges: |
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Luxury Tourism Market Trends
Overall, the tourism sector is highly sensitive to geopolitical issues, with travelers generally avoiding destinations that have even a slightly dented image around their stability. A nation’s general domestic security situation and political stability directly dictates its status as a travel destination. Concerns such as ongoing protests, political strikes, and conflicts pose as key challenges for visitor engagement and tourism development, especially when it comes to providing luxury experiences.
Luxury Tourism Market Analysis
With respect to the generation, the luxury tourism market size from baby boomers segment is expected to expand at a CAGR of 20% through 2032, fueled by growing preference of baby boomers to travel with family and friends. This generation typically spends more on luxury tourism to maintain good health, relax, and socialize. The people falling in this group are wealthier, have more free time than other generations, and are more inclined to spend more on leisure. They travel an average of four to five times annually, which is a great driving force for the market.
Based on type, the luxury tourism market share from cruises yachting & small ship segment dominated for USD 4 billion in 2022, propelled by increasing consumer spending on ocean, and underwater exploration holidays. Ocean and beach holidays are synonymous with luxury, and with traveler preferences increasingly moving towards having their own private bubble due to COVID-19, yachting and small ship cruises are becoming more popular. Having been couped-up in their homes, people are more interested in visiting new exotic destinations both on board and at sea.
The growth can also be attributed to increasing consumer inclination towards water-based adventure sports such as kayaking, stand-up paddleboarding, diving, cruising yachts and small craft, hiking, snorkeling, and camping, among others.
Based on standard, the luxury segment held over 65% of the luxury tourism industry share in 2022, owing to increasing spending trend among millionaires on culinary and adventure tourism. As per Netherlands-based CBI Ministry of Foreign Affairs, 3-5% of European tourists are purely visiting for culinary experiences. A growing portion of the global population is spending on trips to more exotic locations to have more opulent experiences.
Experts are comparing such trips to the Grand Tours of old age, where many people took extended luxury tours to explore historical infrastructure, nature, local culture, and food.
Regionally, the North America luxury tourism market accounted for USD 2 billion revenue in 2022, led by the growing spending power of millennials. Meanwhile, the increasing disposable income of baby boomers is also creating a vast customer pool for the region’s industry. The presence of lavish hospitality brands such as Hyatt, Marriott, and the Hilton among others, further helps the scenario by attracting more luxury travelers. In November 2021, Hyatt acquired Apple Leisure Group, a provider of luxury resort-management services in North America.
As per the U.S. Department of Commerce, international arrivals to the U.S. increased to 22.1 million in 2021, resulting in increased spending by international visitors, reaching USD 81 billion.
Luxury Tourism Market Share
Some of the leading companies operating in the market include
- National Geographic Expeditions, LLC
- Abercrombie & Kent USA, LLC
- Butterfield & Robinson Inc.
- beyond
Many companies in the field are prioritizing mergers and acquisitions to extend their global footprint.
For instance, in June 2022, Abercrombie & Kent USA, LLC, an award-winning luxury travel firm, acquired Crystal Cruises, a luxury cruise vessels firm, and its luxury cruise vessels Crystal Serenity & Crystal Symphony.
Impact of COVID-19 Pandemic
The COVID-19 pandemic drastically impacted the luxury tourism industry on account of tightened travel restrictions and economic slowdown. According to reliable estimates, it resulted in a 72% decline in international tourist arrivals in 2020 and 71% in 2021 as compared to 2019. However, the industry is witnessing a recovery trend in the post-COVID era due to favorable government initiatives focused on encouraging tourism.
For instance, in August 2021, the UK government invested in the construction of the Greenock cruise ship visitor center as part of a £19.2 million (~$2.36 million) development program to attract tourists and crew from the most luxurious vessels to Inverclyde, Scotland.
The market research report on luxury travel includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD million from 2018 to 2032, for the following segments:
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Market, By Type
- Customized & Private Vacations
- Celebration Journeys
- Adventure & Sport travel
- Safari
- Cruises Yachting & Small Ship
Market, By Tour
- Solo
- Group
Market Size, By Generation
- Millennial
- Generation X
- Baby boomers
Market Size By Standard
- Luxury
- Ultra-Luxury
The above information has been provided for the following regions and countries:
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Russia
- Asia Pacific
- China
- India
- Japan
- South Korea
- Southeast Asia
- Singapore
- Australia
- Latin America
- Brazil
- Mexico
- Argentina
- Peru
- Middle East & Africa
- GCC
- South Africa
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