The luxury travel industry is expected to grow at a compound annual growth rate of nearly 7% between 2017 and 2021. Just look at Virtuoso , a bespoke luxury travel agency network: This company reported revenue growth of almost 90% in just five years, with a growth of more than $11 billion between 2013 and 2018.
The definition of “luxury travel” is subjective and has greatly evolved over the years. It is not just about staying at high-end resorts or having access to the best, most exclusive experiences; luxury travel is now about self-improvement and personal fulfillment.
Needless to say, it’s an exciting time to be in the travel industry. As the founder and CEO of a platform for tailor-made luxury travel, I’ve seen that customer research has been of paramount importance both on the supplier and consumer sides.
Among some of this research, I’ve found that it is not solely the ultra-rich who are driving this growth. There is an array of consumers taking luxurious vacations who might change the way you imagine the modern luxe traveler. Below, I’ve outlined three key demographics that comprise portions of the luxury travel market (along with a few of my tips on how you can reach them).
Millennial Luxury Travelers
There’s a lot of talk about millennials, the generation that was born in the age of technology and innovation. According to a study by ITB Berlin and IPK International, more than half of international luxury trips are taken by this demographic. The group tends to be more active travelers and spend more of their discretionary income on experiences and crave authenticity.
As for discovering, planning and booking, I’ve found this demographic tends to use technology that can give them access to travel experts who are local to the destination. Therefore, I believe leaders looking to target millennials planning luxury vacations should aim to provide a frictionless, digital-first experience as they book their plans.
Not only is the planning experience a key factor in reaching the millennial luxury travel market, but also authenticity. Content is key when it comes to building trust with these luxe travelers. Work on your storytelling abilities on social media, and craft authentic content that sparks intrigue and promotes share-ability of their could-be experience. Create a content strategy for your company blog and social media channels to ensure you have new (and genuine) content shared regularly.
Women Luxury travelers
There’s a new generation of successful women who love to travel solo. Numbers reported by luxury travel companies including Abercrombie & Kent, Black Tomato and REI confirm the rise of the solo female luxury traveler. According to Skift, “women-only wellness retreats are the new luxury.” These travelers care about staying healthy and at peace, as well as having consistent and flawless service from start to finish.
In my experience, this group tends to rely heavily on word-of-mouth recommendations and online reviews for new services, destinations and experiences. This isn’t new; more and more people are beginning to trustonline reviews as much as recommendations from friends. But when it comes to this specific group of luxury travelers, I’ve found that women traveling alone want to be able to trust the brands they use and feel safe while traveling. Implement a strategy to monitor and manage online reviews across review websites and self-owned channels to reach this group. And if someone leaves you a negative review, view it as a learning experience to respond professionally and address the issues they pointed out.
Experienced Luxury Travelers
Based on my observations while working in the luxe travel industry, this evergreen and growing segment tends to include Generation Xers and baby boomers. These groups are not new to traveling in luxury; I’ve found members of these generations tend to have more set tastes and preferences and are likely to be interested in more traditional luxury travel experiences.
Being experienced with this type of travel, I believe Gen Xers and baby boomers likely understand the importance and value of engaging an in-destination bespoke luxury travel expert during the planning process for unprecedented access to highly rated restaurants, hospitality and experiences.
These demographics are also less likely to be influenced by online advertisements than millennials, so consider marketing to them in more than one way to gain good exposure. For example, you might try reaching them through TV commercials or by sharing editorial reviews in travel columns of publications popular among the specific groups you’re interested in.
Without a doubt, the luxury travel market is ripe for disruption, and I believe the businesses that will emerge and thrive will focus on leveraging intuitive technology products that empower the combination of extraordinary human expertise, curation, unmatched access and personal touch. Ultimately, the companies that most deeply understand the changing needs and expectations of those who are truly taking luxury vacations will not only be able to capitalize on this growing opportunity, but also shape up the future of modern luxe travel.