Following a poor 2016 where global luxury travel spending growth slumped below recent trends, the sector is back on course in 2017 as wealth generation benefits from strong growth in key economies finds EyeforTravel’s The Global Luxury Travel Consumerreport.
The global luxury travel sector is back to strong growth in 2017, helped by stronger performances in key economies and soaring equities, following a disappointing 2016. Previously underperforming markets in Brazil, Canada and Russia have seen their luxury travel markets turn a corner in the last 12 months finds the report, whilst other major source markets of wealthy individuals have continued to expand.
The growth is global, with strong performances from key markets in North America, Europe and Asia-Pacific. Within this, the US and Japan, the two countries with the largest populations of dollar millionaires, are experiencing strong GDP, wealth and luxury travel spending growth, befitting both domestic and international travel. For the latter country, this has seen a long-term trend of declining outbound travel turn around in 2016 and 2017, with outbound trip growth accelerating out to +6.3% in the first half of 2017.
For luxury US travellers Western Europe is proving to be a big destination in 2017, with the UK experiencing a 25% growth in arrivals from the US. A similar theme can be found amongst luxury Chinese consumers, who still want to experience the cultural highlights of countries such as Frnace, Italy, Germany, Spain and the UK. The report notes that the Western European market is a star performer overall, as high arrivals growth from outside the region meets rapidly strengthening internal demand. The economies of France and Germany are growing at their strongest rates since 2011, Italy since 2010, and the Netherlands since 2007, and GDP growth is coinciding with soaring consumer confidence.
“We have seen several positive trends over 2017 for luxury travel, with broad-based economic growth globally, a weakening in the dollar, and the core luxury travel markets improving in outlook,” says Alex Hadwick, Head of Research at EyeforTravel. “For example, China underperformed in 2016, with capital outflows, government scrutiny of spending and instability in equities but 2017 has seen much better performance, with European and some Asian destinations seeing fantastic arrivals growth from the country. Another positive trend we are seeing is a diminishing concern from travellers in general and also luxury travellers about terrorism, with only very short term falls in arrivals following attacks in European destinations. Indeed the London luxury market barely seems to have taken a hit at all from these adverse events.”
Other underperforming markets in 2016 that are now in better shape in 2017 include Brazil, Canada and Russia. For both Brazil and Russia, difficult conditions helped domestic travel as their economies contracted but in late 2016 and out into 2017 outbound travel in both appears to have returned. Destinations recording growth in Russian premium bookings include the Caucasus, China, Thailand and Western Europe. For Brazil both ForwardKeys and the Brazilian Central Bank recorded returns to outbound growth in H1 2017.
The report notes that although equities have performed extremely well and boosted luxury consumer wealth and consequently travel demand in 2017, there are medium term risks from over-valuation. For example, US stocks are at valuations that have only been exceeded twice in 1929 and 1999.
This detailed report looks at the state of the overall market currently and breaks down individual country markets, luxury consumer behaviors and spending patterns, and gives you the major trends to look out for.
- Country analysis of the major luxury travel markets in Europe, North America, Asia-Pacific, and the Middle East, covering both developed and emerging economies.
- Unique proprietary data based on more than 2,000 luxury travel consumers.
- Behavioral analysis of luxury travellers, including lead times, device usage, booking patterns, and spending habits.
- Major trends and developments in the luxury travel market.
- Data taken and analysed from nearly 100 different sources.