Luxury Travel Market Registers Significant Growth

After a slack in 2009 and a slight recovery in 2010, the global luxury travel market recorded a strong growth in 2011-2012. One of the key drivers of this growth was the increasing number of high net worth individuals (HNWIs) globally, primarily in the BRIC countries. This growth in global luxury travel is expected to continue over the forecast period to 2017.

Key highlights of the report are:

• Luxury hotel companies around the world are expected to focus on achieving operational efficiency, reducing spending on customer services that offer little value, developing the use of mobile technology, and targeting high-value customers. Luxury hotels are increasingly using mobile technology to enhance value and transforming how they interact with customers. In 2012, leading luxury hotel brands had mobile websites and offered mobile applications.
• Most leading global luxury hotel chains are based in the US, and the country is also the largest source market in the global luxury hospitality sector. Cities in the US are among the leading, and fastest- growing tourism destinations. For instance, Washington DC is one of the fastest-growing global tourism destinations, while New York is among the largest in terms of inbound tourist volumes. Other cities that continue to report good growth in the travel and accommodation industries include Chicago, San Francisco and Los Angeles.
• During the review period, the luxury hospitality sector in the Asia-Pacific region faced major challenges. Natural disasters in 2011, including the earthquake in Japan in March and unprecedented floods in Thailand, led to an overall decline in the performance of the hotel market in the region. Major economies in the Asia-Pacific region have recorded economic slowdowns over the past two years. Despite these challenges, the luxury hospitality industry in the Asia-Pacific region registered a significant growth of 18% in 2010 and 11% in 2011.
• During the review period, the European hospitality industry recorded muted growth, led by uncertainty due to the sovereign debt crisis. However, major cities in Western and Central Europe and the Nordic countries continued to see growth. Higher growth was recorded in 2011 as compared to 2010, despite the economic uncertainty in Europe. In Western Europe in particular, the luxury hospitality segment achieved growth of 9% in 2011. The European region experienced an overall increase in RevPAR and ADR in 2012, although the occupancy rate is expected to remain largely unchanged in 2013.