Anita Manfreda, a senior lecturer in tourism at Torrens University in Australia, said that about 10 years ago, when she was working at Badrutt's Palace Hotel in St Moritz, Switzerland, she was amazed to learn that a guest had requested an elephant to be delivered as a birthday present to his wife. The hotel did just that, managing to get the elephant into the lobby.
This seemingly outrageous request speaks volumes about what luxury travel used to be, a symbol of wealth and power, expressed in grand displays of ostentation. Think millionaires and billionaires in lavish hotel suites and on private yachts, enjoying exclusive services that most of us would never dream of, let alone ask for.
American global management consulting group McKinsey defines luxury travelers as those willing to spend $500 or more per night on a room.
Luxury travel continues to grow. Thanks to changing demographics, concerns about sustainability, and a post-pandemic desire for social connection, luxury travel has become more personal and meaningful. And today’s luxury travelers aren’t always the ultra-wealthy.
Despite the cost of living crisis, luxury travel is booming. So what’s driving this growth and how are luxury travel trends changing?
Trillion-dollar industry
The luxury travel industry has shown remarkable resilience, even during the economic downturn and the COVID-19 pandemic. Globally, the industry is expected to grow from $1.4 trillion in 2024 to $2.2 trillion in 2030.
The Asia-Pacific region is leading growth with a compound annual growth rate of 8.6% (a measure of growth that assumes profits are reinvested) from 2024 to 2030.
In Australia, the trend is similar, with the luxury travel market set to generate $37.4 billion by 2023 and expected to reach $70 billion by 2032. This growth is driven by both affluent and younger customers. As Forbes points out, these travelers are often not millionaires, may not earn huge salaries or even own their own homes, but are willing to pay a premium for meaningful experiences.
And some people are spending big on trips to make up for lost time and opportunities during the pandemic — a trend that industry experts sometimes refer to as “revenge” and “splash” travel.
“We are seeing travel at all costs,” said one luxury travel industry observer, “where people are determined to have the experience they want, regardless of price.”
More and more consumers are prioritizing luxury travel experiences over other goods, including luxury brands.
Luxury has many meanings
Luxury travel today is about more than just luxury; it’s about spending money on meaningful experiences. Luxury travelers are willing to spend big on vacations that promise authenticity, wellness, and connection with people and nature.
Sometimes luxury travel means accessing something new, like a secluded natural environment or a deeply personal cultural experience. Sometimes it means something more professional, like appreciating the finer points of a rare bottle of wine, or visiting a site with a knowledgeable expert or celebrity guide.
Luxury travel used to be defined by price and status symbols, but today it’s about shareable stories (on social media and in real life) and experiences that align with personal values.
Towards healthy and sustainable values
With 17 years of experience working and researching luxury travel, Anita Manfreda says she has seen a wide range of luxury travelers. From humble retirees enjoying the fruits of their hard work to celebrities who send 32 pages of requests to hotels before they check in.
While older high net worth individuals from North America and Europe remain an important customer base, a growing proportion of luxury travelers are millennials.
millennials (those born between 1981 and 1996), Generation Z (those born between 1997 and 2012), and travelers from emerging markets like Asia and the Middle East.
Traditional hallmarks of luxury travel — like presidential suites and private islands — remain popular with high-net-worth individuals.
But more and more travelers are looking for cultural experiences, adventure or small, intimate group trips.
These travelers often choose low season and less visited destinations to avoid crowds. They are more interested in sustainable tourism.
The future of luxury travel lies in its ability to adapt to changing consumer values. Wellness retreats, slow travel (including by train), and sustainability-focused experiences are becoming core values in luxury travel.
In a hyper-connected world, modern luxury travel marketing is often associated with the idea of a digital detox. The opportunity to disconnect and immerse yourself in the moment has become a modern luxury.
Today, luxury travelers turn their trips into opportunities to explore and learn, reconnecting with the world, their relationships, and themselves.
