Luxury travel spending in 2023 expected to rise as wealthy clients set new records for expensive trips
One of the first segments of global travel to resume in strength after Covid-19 pandemic, luxury travel does not seem to be running out of steam at all as reports say that according to most tour operators, higher spending on luxury travel will continue in 2023 as high net worth clientele continue to break records for expensive travel.
The global luxury market is set to expand to 500 million consumers by 2030, up from 400 million in 2022, a 21 pc growth, says a report by analyst firm Bain & Co. It cites high savings rates and an increase in luxury consumers around the world as the two main factors propelling strong high-end consumer purchasing.
It adds that travel trends analysis published recently estimated that high-income customers have excess savings of USD 1.7 trillion in the US. This rise, together with wage growth, is allowing travel expenditures to continue to expand despite the economy’s instability.
Travel company Virtuoso estimates its revenues would increase by 91 pc in this year compared to last year. The company also cites the need to prioritise making up for lost time due to the pandemic and the return of Chinese purchasing power after China‘s reopening as two other important factors for the upward trend in spending.
Bain & Co is not the only one to be highly optimistic about the future. In a survey on travel trends released recently, Bank of America reported that despite the highest income groups’ overall savings levels remaining higher than in 2019, wage and salary increases as well as monthly bank account balances have decreased.
According to the research, higher-income households are experiencing the highest increases in unemployment while also experiencing the slowest pay growth. As a result, their discretionary expenditure growth is falling behind that of lower and middle-income households.
The survey said that desire to make up for time lost during the epidemic and surplus money, according to the statement, continue to be among the main drivers extending travel’s high-end spending streak, even though inflation continues to significantly drive up prices for hotels, travel experiences, and other travel costs.
According to reports, the average luxury spend has increased by 40 pc this year, and first-quarter sales in 2023 are up 100 pc over the same period in 2022. For instance, by the end of Q1 2023, Red Savannah, a luxury custom travel supplier and villa specialist, had experienced the biggest rise in average spend in its history of 27 pc over 2022. High-end travel expenditure was up 10 pc to 20 pc this year, luxury travel specialists Remote Lands in Asia was cited by media as saying.
