China, India and Russia will account for a progressively larger percentage of worldwide luxury travelers, according to a report released by the International Luxury Travel Market.
Additionally, nature-oriented destinations such as Australia and New Zealand and culturally dynamic places like Israel and Peru will gain popularity as younger luxury travelers favor authenticity over opulence, the ILTM said in its “The Future of Luxury Travel, A Global Trends Report.”
The report used results from a survey conducted by Horwath HTL. Examples of more “authentic” accommodations included Costa Rica “eco-lodges” and Morocco riads, traditional homes with central courtyards.
With China estimated to account for as many as 100 million outbound tourists by 2020, travel professionals would be wise not to underestimate the wealth of knowledge among that country’s richest travelers, according to Simon Mayle, marketing manager at the ILTM.
In addition to targeting destinations such as Patagonia and parts of Africa, Chinese travelers are more likely to travel with multiple generations of family, driving up demand at resorts with villa-type accommodations and connected rooms.
“You have to factor in the level of sophistication of the Asian outbound travelers and know what they’re looking for,” said Mayle. “The assumption is that they’re only traveling within Asia and are only interested in spending money on shopping.”
The 26-page report, culled from surveys conducted through a combination of focus groups in New York, London and Singapore as well as interviews with luxury travel group executives, is the first of its kind from the ILTM, which produces a luxury trade show in Cannes, France, every December and another in Asia each June.
Overall, more than 40% of luxury travelers surveyed said their next destination would likely be in Europe, with traditional favorites France and Italy atop the list there.
Asia-Pacific and the Middle East/Africa were cited by 27% and 18% of those polled as their next destination, with locations like the Maldives, French Polynesia, Turkey and the United Arab Emirates gaining favor among the wealthy.
The Americas were listed by 8% as their next destination, as U.S. inbound travel has been cut by more stringent security requirements in the past decade, the report said.
The ILTM’s definition of luxury travelers ranged from the super rich — the approximately 90,000 people worldwide with a net worth of at least $30 million — to the “accessible” luxury traveler, which was defined as those earning at least $100,000 a year.
The ILTM estimated that about two-thirds of luxury travelers make at least four trips a year, with the average trip length at 10 days, and that almost a quarter of the sector spends at least $20,000 per trip. More than half of all luxury travelers are between 45 and 54 years old, though the 35-to-44-year-old segment is growing at a faster rate.
As for accommodations, about 1% of the world’s approximately 20 million hotel rooms qualify as “luxury,” where room rates are typically four times that of an upscale chain like Hilton and 11 times that of a midlevel brand like Europe’s Novotel, the ILTM said.