CANNES, France -- Luxury travel and the growing emphasis on
experiences over things has created an ecosystem worth $1.54 trillion a year, a
size comparable to the GDP of one of the world’s top 15 economies, according to
a new report.
The study, conducted by Barton Consulting and Wealth-X for
the International Luxury Travel Market, claims to be the first to actually
measure what it calls the “global luxury travel ecosystem,” or the collection
of experiences related to travel, such as food and drink, cultural activities,
wellness, sporting events, performing arts and outdoor pursuits.
Its authors said it underscores the need for travel advisors
to expand their services beyond the traditional accommodation and air bookings.
“The reason why this ecosystem is so important to the luxury
travel industry,” the report said, “is that more and more of these wealthy
individuals are seeking curated travel adventures tailored by advisors who know
them well, know what they care about and are passionate for.
“Increasingly, they are needing travel designers and those
in positions of influence in destinations to open their eyes to the full
potential of these places. They seek variety and authenticity, and more and
more of them are seeing a luxury resort as a springboard. Instead of
identifying a ‘luxury hotel’ as an end in itself, they are using it as a
gateway to experiences that, until now, many travel advisors may not have
considered part of their role.”
The $1.54 trillion is exclusive of lodging and airfare, and
the report does not detail which experiences might or might not be
commissionable. The largest spend is on food and drink, but other more
potentially commissionable services, such as cultural activities and wellness,
also represent a sizeable portion.
At the same time, the report underscores how much the
wealthy contribute to the traditional travel economy. According to Wealth-X,
there are 22.8 million people in the world with a net worth of more than $1
million.
“Travel is one of the most important sectors of spend for
the ‘$1M-plus club,’” the report states, adding that high net worth individuals
spend on average about $30,000 per year on travel, primarily in the luxury
segment. Of the $1.41 trillion spent annually on lodging and air travel, about
36% comes from that sector.
To size the broader ecosystem exclusive of air and lodging,
Barton said it used a combination of proprietary data on wealthy individuals
from Wealth-X, including population, wealth and interests as well as
statistical insight from industry sources on ecosystem activities.
The activities were sized by sourcing industry data on
annual revenue and statistics on international inbound tourism in the top 50
most visited countries. Using secondary data on tourism contributions to these
economies, Barton said it was able to estimate the contribution to these
activities from international tourists. It then estimated the likely
contribution made by the 22.8 million individuals in the world who Wealth-X
estimates have a net worth of $1 million or more.