The general population of travelers continues to feed into the higher end of travel through upgrading their vacations to include more premium options. 67% plan to incorporate some element of luxury into their upcoming “main” vacation, similar to the 66% of affluent/high net worth travelers who do the same. Among the general population group of premium/luxury travelers, 39% are Luxury Engaged, who claim intent to include at least eight premium/luxury elements in an upcoming main trip.
While this “Luxury Engaged” group indicates they’d be willing to trade down in quality for some areas of travel, or even go into debt to include a luxury option on their trips, they are more exposed than traditional wealthy luxury travelers to a possible economic downturn. To keep them convinced, brands need to make them feel like they’ll be wrapped in the trappings of luxury. Moreover, they need to demonstrate that they can excel at personalizing their offerings to this group. This latter point is important, as personalization will likely remain an important demand as these travelers age and accumulate wealth, becoming the “typical” high net worth demographic in the future of luxury travel.
This report looks at the following areas:
- How the current economic landscape may affect premium travel
- What travel aspects are important for travelers to premiumize
- How the general population’s growing interest in and demands of luxury travel compares to high net worth travelers’
- How to reach the key segments of the general population interested in premium/luxury travel
- What travelers do to prepare for a trip with premium/luxury elements
- The aspects of a premium travel credit card worth paying for
- Which luxury hotel amenities are considered the most “luxury,” and the shortcomings that will prevent a guest from returning
- Attitudes toward luxury travel budgeting, personalization, loyalty and motivations
- How brands are innovating to appeal to both the general population and high net worth travelers
Engagement in luxury travel continues to grow, especially among the general population. Brands must address their needs to keep them engaged in the current economy.
Mike Gallinari, Senior Travel & Leisure Analyst
Market Definitions
For the purposes of this Report, Mintel has used the following definitions:
General population (Genpop): internet users aged 18+; this group is representative of the US adult population as a whole, and includes adults who may also fall into the Affluent/High-Net-Worth category
Affluent/High-Net-Worth (AHNW) consumers: internet users aged 18+ who have a total net worth of $500K-$999K/internet users aged 18+ who have a total net worth of $1 million+
Premium/Luxury traveler: a traveler that indicated they planned to include to book at the luxury- or premium-tier for at least one of the following options during a trip in the next 12 months:
- Domestic flight
- International flight
- Hotel
- Short-term rental
- All-inclusive resort
- Meals/dining out
- Car rental
- Live event
- Cruise
- Day tour/activity
- Group tour/multiday excursion
- Hands-on learning experience
Collapse All
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EXECUTIVE SUMMARY
- What you need to know
- Market predictions – scenario 1: mainstream view
- Market predictions – scenario 2: tariff turmoil
- What consumers want & why
- Opportunities
- Open up access to premium travel by promoting standard-tier habits
- Leverage partnerships to position premium/luxury travel as part of a larger elevated lifestyle
- Push the boundaries of high-end luxury to contrast AHNW travelers from dabbling Genpop
-
MARKET DYNAMICS
- Market context
- Consumers see premium and luxury options as accessible
- Travel is a top spending priority in households
- Graph 1: top three financial goals for 2025 (rank), 2024
- Luxury travel remains resilient despite a slowdown in luxury goods spending
- Market drivers
- Higher costs on everyday goods from tariffs may cause the average traveler to stick to the basics
- Travel providers face different levels of exposure to tariffs
- Consumers remain cautious as they brace for tariffs
- A weakening dollar can prop up domestic luxury…
- Graph 2: US dollar index, 2024-25
- …and creates opportunities for the luxury travel lifestyle closer to home
- Declining travel prices can make upgrading an option to general travelers
- Increase in US millionaires shores up the luxury travel market
-
CONSUMER INSIGHTS
- Consumer fast facts
- Consumer fast facts, continued
- The premium and luxury traveler
- Upscale travel elements are in demand, regardless of affluence
- As “luxury” becomes more common, providers need to focus on quality, addressing trends
- Graph 3: definition of “luxury,” Genpop travelers vs AHNW travelers, 2025
- Genpop luxury travelers skew younger, more diverse than AHNW population
- Graph 4: premium/luxury traveler demographic distribution, Genpop vs AHNW, 2025
- Premium/luxury brands have to navigate different takes on luxury
- Graph 5: premium/luxury intent, by travel element, Genpop vs AHNW, 2025
- Genpop sevice level tiers planned for an upcoming “main” vacation
- Graph 6: highest level of service planned, by element, Genpop, 2025
- Tier definitions
- Fairmont re-envisions activities in a luxury setting
- Genpop more expectant of economy tiers, but aren’t married to their choices
- Graph 7: economy/value intent, by travel element, Genpop vs AHNW, 2025
- Luxury traveler segments
- Luxury Traveler Segments
- Luxury Engaged – 39% of premium/luxury travelers
- Luxury Engaged demographic profile
- Luxury Pragmatists – 22% of premium/luxury travelers
- Luxury Pragmatists demographic profile
- Luxury Opportunists – 20% of premium/luxury travelers
- Luxury Opportunists demographic profile
- Luxury Disengaged – 19% of premium/luxury travelers
- Luxury Disengaged demographic profile
- Selling luxury comes down to value, but segments need to be approached differently
- Graph 8: definition of “luxury,” by segment, 2025
- Engaged drive demand for all-encompassing luxury; others need convincing
- Premium and luxury options
- Luxury Engaged look to all sector for luxury, give brands opportunity to drive tastes
- Graph 9: premium/luxury intent for “main vacation,” by element, Luxury Engaged vs all, 2025
- Pragmatists are good premium targets, especially for hoteliers
- Graph 10: premium intent for “main vacation,” by element, Luxury Pragmatists vs all, 2025
- Luxury Opportunists may splurge for comprehensive options
- Graph 11: premium/luxury intent for Luxury Opportunists’ “main vacation,” by element, 2025
- Luxury vacation prep
- Anticipation of luxury drives Genpop travelers to prepare for their opportunity to experience an affluent lifestyle
- Graph 12: prep activities for “main” vacation, Genpop vs AHNW, 2025
- Kimpton has style for lending
- Travel messaging can help BPC brands attract younger consumers
- Graph 13: prep activities for “main” vacation, by gender and generation, 2025
- Create conditions appealing to the Luxury Engaged who plan to show off on social media
- Graph 14: prep activities for “main” vacation, Luxury Engaged vs all, 2025
- Convince Pragmatists to add to their travel prep routine
- Graph 15: prep activities for “main” vacation, by segment, 2025
- Credit card perks
- AHNWs will pay annual fees if the value of the associated perks (and conveniences) is greater than the cost
- Graph 16: travel perks worth paying an annual fee for, Genpop vs AHNW, 2025
- Seeing opportunity, Citi re-enters the premium travel card landscape
- Work with Luxury Engaged’s goals to maintain elements of luxury throughout their lifestyle
- Graph 17: travel perks worth paying an annual fee for, Luxury Engaged vs all, 2025
- American Express connects luxury lifestyle with travel perks
- Luxury Pragmatists scrutinize cards, which can introduce them to associated brands
- Graph 18: travel perks worth paying an annual fee for, Luxury Pragmatists vs all, 2025
- Luxury lodging amenities
- Applying luxury principles to Genpop travelers will exceed their expectations
- Graph 19: hotel amenities considered “luxury,” Genpop vs AHNW, 2025
- Access to experiences can spur new luxury travelers to consideration
- Methodology
- Luxury Engaged aren’t as concerned with opulent surroundings, but want the luxury vibe
- Graph 20: hotel amenities considered “luxury,” Luxury Engaged vs all, 2025
- Luxury is well-positioned to take advantage of special interest and event travel
- Luxury stalwarts maintain an advantage with Pragmatists and Optimists
- Graph 21: hotel amenities considered “luxury,” segments vs all, 2025
- What turns luxury guests away
- Genpop are more forgiving of hoteliers that miss the mark on luxury, for now
- Graph 22: reasons not to return to a luxury hotel, Genpop vs AHNW, 2025
- Luxury Engaged are more stubbornly attached to being in the presence of luxury
- Graph 23: reasons not to return to a luxury hotel, by segment vs all, 2025
- Deliver to Opportunists, then remarket across the portfolio
- Graph 24: reasons not to return to a luxury hotel, Luxury Opportunists vs all, 2025
- Attitudes toward luxury travel
- Payment services can connect with Genpop travelers by being a travel cheerleader
- Graph 25: attitudes toward luxury travel budgeting – any agree, Genpop vs AHNW, 2025
- Expertise in lower tiers can help luxury providers bring in Luxury Engaged and Pragmatists
- Graph 26: attitudes toward luxury travel budgeting, by segment, 2025
- Demand for personalization will make it a more intense focus area in luxury in the future
- Travel advisors need to demonstrate the value of human expertise
- Graph 27: attitudes toward personalization – any agree, by segment, 2025
- Disney caters its theme park experience for the luxury market with its Private VIP Tours
- Build brand loyalty with the Genpop now, while using deals to buck current AHNW loyalty
- Graph 28: attitudes toward branding and loyalty – any agree, Genpop vs AHNW, 2025
- Stay involved with the Luxury Engaged to solidify future loyalty
- Graph 29: attitudes toward branding and loyalty – any agree, by segment, 2025
- United MileagePlus bonuses encourage sustained interaction
- Promote how luxury options enhance popular vacation motivations and activities
- Graph 30: attitudes toward vacation trends – any agree, Genpop vs AHNW, 2025
- Focus messaging for upgrades toward Luxury Engaged travelers
- Graph 31: attitudes toward vacation trends – any agree, by segments, 2025
- Go beyond weddings and target the vow renewal crowd
-
INNOVATION AND MARKETING STRATEGIES
- Launch activity and innovation
- Themes emerge in luxury travel as brands experiment
- Redefining luxury
- Chase sets a new bar for lounges, and erects fences around them
- Reserve Suites go beyond the premium level to cater to luxury cardholders
- Domestic carriers’ tentative return to first class widens gap with international airlines
- Elevating the brand
- JetBlue promotion helps travelers associate the carrier with premium
- Pandemic winner Choice pivots with the times
- Leaning on timeless luxury
- Pan Am throwbacks could propel it to future luxury consideration
- Luxury rail can help increase slow travel’s popularity
- Breaking out of traditional playing fields
- Four Seasons leans on strengths to venture into the seas
- Louis Vuitton hotel to make a statement about holistic luxury
- Marketing and advertising
- Four Seasons leans into the influence of pop culture
- Fairmont focuses on connection
- Fairmont Presents: Make Special Happen
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APPENDIX
- Market definition
- Consumer research questions
- Consumer research methodology
- Generations
- Abbreviations and terms
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