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US Luxury Travel Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Luxury Travel market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Key points included

  • Younger travelers still want to engage with luxury
  • Individual attention takes the form of streamlining, immersion
  • The general population wants to show off their upscale trips

Covered in this report

For the purposes of this report, Mintel has used the following definitions:

This report defines “luxury travelers” as internet users aged 18+ who have had at least one of the following experiences while traveling in the past year, and plan on taking a trip that includes at least one of the following experiences in the next 12 months:

  • Domestic or international flight in a premium service class (eg first, business or executive class)
  • Flight on a private or chartered aircraft
  • Overnight stay in a premium/luxury hotel
  • Overnight stay in a luxury room/suite in any class of hotel
  • Overnight stay in a high-end all-inclusive resort
  • A cruise on a premium/luxury cruise line
  • Rental of a luxury car brand while traveling
  • Purchase of a luxury excursion package
  • Purchase of VIP tickets to an event while traveling
  • Employment of travel agent/advisor that caters to luxury travel

Expert analysis from a specialist in the field

Written by Mike Gallinari, a leading analyst in the Travel & Leisure sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The luxury travel market is enjoying an overall high level of global wealth. However, economic headwinds in important countries are creating difficulties for international luxury tourism, which may mean an emphasis on domestic luxury tourism is necessary. Meanwhile, the highest net worth travelers are responding to providers that can streamline travel and provide unique destinations and experiences, while the general population see luxury as a way to relax, escape, and show off to their friends Mike Gallinari
Travel & Leisure Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • Luxury among AHNW consumers
            • Wealthier consumers should be the focus
              • Figure 1: Instance of luxury experience while traveling, past five years, general population vs AHNW, May 2019
            • Wealth leads to a different view of what luxury is
              • Figure 2: Attitudes toward luxury, general population vs AHNW, May 2019
            • AHNW luxury is focused on the individual
              • Figure 3: Qualities of a luxury travel experience, affluent/HNW vs. all, May 2019
            • Individual attention takes the form of streamlining, immersion
              • Figure 4: Opinions of luxury experiences, by value of investable assets, May 2019
            • Luxury among the general population
              • Younger travelers still want to engage with luxury
                • Figure 5: Luxury travel plans – CHAID – Tree output, May 2019
              • The general population wants to show off their upscale trips
                • Figure 6: Attitudes toward luxury travel – Select items, by generation, May 2019
              • Travel as a cure
                • Figure 7: Attitudes toward wellness, by value of investable assets, May 2019
              • What it means
              • The Market – What You Need to Know

                • Affluent, High Net Worth are worth focusing on
                  • Target demos are inclined to travel
                    • Economic factors support luxury travel demos
                      • Focus inward for the time being
                      • Luxury Traveler Overview

                        • Luxury travel is popular with all, but AHNW should be the focus
                          • Figure 8: Instance of luxury experience while traveling, general population vs AHNW, May 2019
                        • Consistent luxury travelers
                          • Figure 9: Share of consistent luxury travelers, general population vs AHNW, May 2019
                        • AHNW demographics reflect a lifetime of accumulation
                          • Figure 10: Affluent/HNW finances, demographics and region, May 2019
                      • Market Perspective

                        • Defining luxury
                          • Figure 11: Definitions of luxury, general population vs AHNW, May 2019
                        • In their own words
                          • Higher incomes are inclined toward travel
                            • Figure 12: Statements about spending and life events, by age group and household income, February 2019
                        • Market Factors

                          • US economy currently holding steady
                            • Three in ten households pass the luxury traveler breakpoint
                              • Figure 13: US Household Income Brackets, 2017
                            • Incomes are increasingly concentrated in the hands of luxury travelers
                              • Figure 14: GINI Index for the United States, not seasonally adjusted, 2000-16
                            • Luxury hotelier plans show optimism
                              • Economic growth is slowing at home and abroad
                                • Figure 15: World Economic Outlook GDP growth and projections, US and select foreign countries, 2017-20
                              • Strong dollar driving down tourism
                                • Figure 16: US Dollar index spot, 2015-19
                              • Friction with China threatens luxury tourism
                              • Key Players – What You Need to Know

                                • Luxury providers are on their game
                                  • Little bits of luxury opening to all
                                    • Notions of luxury are challenged by premium mediocrity
                                      • A turn toward simplicity
                                        • Consciousness is driving decision making
                                          • New frontiers of travel
                                            • Luxury vacations at beck and call
                                            • Brand Movement in Luxury Travel

                                              • Airlines
                                                • Emirates brings Economy model to Business class
                                                  • Delta increases it business-class luxury
                                                    • Hotels
                                                      • Peninsula’s attitude towards tech aids success, growth
                                                        • IHG acquisition hits on travel trends
                                                          • Excellence Resorts has the right consumers in mind
                                                            • Figure 17: Excellence Resorts online ad, August 2019
                                                          • Cruises
                                                            • Seabourn takes luxury to a new (lower) level
                                                              • Regent knows what to offer
                                                                • Figure 18: Regent Seven Seas Cruises mailer, July 2019
                                                              • Virtuoso
                                                                • Figure 19: Wanderlist screenshot, March 2019
                                                            • Trend to Watch: The Premium Mediocre

                                                              • The “Premium Mediocre” and dilution of luxury
                                                                • What can this mean for luxury travel?
                                                                • What’s Happening?

                                                                  • Airports are a focus for streamlining
                                                                    • Luxury accommodations going from rococo to Thoreau
                                                                        • Figure 20: Shishi-Iwa House guest room, Karuizawa, Japan
                                                                      • Companies make luxury a red herring
                                                                        • Consciousness making inroads among luxury providers
                                                                        • What’s Next?

                                                                          • Expedition cruises will define aquatic luxury
                                                                            • The Second $pace Ra¢e
                                                                              • On-demand luxury, anywhere
                                                                              • The Consumer – What You Need to Know

                                                                                • Millennials have the most luxury experience among the general population
                                                                                  • Luxury changes with wealth level
                                                                                    • Dining and streamlining are important
                                                                                      • AHNW travelers aren’t concerned with appearances
                                                                                        • Service still stands as a luxury hallmark
                                                                                          • Wealth uses luxury to travel to, general travelers use it to escape from
                                                                                          • Luxury Travel among the General Population

                                                                                            • Accommodations are the most accessible form of luxury
                                                                                              • Figure 21: Luxury travel experiences, May 2019
                                                                                            • Millennials leading the way on luxury travel
                                                                                              • Figure 22: Luxury travel experiences, by generation, May 2019
                                                                                            • 18-34 year olds are a prime group to target
                                                                                              • Figure 23: Luxury travel plans – CHAID – Tree output, May 2019
                                                                                              • Figure 24: Luxury services paid for regularly, CHAID population vs general population, May 2019
                                                                                          • Luxury Flight and Hotel Preferences

                                                                                            • Luxury travel is being carried by AHNWs
                                                                                              • Figure 25: Luxury travel experiences, by value of investable assets, May 2019
                                                                                            • No strong consensus as to what luxury requires
                                                                                              • Figure 26: AHNW opinions of must-have luxury amenities, May 2019
                                                                                            • Luxury is moving toward efficiency
                                                                                              • Figure 27: Opinion of must-have luxury amenities, by value of investable assets, May 2019
                                                                                          • Luxury Travel Activities

                                                                                            • Non-AHNW look to splurge on shopping
                                                                                              • Figure 28: Must-have luxury trip activities, by value of investable assets, May 2019
                                                                                            • You are what you eat
                                                                                              • Figure 29: Must-have luxury trip activities – Fine dining, by value of investable assets, May 2019
                                                                                            • Luxury travelers value streamlining and immersion
                                                                                              • Figure 30: Must-have luxury trip activities – Select items, by value of investable assets, May 2019
                                                                                            • AHNW preferences are still meaningful for general travelers
                                                                                              • Figure 31: TURF Analysis – Must-have luxury trip activities, May 2019
                                                                                            • Unlike AHNWs, the general population values luxury on display
                                                                                                • Figure 32: Must-have luxury trip activities, general population vs affluent/HNW, May 2019
                                                                                              • Women have more discerning definitions
                                                                                                • Figure 33: Must-have luxury trip activities, by gender, May 2019
                                                                                              • Luxury expectations belie generational stereotypes
                                                                                                • Figure 34: Must-have luxury trip activities, by generation, May 2019
                                                                                            • Luxury Travel Goals

                                                                                              • Exploration is a theme of luxury travel
                                                                                                • Figure 35: Top goals of a luxury trip, by value of investable assets, May 2019
                                                                                              • Affluent care more about VIP treatment, HNW more about connections
                                                                                                • Figure 36: Most important luxury travel goals, affluent vs HNW, May 2019
                                                                                              • Differing generational goals create different opportunities
                                                                                                • Figure 37: Top goals of a luxury trip, by generation, May 2019
                                                                                              • Parents have inclinations inward and outward
                                                                                                • Figure 38: Top goals of a luxury trip, by parental status, May 2019
                                                                                            • Luxury Travel Attributes

                                                                                              • AHNW luxury means being best among many, not excluding others
                                                                                                • Figure 39: Qualities of a luxury travel experience, affluent/HNW vs. all, May 2019
                                                                                              • Wealth does not lead to extravagance
                                                                                                • Figure 40: Qualities of a luxury travel experience, affluent vs HNW, May 2019
                                                                                              • Luxury is individual, even among the general population
                                                                                                • Figure 41: Qualities of a luxury travel experience, May 2019
                                                                                            • Luxury Travel Attitudes

                                                                                              • Attitudes toward luxury reflect changes in the market
                                                                                                • Figure 42: Attitudes toward luxury signalling, by value of investable assets, May 2019
                                                                                              • Luxury don’t impress HNW travelers much
                                                                                                • Figure 43: Attitudes toward impressing others, by value of investable assets, May 2019
                                                                                              • Service still stands as a luxury hallmark
                                                                                                • Figure 44: Attitudes toward service, by value of investable assets, May 2019
                                                                                              • Millennials are telling on themselves
                                                                                                • Figure 45: Attitudes toward luxury travel – Select items, by generation, May 2019
                                                                                              • Wellness is a healthier concern for the general population
                                                                                                • Figure 46: Attitudes toward wellness, by value of investable assets, May 2019
                                                                                              • Disconnecting can be an escape
                                                                                                • Figure 47: Attitudes toward disconnecting, by value of investable assets, May 2019
                                                                                            • Appendix – Data Sources and Abbreviations

                                                                                              • Data sources
                                                                                                • Consumer survey data
                                                                                                  • Consumer qualitative research
                                                                                                    • Direct marketing creative
                                                                                                      • Abbreviations and terms
                                                                                                        • Abbreviations
                                                                                                        • Appendix – The Market

                                                                                                            • Figure 48: GDP change from previous period, Q1 2007-Q2 2019
                                                                                                            • Figure 49: Disposable Personal Income change from previous period, January 2007-June 2019
                                                                                                            • Figure 50: Consumer Sentiment Index, January 2007-July 2019
                                                                                                        • Appendix – The Consumer

                                                                                                          • CHAID Analysis
                                                                                                            • Figure 51: Luxury travel plans – CHAID – Table output, May 2019
                                                                                                          • TURF Analysis
                                                                                                              • Figure 52: Table - TURF Analysis – Luxury activity perceptions, May 2019