Will the luxury travel boom remain the gift that keeps on giving to the industry?

July 23rd, 2024 – Luxury travel curators are pushing the boundaries of indulgence, crafting experiences that redefine exclusivity.  Gone are the generic “luxury” packages; today’s high-end traveller craves “ultra-premium” adventures, seeking the rare and authentic. 

 

But don’t think this shift is just about opulence, it’s also about personalization.  To a great extent, this explains the success of membership programs that offer exclusive access to curated experiences built around the personal tastes of travellers, whilst also fostering a sense of community among discerning adventurers. 

 

The luxury travel industry itself is booming, with a market size exceeding US$1.2 trillion in 2021 and a projected growth rate exceeding 7% annually until 2030.  For example, Delta Air Lines has recorded record profits from premium, hotels are innovating in new premium products and all-luxury airlines such as Beond and JBL are perhaps threatening big carriers. 

 

We asked experts from across the travel spectrum whether this is likely to be a long-term trend, as well as how the industry can tap into it.

 

The luxury boom could prove challenging for airlines, but lucrative for those with the flexibility to broaden their offerings – particularly through personalization. 

 

As Javier Jiménez, Cofounder & COO at Airnguru, a leading provider of fare management, pricing intelligence and price automation solutions for airlines, says: “Established carriers must adapt by offering a truly differentiated luxury experience – beyond plush seats and champagne to include personalized services, curated in-flight experiences, and seamless connections. Leveraging technology and data allows airlines to anticipate the needs of discerning travelers, ensuring each journey feels exclusive and unforgettable. This also enables price optimization of the personalized offers, crucial for a profitable business. Full-service airlines, with extensive infrastructure and diverse aircraft configurations, are well-positioned to capitalize on this opportunity and boost load factors in premium and premium-economy cabins. However, designing and executing suitable strategies, while maintaining product and service consistency across fleets and codeshare partners, remains a significant challenge.”

 

The luxury boom also presents a strong opportunity for the hotel space, particularly independent hotels that offer the unique ‘boutique’ experience.  But how do such hotels, often without the marketing & sales resources of their bigger competitors, reach such an audience?

 

As Pablo Sánchez from Mirai, whose technology solutions enable hotels to maximise direct sales opportunities and minimise distribution costs, explains: “Large OTAs like Booking or Expedia are difficult places to differentiate and showcase unique properties. Instead, a good website (with a good booking engine) allows you to craft the right storytelling for unique properties. Of course, billboard effect is a fact, so it is key to find the right distribution channels aligned with luxury and your destinations (there are a few out there): Virtuoso, Black Tomato, Essentiali. And last but not least, you need a good marketing plan, starting with a clear definition of the audience and focusing on the platforms & moments where you can reach them. Easy to say, not so easy to execute, unless you partner with experts who have experience in direct sales and who have no conflict of interest in also benefiting from selling indirect solutions as long as they bring real value to the hotel and help it optimize its distribution and profitability.”

 

One great way to reach luxury travellers is through affiliate marketing platforms that give you access to travel bloggers. Rami Nuseir, Head of Marketing atStay22, which offers affiliate revenue tools for travel bloggers, believes that “luxury travel bloggers are the ultimate tastemakers for today’s discerning travellers, almost no one escapes their influence. These digital globetrotters curate aspirational experiences, offering a picturesque window into the world’s most exquisite destinations and opulent accommodations.  By partnering with the right bloggers who resonate with a brand’s values and target audience, suppliers or online sellers like OTAs can create highly effective campaigns that go beyond traditional advertising, and are far more persuasive than generic marketing messages.”

 

Evren Oktay from Pax2Night, an accommodation bedbank that is part of Yuppi Travel, recommends finding the right B2B distribution platforms because “when it comes to making a luxury booking a lot of the time the traveller is relying on a retail travel agent to advise them, so make sure that your B2B distributor has access to retail travel agents in the markets that you are most likely to see bookings coming from. Then work really hard with them to make sure that their sales team understands your product.”

 

The resurgence of luxury travel is exciting for travellers but presents prudent considerations for corporate travel managers according to Andres Fabris, the CEO of Traxo, the solution for corporate travel booking visibility. “The blurred lines between business and leisure (or ‘bleisure’) could see an increase in bookings, with employees extending work trips to indulge in luxury travel in their personal time. Bleisure trips can boost morale and productivity but also raise concerns about duty of care and expense management. That’s where technology comes in to bridge the gap. Employers need modern corporate travel software that can support bleisure travel while maintaining awareness of an employee’s whereabouts during business trips, even if those trips extend into personal time. It’s also prudent to leverage complete visibility into on- and off-channel bookings to monitor overspending across the travel program.”