Travel Trends That Are Fast Growing in Popularity
The luxury travel industry is changing. With shifts in the priorities of target markets, luxury tourism providers have to think outside the box to find ways to appeal to this new, more philanthropic and self-aware demographic of traveller. Here are some of the most significant factors predicted to affect the luxury travel industry throughout the rest of 2017 and beyond.
The Desire for Sustainability
With the United Nations declaring 2017 the ‘International Year of Sustainable Tourism for Development’, and the third of its three tenets focusing on ‘resource efficiency, environmental protection and climate change’, it’s hard to deny that sustainability is becoming a global priority for the tourism industry.
The World Tourism Agency (UNWTO) will be working, under this mandate, with governments, international and regional organisations, and relevant stakeholders on the guidelines of the “2030 Agenda for Sustainable Development”. This agenda prioritises world transformation under headings including several centred on development and stimulation of economy and environmental sustainability.
This is having a direct effect on the world of luxury travel, with wholly new green travel opportunities appearing regularly. From ‘Living Hotels’ featuring massive indoor rainforests, to the rising prominence of naturally unobtrusive ‘eco resorts’, the luxury travel industry is finding new ways to cater to an increasingly environmentally aware clientele.
Changes in luxury travel trends are also having an implicit effect on eco-sustainability. With a strong drive towards more culturally immersive, experiential travel, travellers seeking unique experiences are having a positive environmental impact through a desire to give something back to the communities in which they stay; Rises in trends such as ‘voluntourism’ have led to economic stimulation of affected communities.
Similarly, the rise of ‘see it before it’s gone’ travel is having an impact on natural landmarks. This is encapsulated by national parks, where the wealthy are paying top-dollar in park and safari fees to catch a glimpse of endangered wildlife. All of this ensures the steady stimulation, growth and stability of these environments.
The Age of Experiential Travel
A Harriss Group study found that 78% of millennials would rather spend money on experiences over material things, and one of the biggest adjustments the luxury travel industry has had to make is to accommodate the desires of a generation whose holiday aspirations differ from those prior.
This ‘Old Luxury vs. New Luxury’ debate essentially comes down to what kind of capital a traveller seeks to gain from their holidays – material or social; It’s no longer ‘in’ to visit the most expensive chain hotels, or spend the largest amount of money on a ‘sit by the pool’ getaway.
While both of these industry outlets are by no means suffering, there is now a clear desire for unique experiences. Travellers want to forge truly special memories, and return with unsurpassable stories to tell.
In the vein of this trend are things like ‘transformative travel’, where tourists undergo a holiday experience akin to that of an explorer – discovering cultures, traditions and locations and immersing themselves, rather than remaining static.
Similarly, high-end travel providers are finding ways to ensure the opportunities they provide for their customers stand out. Million dollar safaris, and the chance to rent an entire cowboy ghost town suggest new ways to cater to a generation of traveller looking to take home more than trinkets and photos.
The Significance of Millennial Priorities
The UN estimated in 2011 that 200 million millennials – nearly 20% of all travellers – generated around $185 billion in revenue for the industry – a 30% increase since 2007. Evidently millennial priorities are driving industry trends.
One of the most important demographics to emerge has been the Fortune-coined ‘High Earner Not Rich Yet’. These ‘HENRYs’ earn well, but are not yet technically wealthy. It is this financial flux that has led to the luxury travel industry adopting this clientele as one of their most crucial markets.
Furthermore, principles of the sharing economy are having an impact on traditional models of travel investment. Rather than investing in property options such as the purchase of second homes, wealthy millennials are increasingly turning to modern alternatives including property investment clubs, which offer financial alternatives in the form of fractional ownership.
These kinds of adaptations of business models tie in with the ideals of the millennial generation. Rather than owning one property in one place outright, investors are able to holiday in multiple locations and properties, reducing their carbon footprint and impact on local economies.
The luxury travel industry is having to keep up with these shifting desires, whilst simultaneously ensuring it offers the same elegance and indulgence for which it has always been associated. However, while these changes mean a change in tradition, they also open the door to a wealth of new opportunity.
The HENRY and Millennial markets offer huge potential for the future. If tapped correctly, the environmentally and socially considerate priorities of this new generation will allow for the stimulation of both the luxury travel industry and the world it opens the door to.