Shaping the Future of Luxury Travel | Future Traveller Tribes 2030 13
Comparing 2015-2025 growth in overall travel and luxury travel across regions
CAGR %
Source: Tourism Economics Overall Luxury
12
10
8
6
4
2
0
North America
Western Europe
Emerging Europe
Southeast Asia
South Asia
Northeast Asia
Middle East
North Africa
South America
Oceania
Other regions where luxury travel will outpace overall travel include Western and Eastern Europe, North America, and Southeast Asia (including Singapore, Thailand and the Philippines). These regions all demonstrate growing ultra-wealthy classes that are increasingly mobile and are driving global investment in the luxury travel industry. Interestingly, the luxury travel market in Northeast Asia , including China, is projected to grow at a fractionally slower rate than its overall travel CAGR, albeit still at a healthy rate. This could again be down to China’s size and therefore dominance over market patterns – having already reached the point where its middle class is maturing and increasing in sophistication, it’s natural that the growth rate of its luxury market will slow a little. China’s middle class market is still comparatively new compared with North America’s and Europe’s – but unlike in India the ‘boom’ has already happened. What remains is plenty of opportunities to target the increasingly discerning tastes of a large middle class market. According to McKinsey & Company, in 2010 China’s middle class made up a tenth of urban households; by 2020, it will make up well over half.
In the Middle East , luxury travel and overall travel will grow at similar rates from 2015-2025. In the Kuwait, Qatar and the UAE, the overall travel market will grow by 4.4%, while the luxury market will expand by 4.5%. These nations will experience growth despite their oil‑dependent economies. It will be interesting to see how their current innovation in the global luxury market – demonstrated in the world-leading first class products of their airlines – continues to set new standards in luxury in the next decade. The CAGR for the emerging Middle Eastern markets of Lebanon, Iran, Jordan and Egypt is 7.5% for overall travel and 8.9% for luxury travel – having suffered major declines in the past few years due to political instability, these countries are experiencing recovery. In the case of Iran, this is driven by the lifting of economic sanctions and the return of tourism to the nation.
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