A new survey by Strategic Vision reveals that while luxury travel is still booming, there are signs of a slowdown and increased sensitivity to the increasing cost of travel among high-net-worth consumers. The 2024 Pulse of the Industry Survey, which polled top travel advisors, found that 91% saw increased revenues in 2023, but only 63% expect growth in 2024. Another 28% forecast no change, and about 9% expect a decrease.
Leisure travel is the growth leader, with 83% of advisors expecting their leisure business to grow, compared to 28% for corporate and 17% for meetings, incentives, conferences and events.
“The customer has changed since Covid-19, becoming more demanding, less forgiving, more entitled,” said Peter J. Bates, president and founder of Strategic Vision. “And as generations shift — the very youngest Boomers are in their 60s; Gen Xers are well into their 50s — attitudes and offerings must shift along with them. Experiences and individuality are in, and customers at the top of the market will pay significant sums for travel that is genuine, well executed and customized to their preferences.”
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The survey highlighted several key trends in the luxury travel sector, including:
1. Cruise industry rebound: 74% of respondents expect 2024 cruise bookings to surpass 2019 levels, with expedition and river cruises seeing particular interest.
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“Cruising is still largely seen as a good value, especially at a time when consumers perceive many luxury hotels to be overpriced,” Bates said. “It also aligns with consumer interest in multigenerational trips and discovering new destinations.”
2. Multigenerational travel surge: 83% report an increase in multigenerational trip bookings over the past two to three years. Forty-eight percent have seen bookings increase by 25% or more, and 0% say they have seen a decrease.
3. Top destinations: Italy (44%), Japan (33%) and Europe in general (28%) were cited as the most popular destinations for 2024, followed by France (22%) and the United Kingdom (17%).
4. Asia is back: 43% say their Asia bookings will exceed 2019, and another 33% expect to be around that level. Vietnam, Laos and Indonesia are in demand, while China business remains low.
5. Antarctica is picking up steam: Among destinations cited as emerging or trending this year, Antarctica was No. 1 (17%) followed by Japan (15%), Australia and New Zealand (11%), Northern Europe (11%) and Southeast Asia (9%).
6. Price sensitivity: 67% of respondents identified high prices relative to perceived value as the most significant obstacle to travel for their clients. A higher perceived value can also drive bookings, with nine out of 10 agents saying that clients are willing to spend more on exclusive or bespoke travel experiences. To avoid overpriced accommodations, 76% of agents have seen clients select a different hotel than their preferred choice due to price.
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7. Shift in travel motivators: Spending time with family and loved ones (63%), discovering new destinations (59%), seeking transformative experiences (57%) and rest and relaxation (43%) were cited as the top reasons for luxury travel.
8. The rise of off-season travel: 74% of respondents believe clients are becoming more willing to travel during traditional low and shoulder seasons.
9. Less concern about sustainability and overtourism: Overcrowding/overtourism was cited as a top client concern by 30% of agents, compared to 42% in 2020. This year, 0% cited concerns about sustainability as an obstacle to travel; it was at 27% four years ago.
“It seems that pent-up demand has washed away concerns about tourism’s impact on the environment and local communities,” Bates said. “Let’s hope that’s not a lasting trend.”
The survey also found that while travel advisors reported positive experiences with generative AI for creating itineraries (57%), 83% expressed challenges with legacy global distributions systems (such as Sabre and Amadeus), which they feel have not innovated enough to keep up with technological change. That said, 39% are struggling to integrate New Distribution Capability (NDC), and only 15% feel that it has beneficial to their agency.
“NDC has created a level of confusion and disruption in normal agency processes,” said Jim Strong, president of Strong Travel Services in Dallas. “It’s much more difficult to take care of delays, cancellations and so forth. All that has led to lack of adoption, which, combined with American’s lack of support, had a lot of travel advisors saying they won’t book American. And that started to reflect in revenue, which is why American decided to rescind this ill-advised program.”
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Despite emerging challenges, the luxury travel sector remains resilient, with high-net-worth consumers continuing to prioritize unique and personalized travel experiences.
“Our market intelligence with cruise lines, hotels, event planners, and travel advisors suggests that high-net-worth consumers — armed with swelling portfolios and savings accounts — are not slowing down,” Bates said. “They may be adjusting and reassessing, but our research shows that business will remain buoyant for the rest of this year.”
Editor’s Note: This article was generated by AI, based on a press release distributed by Strategic Vision. It has been fact-checked and reviewed by a TravelAge West editor.