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Our traveller trend research suggests that Europe, North America, and Asia all have growing ultra-wealthy classes that are increasingly driving global investment in the luxury travel industry. When it comes to innovation in luxury products, the Middle East is leading the way, while in China an emerging middle class market with high end tastes offers plenty of opportunity.
In the Middle East , luxury travel and overall travel will grow at similar rates from 2015-2025. In 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 – particularly in the world-leading first class products of their airlines – continues to set new standards in luxury in the next decade.
The compound annual growth rate for the emerging Middle Eastern markets of Lebanon, Iran, Jordan and Egypt is 7.5% for overall travel and 8.9% for luxury travel. While this region has suffered major declines in the past few years due to political instability, recovery appears to be on the horizon. In the case of Iran, this is driven by the lifting of economic sanctions and the return of tourism to the nation.
In Northeast Asia, including China, the luxury travel market is projected to grow at a fractionally slower rate than its overall travel, but still at a healthy rate. This could again be down to China’s size and dominance over market patterns – having already reached the point where its middle class is maturing, which will naturally slow the growth rate of its luxury market. 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.
Download a copy of our Shaping the Future of Luxury Travel report to learn more about these trends and be sure to let us know how you think they will impact the industry as a whole.