Amid Rising Travel Costs, Luxury Sector Still Set to See Huge Gains

Travelling has become increasingly pricey. The BBC reported that plane ticket prices alone soared by 44% in December 2022, which is the largest increase seen in almost three decades. Similarly, rail fares in the UK have also seen a price increase, with an expected jump of 5.9% on average, adding hundreds of pounds to the cost of many season tickets.

Despite the rising costs, Travel Weekly notes that 75% of Brits remain keen to travel. Interestingly enough, among all travel sectors, the one that has remained the most unaffected is the luxury market. In fact, insights on LinkedIn forecast that the global luxury industry will grow by nearly 10% annually until 2030.

Rising costs and impact on travel

One of the primary drivers for travel price inflation is the current demand, as the present volume of travellers outweighs the supply. Furthermore, high oil prices caused by supply-chain issues from ongoing political conflicts have also impacted travel costs, as airline and railway companies adjust their prices to match.

However, more people are willing to spend a lot more to secure a holiday in spite of the rising costs. This also comes with a shift in travel trends and intent among holidaymakers, who are increasingly gravitating towards “slow travel”. National Geographic cites that travellers believe a luxury trip will provide a deeper and more immersive experience while having a private space to spend time with loved ones.

In line with these trends, luxury boutique operators such as Black Tomato have also seen a huge growth in high-end multi-generational travel. Family holiday bookings worth £100,000 and upwards have increased by 111% between 2021 and 2022, before settling into another 20% increase this year. Moreover, family travellers are opting for slow travel by going on luxury cruises and train rides, or acquiring an exclusive villa for long-term rent over the holidays. The emerging attitudes towards luxury travel pose significant growth opportunities for the market, as the different travel sectors are working to accommodate traveller’s needs.

Gains in the luxury travel sector

The luxury cruise industry is set to continue making waves, as it is able to satisfy the interest in slow travel with the family. Explora Luxury Cruises focuses on ocean journeys which offer immersive travel experiences while onboard. These come with extraordinary benefits including state-of-the-art luxury suites with ocean-front views, diverse culinary immersions, and intuitive service from hospital experts. Not only do luxury cruises ensure a comfortable stay while at sea, but they also offer unique itineraries that include enchanting destinations in the Mediterranean, Arabian Peninsula, and the Pacific Coast. This gives travellers exposure to new sights and cultures without compromising comfort or privacy.

The appeal of luxury cruises is also affecting current market share, as some companies are selling their stocks at bargain basement discounts to further create an attractive buying opportunity for investors hunting for value. Case in point, Royal Caribbean Group has their fair value at £65.38 as they hope to reel in more investors amidst growth in the luxury cruise market. This can further contribute to the market worth, as high-end cruises were valued at £5.5 billion in 2022 and are expected to reach £11.5 billion by 2029, with a CAGR of 12.8% during the forecast period.

Luxury train lines are also emerging as a popular mode for slow travel, as brands like British Pullman are offering elaborate travel experiences for their guests by curating detailed itineraries that can all be conveniently accessed by train. The luxury train market is expected to increase in value to £1.7 billion by the end of 2023 and continue to have more growth as high-speed and electric trains are projected to improve the premium experience.

Given these emerging preferences in travelling, the luxury travel sector can generally expect more success as they are able to satisfy the demand for these trends. The luxury tourism market in Europe is currently valued at around £110 and £145 billion per year, which could triple in the next decade due to the influx of high-end tourists and premium modes of travel. With this, our blog also highlights The Top Travel Stocks to watch out for as airlines, cruise lines, hoteliers, and other sectors within the travel industry are regaining their momentum as valuable investments. For more updates on investment and finance, visit our website Always Finance News.

About Lisa Baker, Editor 2359 Articles
Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.