Table of Contents
Executive Summary
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- Impact of COVID-19 on luxury travel
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- Figure 1: Short, medium and long-term impact of COVID-19 on luxury travel, 6 January 2021
- The market
- Slower recovery for overseas travel
- Effective insurance vital for Brits booking holidays
- Brexit worries add up to already high levels of uncertainty
- Companies and brands
- Kuoni moves towards virtual call centres and video chat service
- MGM offers ‘work away from home’ trips in Las Vegas
- Viking installs laboratory on cruise ship, while Abercrombie & Kent offers discounts on tests
- The consumer
- Volume of Mintel’s luxury traveller segments
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- Figure 2: Luxury traveller segments, September 2020
- A difficult 2020 has increased the emphasis on making memories
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- Figure 3: Meanings attached to luxury holidays, August 2019 and September 2020
- Villas and cottages gaining popularity during COVID-19
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- Figure 4: Changes in appeal of luxury holiday types compared to prior to COVID-19, September 2020
- Italy is the most desired destination for a luxury holiday
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- Figure 5: Most considered Luxury travel destinations, by luxury travellers, September 2020
- The majority of five-star big-ticket spenders want well-known destinations
- Multi-centre trips are particularly appealing to luxury travellers
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- Figure 6: Interest in multi-centre holidays, by luxury traveller segment, September 2020
- Five-star big-ticket spenders are the main market for luxury train travel
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- Figure 7: Interest in luxury train travel, by luxury travel segment, September 2020
- Most luxury travellers are set to cut back on holidays in the next year
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- Figure 8: Changes to spending on travel, by luxury travel segment, September 2020
- Limiting environmental impact remains important for luxury travellers
Issues and Insights
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- Additional flexibility remains key to boost luxury travel during COVID-19
- Multi-centre trips offer strong opportunities for luxury travel operators in the longer term
- Luxury travellers are keen to make memories once restrictions are lifted
- UK trips and staycations set to thrive in the short term…
- …before a post-COVID-19 demand for multi-centre trips abroad takes over
The Market – Key Takeaways
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- Brexit worries add up to already high levels of uncertainty
- Positive signs for domestic travel with a slower overseas recovery
- The long-term outlook on the holiday market remains positive
Market Background
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- Impact of COVID-19 on luxury travel
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- Figure 9: Short, medium and long-term impact of COVID-19 on luxury travel, 6 January 2021
- Strong domestic summer season expected
- Slower recovery for overseas travel
- Long-term outlook on holiday market remains positive
Market Drivers
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- Lockdowns will prolong the recovery of the holiday market
- Holiday spending continues to be hit by COVID-19
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- Figure 10: Holiday spending intentions for the next month compared to usual, 25 June-19 November 2020
- First Brits given COVID-19 vaccination but travel uncertainty will remain
- Effective insurance vital for Brits booking holidays
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- Figure 11: Attitudes towards the impact of COVID-19 on travel, June 2020
- Brexit worries add up to already high levels of uncertainty
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- Figure 12: Plans to book a holiday in the next three months, January 2019 to November 2020 (fieldwork dates in November 2020: 5-18 November)
- Brexit changes could make staycations and long-haul destinations more popular
- Top earners household income grew 9% in 2018/19
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- Figure 13: Average annual household income after tax and benefits, by quintile, 2008/09-2018/19
- Volume and value of HNWIs in the UK grew over 6% in 2019
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- Figure 14: Top 10 nations for number of HNWIs*, 2015-19
- Almost half of high earners are confident about their financial situation
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- Figure 15: Consumer sentiment among high earners for the coming year, May 2019-November 2020
- Remote employment will boost working travel
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- Figure 16: Interest in working holidays, by demographics, July 2020
- The cruise industry will have to do its utmost to regain travellers’ confidence
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- Figure 17: Volume of UK & Ireland sea cruise holidays (number of trips), 2013-19
- Outdoor activities have become more important when promoting wellness breaks
- Some wellness operators maintain price levels to protect premium feel
Companies and Brands – Key Takeaways
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- Luxury travel operators are adapting to the COVID-19 era
- The increased importance of private experiences
- Hotels look to boost demand with working holiday options
Luxury Travel Specialists
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- COVID-19 will see dramatic decline in 2020 turnover
- Kuoni has been the luxury travel market leader for several years
- COVID-19 sees Kuoni close several stores and shift to virtual call centres
- Kuoni launches Talent Finder to help affected employees find new opportunities
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- Figure 18: Kuoni financials, 2017-18
- Kuoni reports couples are upgrading honeymoons after cancelled trips in 2020
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- Figure 19: Top 10 most popular luxury travel destinations, January 2020*
- Prior to COVID-19, Audley Travel was the fastest-growing luxury travel specialist
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- Figure 20: Audley Travel financials, 2017-18
- Bliss Topco sees revenue decline before the COVID-19 outbreak
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- Figure 21: Bliss Topco financials, year to end April, 2017-19
- Kenwood Travel’s 2020 financial year badly hit by COVID outbreak
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- Figure 22: Kenwood Travel financials, year to end March, 2018-20
- Abercrombie & Kent looks to small group trips to boost travel
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- Figure 23: Abercrombie & Kent financials, 2017-18
- Destinology saved from closure by Brooklyn Travel Holdings
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- Figure 24: Destinology financials, year to end January, 2018-19
- Scott Dunn streamlines brands to cope with the pandemic
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- Figure 25: Scott Dunn financials, year to end October, 2017-19
Launch Activity and Innovation
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- Luxury travel operator Kuoni invests in online customer service and booking flexibility
- Lockdown sees stores closed and a shift to online customer service
- Shift to video appointments as customers seek face-to-face interaction
- Kuoni launches Flex+ to encourage 2021 bookings
- Travel restrictions see Kuoni offer more UK and Ireland trips
- A&K’s focus on booking flexibility, financial incentives and private experiences
- Abercrombie & Kent looks to increase booking flexibility
- Abercrombie & Kent offers £50 discount towards a COVID-19 test
- Abercrombie & Kent’s sales event to encourage bookings
- Abercrombie & Kent looks to 2021 with new private jet expedition
- Ritz-Carlton launches ‘villa club’ to provide guests with a more private experience
- Hotels look to boost demand with working holiday options
- MGM offers ‘work away from home’ trips in Las Vegas
- Marriott launches new Bonvoy initiative for working travellers
- Peninsula Hotels set to make check-in and check-out times more flexible
- Cruise industry prepares for reopening after COVID-19 hits
- Scenic looks to boost future demand with super early bird discounts
- Viking installs industry-first laboratory on cruise ship
- Airbnb looks to raise $2.5 billion with IPO
- Investment continues in potential space tourism
- Virgin Galactic aiming for passenger trips by the end of 2021
- EOS-X Space looks to offer a more accessible space experience
- Rising competition as start-up Space Perspective boosts investment
The Consumer – Key Takeaways
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- High interest in multi-centre holidays
- Huge growth potential for villas and cottage holidays
- Higher emphasis on making memories and feeling special
Defining the Luxury Traveller
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- Mintel’s approach to defining the luxury traveller
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- Figure 26: Amount spent on most expensive holiday taken, August 2019 and September 2020
- Signs of growth in longer trips
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- Figure 27: Duration of most expensive holiday taken, August 2019 and September 2020
- COVID-19 implications could drive long trips among younger people
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- Figure 28: Duration of most expensive holiday taken, by age profile, September 2020
- A third of British travellers have stayed in accommodation rated five stars or above
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- Figure 29: Use of premium/luxury holiday accommodation, September 2020
- Volume of Mintel’s luxury traveller segments
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- Figure 30: Luxury traveller segments, September 2020
- Older demographics are more likely big-ticket spenders
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- Figure 31: Luxury traveller segments, by age and household income profile, September 2020
Meaning of Luxury
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- A difficult 2020 has increased the emphasis on making memories
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- Figure 32: Meanings attached to luxury holidays, August 2019 and September 2020
- Definitions of comfort may have changed due to COVID-19
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- Figure 33: Meanings attached to luxury holidays, by rank, September 2020
- Making memories and feeling special are key for five-star big-ticket spenders
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- Figure 34: Meanings attached to luxury holidays, by luxury traveller segment, September 2020
- Older luxury travellers prioritise comfort…
- …while younger demographics are seeking adventure
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- Figure 35: Meanings attached to luxury holidays, by age, September 2020
COVID-19 and Types of Luxury Holiday
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- Villas and cottages are gaining popularity during COVID-19…
- …while the cruise industry suffers from consumer caution
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- Figure 36: Changes in appeal of luxury holiday types compared to prior to COVID-19, September 2020
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- Figure 37: Changes in appeal of luxury holiday types compared to prior to COVID-19, positive vs negative (percentage points), by luxury traveller segment*
- Big-ticket spenders more interested in self-driving holidays
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- Figure 38: Changes in appeal of luxury holiday types compared to prior to COVID-19, by big-ticket spenders, September 2020
- Five-star big-ticket spenders show the most desire for villas and cottages
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- Figure 39: Changes in appeal of luxury holiday types compared to prior to COVID-19, by five-star big-ticket spenders, September 2020
- Rental houses are viewed as more authentic and unique experiences
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- Figure 40: Perceptions of accommodation types, August 2020
Luxury Travel Destinations
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- Italy is the most desired destination for a luxury holiday
- Older demographics are showing a reluctance to travel further
- England is the most popular destination for the over-55s
- Younger demographics showing more appetite for long-haul trips
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- Figure 41: Considered luxury travel destinations, September 2020
- Potential new entrants to the market are more likely to stay closer to home
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- Figure 42: Most considered luxury travel destinations, by luxury travellers, September 2020
- Strong demand for luxury English breaks among big-ticket travellers
- The US continues to appeal to a quarter of big-ticket spenders
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- Figure 43: Most considered luxury travel destinations, by luxury traveller segment, September 2020
- The majority of five-star big-ticket spenders want well-known destinations
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- Figure 44: Well-known destination preference, by luxury traveller segment, September 2020
- Multi-centre trips are particularly appealing to luxury travellers
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- Figure 45: Interest in multi-centre holidays, by luxury traveller segment, September 2020
Luxury Train Holidays
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- Nearly half of British travellers are interested in luxury train holidays
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- Figure 46: Interest in luxury train travel, by age, September 2020
- Five-star big-ticket spenders are the main market for luxury train travel
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- Figure 47: Interest in luxury train travel, by luxury traveller segment, September 2020
- Millennials living in the city are the most interested in luxury train holidays
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- Figure 48: Interest in luxury train travel – CHAID analysis, September 2020
Attitudes towards Luxury Travel
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- Most luxury travellers are set to cut back on holidays in the next year
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- Figure 49: Luxury travel spending, by luxury traveller segment, September 2020
- Half of luxury travellers are booking last minute due to COVID-19
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- Figure 50: Last minute bookings, by luxury traveller segment, September 2020
- Over half of five-star big-ticket spenders only take luxury holidays
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- Figure 51: Frequent vs occasional luxury travellers, by luxury traveller segment, September 2020
- Over half of luxury travellers prefer to book package holidays
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- Figure 52: Package booking, by luxury traveller segment, September 2020
- Many luxury travellers are willing to pay more for additional safety measures
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- Figure 53: Additional safety measures, by luxury traveller segment, September 2020
- Private transport vital for five-star big-ticket spenders
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- Figure 54: Transportation preferences, by luxury traveller segment, September 2020
- Limiting environmental impact remains important for luxury travellers
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- Figure 55: Attitudes towards minimising impact on the environment while travelling, August 2019 and September 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Definitions
- Abbreviations
- Consumer research methodology
- CHAID analysis methodology
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- Figure 56: Luxury Travel – CHAID – Table output, September 2020
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