- Contents
- *Overview
- What you need to know
- Key issues covered in this Report
- Definition
- COVID-19: market context
- Economic and other assumptions
What you need to know
As in the rest of the industry, luxury travel was doing very well before the COVID-19 pandemic struck. Engagement in the luxury travel sector has actually risen among the general population since 2019, despite the pandemic taking a significant amount of time away from travel. This is because luxury travel experiences have become more accessible through pared-down luxury options such as unbundled business class flights. As this practice has become more widespread, it is up to luxury providers to know what motivates the general population and the affluent population so as to cater to each group’s specific luxury travel desires.
Key issues covered in this Report
The impact of COVID-19 on consumer behavior and the luxury travel market.
How the ensuing economic downturn has affected the ability of consumers to engage in luxury travel.
What travelers view “luxury travel” to be, and what motivates each consumer segment to engage in the market.
How to better engage the growing segment of the general population that is going on luxury trips while still catering to the higher end of the market.
Definition
For the purposes of this Report, Mintel has used the following definitions:
General population: Internet users aged 18+; this group is representative of the American population as a whole, and includes consumers who may also fall into the Affluent/High-Net-Worth category
Affluent/High-Net-Worth (AHNW) consumers: Internet users aged 18+ who have a total net worth of $500K+:
Affluent: Total household net worth of $500K-999K
High-Net-Worth: Total household net worth of $1M+
See Appendix – Data Sources and Abbreviations for more information about sampling and survey methodology
Luxury trip: A leisure trip that involves at least one luxury travel experience.
Survey participants were given the following criteria to define a luxury travel experience:
Domestic flight on a premium service class
International flight on a premium service class
Flight on a private chartered aircraft
Stay in a premium/luxury brand hotel
Stay in a luxury hotel room/suite
Stay in a high-end all-inclusive resort
Cruise on a premium or luxury cruise line
Rental of a luxury brand car while traveling
Purchase of VIP tickets to an event while traveling
Purchase of a luxury excursion package
Employing a travel agent/advisor catering to luxury travel
COVID-19: market context
This Report was written between January 25 and February 25, with the consumer survey fielded January 4 to January 19.
The first COVID-19 case was confirmed in the US in January 2020. On March 11, the World Health Organization declared COVID-19 a global health pandemic, and on March 13, former President Trump declared a national emergency in the US. Across the US, state-level stay-at-home orders rolled out throughout the months of March and April, remaining in place through May, and in some cases June. During this time, referred to as lockdown, non-essential businesses and school districts across the nation closed or shifted to remote operations.
During re-emergence, all 50 states have relaxed stay-at-home orders and allowed businesses to operate with varying levels of social distancing measures in place. The continued spread of COVID-19 infections has driven some states to slow down or reverse course on reopening plans. Mintel anticipates the US will remain in a state of flux through 2021, until a vaccine is widely distributed.
While there has been activity in the travel sector over the summer, much of this was relegated to getaways to remote areas and road trips. Consumers are persistently worried about pre-pandemic style travel, vexing airlines and depressing hotel revenues. Americans are, however, eager to travel once they feel safe and able to do so.
Economic and other assumptions
Mintel’s economic assumptions are based on CBO estimates released on February 1, 2021. The CBO’s previous forecast for US GDP to fall by 5.8% in 2020 was revised after a stronger second half of the year and the updated estimate indicates negative 3.5% GDP for the year. The CBO forecasts GDP to grow by 4.6% in 2021 and projects unemployment to continue to fall to average 5.7% for the year.