A new study found that luxury tourism has recovered quicker than budget tourism in the United States due in part to an increase in “high-net-worth individuals.”
According to a survey from GlobalData.com, 29 percent of respondents said their travel budgets have increased over what they would have spent before the coronavirus pandemic started.
The luxury leisure market was the biggest benefactor of the increased spending, as the industry experienced a strong start to recovery as wealthy consumers—now with higher levels of disposable income—began to travel once again in 2021.
“There is a lot that goes into why the luxury market is rebounding quicker than others, but I think a lot of it has to do with this idea that most people have been holding off on taking big trips for the last two years,” Vita Brillanti President Emily Brillanti said. “As a result, they have been socking away the cash their saving to now use for luxury travel.”
“The other part here is that travelers are realizing that they value comfort, and being taken care of much more than they might have realized in the past, and luxury travel is where that level of service and comfort tends to stem from,” Brillanti continued. “People are just fine spending the additional $300-$500 room rate per night if it means they will be well-taken care of, and they will have a great experience.”
In the U.S., the GlobalData study found that total hotel revenue from leisure travelers for luxury hotels showed the strongest recovery last year, increasing 147 percent from 2020. The data also suggested two percent of American citizens had a net worth of more than $1 million in 2021.
“I hear repeatedly that consumers have spent too much time at home, are sick of Zooms and have decorated or redecorated more times than they can count,” Protravel International luxury travel advisor Stephen Scott said.
“All of this combines with the need to do something nicer than normal and luxury travel combined with an expert travel advisor is that escape they are looking for,” Scott continued.
The survey found that increases in disposable income may have been created through accidental saving due to pandemic-induced restrictions on movement or through favorable economic conditions that have caused house prices to soar.