A new research from World Travel Market London 2023, has revealed that āaffordable luxuryā is becoming more popular ā despite the squeeze on many holidaymakersā budgets.
The exclusive WTM Global Travel Report ā compiled in association with researchers at Oxford Economics ā has revealed that consumers generally remain determined to go on holiday and plenty are still prioritising upmarket options.
The report, unveiled on 6 November during the travel and tourism event taking place in London, says āaffordable luxuryā is becoming more popular āamid promising sentiment overallā.
It explains that this growth area in travel aligns with a broader trend for consumers to seek out new and unique experiences on holiday.
āAfter the pandemic and restrictions on travel, many have wanted to upgrade their experienceā¦as consumers proactively catch up on missed tourism experiences,ā says the report.
The report notes: āConsumers unaffected by economic downturns are likely to continue opting for luxury destinations.
The report cites United States consumer data from MMGY which suggests that the cost of living is having more of an effect on households with annual incomes under $50,000.
However, those earning more indicated a āhigh likelihoodā of future travel.
Nonetheless, the report warns that some of the post-pandemic drivers of travel demand may have āgone into reverse in recent monthsā, posing a risk to continued expansion.
It points to persistently high costs and the recovery of sterling and the euro, which is making the purchasing power of the US dollar weaker in Europe.
The price of jet fuel is significantly higher than at the start of the year, putting pressure on air fares.
Consumersā personal disposable income is also under pressure as their own transport and other living costs rise.
Despite these headwinds, the report notes: āHigher costs have not yet been a significant deterrent to growth and travellers appear willing to pay higher prices.ā
āWe are witnessing a remarkable resilience as people are still prioritising travel and many are seeking āaffordable luxuryā, such as higher rated accommodation or premium economy and business cabins instead of economyā, says Juliette Losardo, Exhibition Director at WTM London.
Meanwhile, the travel industry continues to face supply side problems, amid geopolitical events such as Russiaās invasion of Ukraine ā and staff shortages still affect many markets because large numbers of workers switched to other sectors during the pandemic.