WTM Report: Travelers Prioritize ‘Affordable Luxury’ Despite Budget Constraints

Demand for travel remains strong with consumers willing to spend more on their holidays despite the cost-of-living crisis, found the latest report released at the World Travel Market (WTM) in London this week.

According to the  compiled in association with Oxford Economics, ‘affordable luxury’ is becoming more popular despite the squeeze on many holidaymakers’ budgets. Analysts said this development aligns with a broader trend which finds all the more consumers seeking out new and unique vacation experiences.

“After the Covid-19 pandemic and restrictions on travel, many have wanted to upgrade their experience… as consumers proactively catch up on missed tourism experiences,” said the report.

WTM London 2023 Global Report Presentation. Photo source: WTM London

Analysts attribute the trend to pent-up demand and savings accumulated during lockdowns. At the same time, they say, consumers unaffected by economic downturns are likely to continue opting for luxury travel and destinations while those in lower income groups might seek out more budget travel options or reduce their travels overall.

“People are still prioritizing travel and many are seeking ‘affordable luxury’, such as higher rated accommodation or premium economy and business cabins instead of economy,” said Juliette Losardo, exhibition director WTM London.

“This offers those in the travel industry a chance to help consumers who want simple travel hacks to get more bang for their buck, such as being more flexible with departure dates or finding destinations that offer better value for money,” she said.

Photo source: WTM London

The report concludes that although the cost of travel is rising due to a number of factors, including soaring air fuel prices, consumers still appear willing to travel and to pay higher prices.

“Savvy travel firms can capitalize on this tendency for consumers to value comfort over saving money by providing top tips for clients, loyalty schemes or added extras, for example,” said Losardo.