ILTM has commissioned a white paper to find Luxury Travel’s True Impact on Business and Employment, with a focus on “the $2.05 trillion global luxury travel universe, the seismic consequences of COVID-19, and why luxury travel brands are vital to the global recovery.”
While “COVID-19 is primarily a health crisis,” the white paper reads, noting that over 1 million people around the world have been infected and tens of thousands have lost their lives, it adds that the virus is affecting many more millions of people across the globe in other ways.
In December 2019, ILTM released a report defining the global luxury travel ecosystem—a collection of industries connected to travel that are supported by global luxury travelers—and found the annual value of this ecosystem to be $1.54 trillion. Shutting down travel and the assorted ecosystem activities with which luxury travel, in particular, is associated, not only has an impact on well-heeled travelers, it severely affects the many millions of small businesses, communities and families that depend upon them. Across the top 50 most visited nations, 105.9 million individuals work directly in the travel industry, in sectors such as airlines, hotels and travel agencies; with travel essentially in shutdown, many of these individuals face the immediate loss of their livelihood.
ILTM notes there are nearly 23 million individuals worldwide worth more than $1 million, defined as high-net-worth individuals (HNWIs). These wealthy individuals contribute $507.6 billion of the $1.41 trillion spent on global airfares and lodging each year. “HNWIs are the most valuable group of travelers,” the report says. “With greater wealth at their disposal, this group also tend to book longer trips, more expensive rooms in luxury lodging and are significantly more likely to book valuable premium seats on airlines. Their spending power for ecosystem activities is also formidable; for food and drink experiences within the global luxury travel ecosystem, they contribute just under half of the total spend.”
Spend goes beyond airlines, hotels and travel agencies, it extends to theaters, water sports vendors, restaurant owners, local fitness instructors and more. Many individuals like these rely on visiting domestic and international tourists, with some solely focused on them.
“The COVID-19 crisis has highlighted how strong and truly global the connection is between the providers of ecosystem activities and experiences and the international wealthy luxury travelers who seek them,” ITLM says. “The continued access to and interaction with globetrotting individuals of wealth and spending power is vital for many economies and travel-related businesses around the world.”
“The large effect that this small group of 22.8 million HNWIs has on putting wealth back into local economies is unrivaled,” ITLM adds.