Traditionally, luxury hospitality has been defined by private villas and opulent lobbies, lush, exotic locations, white-glove service, exclusive amenities, grand rooms with panoramic views and lavish finishes, plush bedding, and impossibly high thread-count sheets. And while Michelin-grade meals and a standing appointment at a spa fit for the set of The White Lotus might still be high on a guest’s wish list for their next luxury getaway, this segment of travel now finds itself in a period of significant transformation.
The modern luxury economy has become a part of not just pop culture, but youth internet culture. Members of Gen Z, in fact, are making their first luxury purchases earlier than millennials did — at around age 15, according to Bain & Co research. The same research projects that millennials and younger generations will make up 80 percent of luxury spending by 2030.
As consumer preferences evolve in lockstep with demographic changes, technological advancements and cultural shifts, the criteria for a ‘luxury’ travel experience has also changed. A high-end experience in the current landscape is not just about opulence, grandeur and the allure of exclusivity. Rather, it’s about authentic cultural exploration, the promise of off-the-beaten-path adventure, the pursuit of enhanced wellness, unparalleled convenience across every touch-point, and the meaningful cultivation of emotional connections and memorable moments both on and off property.
The luxury travel segment continues to grow
Demand for luxury travel experiences is growing at an impressive rate, with the value of the global luxury travel market expected to reach $369.36 billion by 2032, and a projected compound annual growth rate of 11.5%. On one hand, we can attribute this to an increase in the number of individuals globally with net worths between $1 million and $30 million. On the other hand, the growth in this segment can also be linked to an increased appetite for experiences over material goods, and the willingness of younger generations to spend larger shares of their wealth on upscale travel options. To this effect, McKinsey reports that 35% of the luxury-travel market is now composed of travelers with net worths of between $100,000 and $1 million.
With this in mind, it’s important to acknowledge both the existing and emerging sub-categories of luxury travel, from the traditional high-net-worth travelers to the aspiring luxury travelers that crave an elevated yet still accessible experience. Luxury hospitality exists on a wide spectrum; after all, ‘luxury’ means different things to different travelers. Those hospitality brands that successfully curate unique, high-end experiences for each category of the luxury segment will be in the best position to capitalize on this growing demand.
As luxury travel becomes more desirable – and accessible – to the masses of eager, experience-hungry travelers, hospitality brands must keep their finger on the pulse of the trends that are set to redefine this segment now, and in the years to come.
Seamless service and personalization will always be a key ingredient for luxury experiences
One of the most important elements of luxury hospitality always has been – and always will be – the provision of seamless service that prioritizes personalization and attention to detail. Fortunately, digital innovation is a catalyst to consistently enhanced service quality.
With modern cloud-based PMS and RMS systems, mobile apps, digital payment solutions, and AI-driven tools now readily available across the industry, hotels can create a truly frictionless on-property experience. With the help of a cohesive omni-channel experience, hospitality brands not only enhance convenience and empower staff to offer more attentive, high-touch service – they also capture the guest data needed to curate increasingly tailored experiences and recommendations that drive satisfaction and loyalty.
What does AI-powered luxury look like?
When hotels adopt processes and platforms that allow them to leverage big data and offer personalization at scale, like an AI-powered concierge, they are able to anticipate guest needs before they become a request, which serves as the initial foundation for a stand-out, luxury experience. In many ways, luxury experiences are synonymous with bespoke experiences, and AI systems make it easy for hotels to meet this demand.
Imagine an AI-powered platform that analyzes guest data (everything from past vacations to current dietary preferences) to inform personalized experience recommendations, meal plans, smart room settings, and so much more. To this effect, AI in the hospitality market was valued at $90 million in 2023 and is currently expanding at an astonishing annual growth rate of 60%. It is expected to top $8 billion annually by 2033.
The family vacation – redefined
If the thought of a big family vacation conjures up distant memories of long lines at DisneyLand or a week of buffet meals at a cookie-cutter, all-inclusive resort, you surely aren’t alone. But one of the key drivers of growth in the luxury segment over the last few years has been an influx in family travel – more specifically, large-scale, multi-generational trips to unique locations.
Travel is, after all, a great way to forge deeper connections with loved ones, and bookings that included two or more generations reportedly doubled between 2021 and 2023 in the wake of the pandemic. These trips are positioned as a once-in-a-lifetime family bonding experience, with an emphasis on cultural exploration, large-scale celebrations, private villas or boat charters, and overseas adventures with something for every generation.
A growing appetite for enhanced cultural immersion
The experience economy is still alive and well, and now more than ever travellers are demonstrating a rather voracious appetite for authentic, cultural experiences, oftentimes nestled within “off-the-beaten-track” destinations. Millennial and Gen Z travelers are especially interested in more authentic travel experiences, seeking out opportunities to consume local cuisine, participate in cultural traditions and immerse themselves in the daily experiences of the community they are visiting.
Within the world of luxury travel, we see an influx in demand for tours that give travelers a chance to learn more about the destination they’ve chosen, while indulging in unique adventures and less crowded experiences (i.e. private tours).
The rise of sustainable luxury
It’s now well understood that sustainability cannot be an afterthought in the hospitality industry – and luxury hospitality is no exception. Now, more than ever, affluent travelers are seeking out travel experiences that are equal parts luxurious and eco-conscious; they crave an exclusive experience, but not at the expense of the environment and local community. According to a recent Virtuoso survey, 74% of luxury travelers said they are willing to pay more to travel responsibly, especially if it’s clear how the money will be used.
With this in mind, many luxury hotels and resorts have begun to integrate sustainability seamlessly into their design, operations, and guest experience, from renewable energy to water conservation initiatives, carbon offset programs, wildlife conservation, farm-to-table dining experiences, and more.
An opportunity to thrive
Today’s affluent travelers crave experiences that are immersive, meaningful, and deeply personal, favoring those hospitality brands that not only offer exclusivity but also align with their core values and interests. With this in mind, leveraging modern hospitality software has become essential for hotels aiming to capture the loyalty of discerning guests across the luxury segment.
Ultimately, the future of luxury hospitality lies in crafting unique, high-touch experiences that are enabled by technology. Technology that drives meaningful personalization, exceptional service, and emotional resonance creates not just a momentary indulgence – but a lasting connection that stays with a guest long after they’ve returned home, and keeps them coming back.
About Infor
Infor is a global leader in business cloud software specialized by industry. We develop complete solutions for our focus industries. Infor’s mission-critical enterprise applications and services are designed to deliver sustainable operational advantages with security and faster time to value. Over 60,000 organizations in more than 175 countries rely on Infor’s 17,000 employees to help achieve their business goals. As a Koch company, our financial strength, ownership structure, and long-term view empower us to foster enduring, mutually beneficial relationships with our customers. Visit www.infor.com.
Alan Young
VP, Hospitality Strategy, Infor
Infor
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