Premiumization in Travel and Tourism – Thematic Intelligence

Premiumization in Travel and Tourism Thematic Report Overview

Premiumization refers to the process of elevating products, services, or experiences to a higher quality and offering luxury and exclusivity. It is influenced by factors such as age, lifestyle, experiences, and income. To effectively implement premiumization strategies, players are focusing on the preferences of the target audience and market dynamics. Businesses need to understand the unique wants and expectations of customers to offer products or services that reflect and align with their definition of premium. This enables companies to create meaningful and desirable premium offers for their consumers, which in turn enables them to build loyalty and attract affluent travelers.

The Premiumization in Travel and Tourism thematic intelligence report provides an overview of the premiumization value chain and its several layers. The report further entails a deep-dive analysis of the industry, including real-life case studies that showcase how companies have responded to the impact of this theme on their operations. It also identifies the key market trends that will shape the travel and tourism sector over the coming years and gives an insight into the market players and the competitive landscape within the premiumization theme.

Premiumization – Key Trends

The main trends shaping the premiumization theme over the next 12 to 24 months are technology trends, macroeconomic trends, and regulatory trends.

• Technology trends: A few of the key technology trends impacting the premiumization theme are advancements in AI, the use of robotics, and investment in smart city projects.
• Macroeconomic trends: The key macroeconomic trends explained in the report are the rise in affluent travelers, social media’s impact on consumption, and the increase in inflation rates globally.
• Regulatory trends: The rising focus on health and wellness, niche tourism, and sustainability are a part of the regulatory trends impacting premiumization.

Premiumization – Industry Analysis

This industry analysis section covers the distribution of high-net and ultra-high-net-worth individuals globally, the top domestic and source markets for average expenditure, and the destinations for expensive hotels. Additionally, use cases are then provided from each part of the premiumization value chain to add context. Finally, M&A activity from the past two years is covered within the theme of premiumization, and a timeline is constructed to show the emergence and evolution of this theme over time.

Luxury hotels: The occupancy rate of luxury hotels globally increased from 2022 to 2023. Many countries entered the top 10 list of luxury hotel countries with a few dropping out. Countries within the APAC region witnessed significant growth in luxury hotel occupancy rates. Australia experienced high growth from 2022 to 2023 owing to increased spending from travelers. Moreover, Vietnam witnessed a significant increase in its occupancy rate for luxury hotels owing to the surge in Vietnam’s economy and rising disposable income of the middle class. Additionally, companies such as Dior, Louis Vuitton, Tiffany & Co., and Berluti recently opened stores in Vietnam. This further increases the appeal to consume premium products, which is expected to propel the market growth.

The Premiumization industry analysis also covers:

• Case studies
• Timeline

Premiumization - Value Chain Analysis

The premiumization value chain has three main segments, primary suppliers, secondary suppliers, and third-party suppliers.

Primary suppliers: These are the most important distributors in the creation of premium trips and offer premium services and products that are experience-driven and unique. The sub-layers of primary suppliers are lodging, cruise, airline, destination, and integrated resorts. The companies in this layer must specialize in providing exclusive and upscale travel experiences to affluent travelers as services and products need to be refined to meet the needs of wealthy travelers.

Premiumization Value Chain Analysis

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Leading Public Companies

A few of the leading public companies making their mark within the premiumization theme:

• Carnival Corporation
• Deutsche Lufthansa
• LVMH

Leading Private Companies

A few of the leading private companies associated with this theme:

• Black Tomato
• Hong Kong International Airport (government-owned)
• IYC

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Travel Intermediaries Sector Scorecard

At GlobalData, we use a scorecard approach to predict tomorrow’s leading companies within each sector. Our sector scorecard has three screens: a thematic screen, a valuation screen, and a risk screen.

• The thematic screen ranks companies based on overall leadership in the 10 themes that matter most to their industry, generating a leading indicator of future performance.
• The valuation screen ranks our universe of companies within a sector based on selected valuation metrics.
• The risk screen ranks companies within a particular sector based on overall investment risk.

Lodging Sector Scorecard – Thematic Screen

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Scope

This report provides:

• An overview of the impact premiumization has on the travel sector and seeks to understand some of the contributory factors.
• Analysis of key trends within this theme that are split into three categories: consumer trends, enterprise trends, and industry trends.
• Several case studies to analyze the multiple ways countries and companies have responded to the impact of this theme’s growth and what they are doing to grow with this theme.

Reasons to Buy

GlobalData’s thematic research ecosystem is a single, integrated global research platform that provides an easy-to-use framework for tracking all themes across all companies in all sectors. It has a proven track record of identifying important themes early, enabling companies to make the right investments ahead of the competition and secure that all-important competitive advantage. This thematic report will help in:

• Understanding the premiumization trends within the travel landscape today and how these will escalate in the near future.
• Assessing how travel and tourism companies such as tour operators, OTAs, and DMOs are utilizing Premiumization to drive revenues.
• Identifying the potential pitfalls of using Premiumization by understanding the social, cultural, and environmental effects on the destination.
• Discovering recommendations for businesses involved in Premiumization.
• Understanding opportunities to capitalize on Premiumization with examples and case studies.