What’s Driving Luxury Travelers In 2024, According To McKinsey
Travel is one of the world’s largest industries. According to McKinsey, $8.6 trillion will be spent on travel in 2024, representing roughly 9 percent of this year’s global GDP.
And the consulting leader says that demand for luxury tourism and hospitality will grow faster than for any other travel industry segment. Luxury travel was a $239 billion business in 2023. McKinsey predicts it will grow to $391 billion by 2028.
Who is a luxury traveler? McKinsey uses a very simple metric: someone who typically spends over $500 per night on a hotel room.
What is driving the growth in such luxury travel? A key factor is the sharp rise in people around the world with a net worth of between $1 million and $30 million.
Yet 35% of luxury travelers have a net worth of under $1 million but are willing to spend ‘like millionaires.’ McKinsey says these aspiring luxury travelers with net worths of between $100,000 and $1 million are younger and increasingly willing to spend larger shares of their wealth on upscale travel.
In the U.S. alone, 22 million people (6.6% of the population) were worth over $1 million in 2023. China, where “to get rich is glorious,” has 6 million people considered dollar millionaires, or 0.4 percent of the population. That’s according to Statista, quoting a UC:E:601227:601243:275609551:0:1640977188:1640981663:en:0" title="https://www.ubs.com/content/dam/assets/wm/global/insights/doc/global-wealth-report.pdf?campID=UC:E:601227:601243:275609551:0:1640977188:1640981663:en:0" target="_blank" data-ga-track="ExternalLink:https://www.ubs.com/content/dam/assets/wm/global/insights/doc/global-wealth-report.pdf?campID=UC:E:601227:601243:275609551:0:1640977188:1640981663:en:0" aria-label="report" rel="noopener">report from theSwiss bank UBS.
France is number three, with 2.9 million millionaires, or 4.2 percent of the population. China has seen millionaire numbers rise quickly since 2000, and McKinsey says there is a chance Asia may overtake the U.S. in millionaire numbers in coming years.
