A Positive Take on the Future of Affordable Luxury Travel
If there’s one thing for sure, the travel industry is changing by the minute. In these times of uncertainty, we can’t help but wonder what the future of the affordable luxury travel market will look like.
The global tourism industry has arguably been hit the hardest by this pandemic. Impacts on both travel supply and demand have affected key Asian and European destinations such as China and Italy, respectively. But, we’re confident that will it will bounce back and twice as hard.
Instead of focusing on the negatives, we definitely think there are some positives to take from this situation. Not only that, but we think it’s a great time for the affordable luxury market to thrive.
1. Increase in Domestic Travel
While the airline and hotel industries figure out a way to make travel safer for all, we anticipate a rise in domestic travel. Not just in the UK, but around the world. This is supported by local regulations such as in Spain where beaches and restaurants are initially open to locals, albeit with limited capacity.
Over the coming months, many countries are set to open their borders to international arrivals from certain countries. However, many travellers remain concerned about their health and safety while travelling and the quarantine period once arriving in a foreign country.
For example, when arriving in Spain UK citizens have to quarantine for 14 days, which means that a 7-day holiday will have to be extended substantially. Many travellers are also realising that they haven’t really seen much of their home country in the past as they have been too busy travelling abroad.
Not only that, but it’s much easier and less stressful to take a car journey with family and friends up and down the country. People will likely feel safer travelling in smaller groups than on bustling public transport.
Therefore, we expect people to begin taking shorter trips such as weekend breaks to local national parks and cities. And the affordable luxury market is well positioned to make the most of welcoming domestic travellers.
2. Increased Demand for Affordable Luxury Accommodation
Given the impact that the pandemic has had on job losses and uncertainty about future careers, people will likely have less disposable income. Even those whose careers seem more or less secure, there is still concern about the future of the economy. Therefore, people will want to get more for their money in all areas of their life, including travel.
Also, after being in lockdown for several weeks, it’s likely that people will want to enjoy themselves and spend quality time with family and friends. They might even treat themselves and their loved ones to a bit of luxury, albeit without breaking the break.
While we hope people’s jobs remain secure and anticipate the economy to bounce back quickly, we assume that people will be savvy with their spending. This could potentially lead to an increase in demand for affordable luxury hotels or Airbnb’s by domestic travellers.
Plus, as people will be travelling within their own country, this will cut the cost of flights, airport transfer and airport parking, meaning they will have more money to spend on accommodation.
In cities, we recommend taking advantage of affordable luxury hotels. You can often access great deals on booking.com for weekend breaks in hotels offering spa facilities at no extra cost. For quirky countryside stays, we definitely recommend checking out Airbnb.
3. Increased Demand for Affordable Luxury Airbnb’s
Airbnb is one of the companies in the travel industry that has been hit the hardest during the past few months. Once valued at $31 billion in 2017, it is now worth almost half at $18 billion. It’s already cut 25% of its workforce accounting for 1,900 individuals. New bookings are currently down 85% and cancellation rates are close to 90%, which has led to speculation that this could be the end of AirBnB.
Although Airbnb claims to be mainly hosted by locals who rent properties out that they live in, the reality is much different. The majority of listings are by professional hosts including landlords whose livelihood relies on short-term rentals for holidaymakers. Most have two or more properties perhaps with mortgages still to pay. With them being unoccupied for the past three months and not looking to be occupied at full capacity for the next three months at least, this could land them in a lot of payment arrears.
However, with the right targeted marketing campaigns, Airbnb could be saved by domestic travellers. It can often work out much cheaper for large groups and even couples to rent an Airbnb for a long weekend compared with a hotel.
Plus, it’s easier to save money when you have all the amenities to cook food and prepare drinks within your accommodation. Therefore, Airbnb could potentially make a comeback from the impact of the pandemic by understanding their domestic target market and finding creative ways to entice them in.
Overall, as people begin taking few short breaks rather than one long trip, we expect the future of affordable luxury travel to consist of increased domestic travel and increased demand for affordable luxury stays.
Interested in enjoying luxury travel on a budget? Check out our post on How to Live the High Life While Travelling on a Budget. For even more tips and tricks on this topic, check out our eBook, which provides exclusive insight on how to enjoy luxury travel on a budget.