The travel sector is largely recovering, but luxury market costs, which surged during the COVID-19 epidemic, continue to rise each month.
Virtuoso reports that luxury hotel prices have reached "peak levels," with average daily rates soaring by 70% over 2019.
Luxury train travel costs are skyrocketing, with Accor's La Dolce Vita Orient-Express seeing a 75% fare increase in 16 months, and prices for the Venice Simplon-Orient-Express doubling from February to March.
Most of the travel sector is back on course. However, the high costs associated with the luxury market, which increased during the Covid epidemic, aren't going down. In actuality, they are rising each month.
Most of the travel sector is back on course. However, the high costs associated with the luxury market, which increased during the Covid epidemic, aren't going down. In actuality, they are rising each month. (Photo : by YAMIL LAGE/AFP via Getty Images)
The luxury travel firm Virtuoso claims that this year's luxury hotel prices have hit "peak levels," with average daily rates rising 70% over 2019.
The cost of traveling by luxury train is also skyrocketing; in just 16 months, Accor's upcoming La Dolce Vita Orient-Express has seen a 75% increase in fares. The train, which is scheduled to arrive in Italy in 2025, increased its beginning price for a one-night trip last month from 2,000 euros in late 2022 to 3,500 euros ($3,776).
According to an examination of its website, prices on Belmond's Venice Simplon-Orient-Express, another opulent European train, also skyrocketed this spring, rising from £3,530 in February to £7,060 ($8,925) in March.
Many of the same factors that have driven up costs in other industries have also driven up travel costs: debt service rates, supply chain disruptions, inflation, and growing labor expenses.
The "old" costs for a five-star vacation, however, could no longer exist due to tourists' unwavering willingness to pay the higher fees.
Insights into Premium Travel Trends and Pricing Dynamics
Premium travel rates are remaining stable while growing prices and inflation decrease. This is due to the fact that "the demand is there" at noticeably higher rates, according to Henry Harteveldt, president of Atmosphere Research Group, a travel industry research firm.
According to him, affluent tourists also cherish novel and distinctive travel experiences, like taking a luxurious train. He said competition will keep prices in check for budget and mid-scale passengers.
While flights can be saved by booking in advance, hotel rates vary. The demand for travel is still high overall, but studies indicate that some tourists are starting to give in to the rising expenses.
However, according to Dave Goodger, managing director for Europe, the Middle East, and Africa at Tourism Economics, a business of Oxford Economics, this isn't having the same impact on the luxury travel market.
According to statements made to CNBC Travel, the luxury sector persists in its growth trajectory, notwithstanding the stagnation in economic activity observed in certain key developed markets. The industry is witnessing sustained upward pressure on pricing for luxury offerings, as highlighted by recent trends. This surge can be attributed to travelers upgrading their preferences towards more opulent experiences. Additionally, it underscores the resilience of income and wealth levels, alongside robust accumulated savings, particularly among affluent households.
