No one would accuse destination and travel brands of ignoring their luxury travel customer base over the last few years, but the economic and cultural conditions of 2025 demand that everyone review and update their luxury travel brand strategy to meet the moment and have a successful year.
Heart+Mind Strategies is an insights, strategy, and activation consultancy with decades of experience performing original research and creating custom brand strategies for travel and tourism organizations instantly associated with luxury such as the Las Vegas Convention & Visitor Authority, Wynn Casino and Resort, Aria City Center, MGM National Harbor, Bermuda, and Mallorca.
RELATED: Heart+Mind’s Travel and Tourism Industry Experience
Why Is This Essential Now?
Two main economic conditions are going to force destinations and travel brands to realize a larger and larger portion of their annual visitor volumes and revenue from luxury travelers in 2025 and beyond.
1) Top Earners Make Up Half of All Spending
First, income inequality continues to worsen especially in the United States. In 2025, the top 10% of earners – households making at least $250,000 a year – now account for 49.7% of all consumer spending. According to Moody’s Analytics, this marks an all-time high since 1989. Working class and middle-class Americans have had their personal finances exhausted by high prices and stubborn inflation over the last several years, and this has caused their consumer spending to drop throughout 2024. Meanwhile high earners and the wealthy haven’t felt pressured to cut back and their spending actually grew by 12% throughout 2024 (WSJ).
2) Burden of Rising Costs on Middle and Working Class Travelers
Second, we expect these trends to be even more pronounced within the travel and tourism sector. Following the COVID-19 crisis, working class and middle-class travelers had increased their earnings, boosted their savings, paid down their debts, and were able to widely participate in the wave of “revenge travel” that started in earnest in 2021. But now, these travelers are burdened by across-the-board cost increases, rising credit card debt, and the threat of layoffs and a recession. Some economic forecasts anticipate that over 60% of all travel and tourism revenue will come from the luxury traveler segment in 2025.
The Challenge Grows
We assume that the economic trend and forecast data illustrating the importance of luxury travelers doesn’t come as a surprise to anyone in the travel and tourism industry, which means that competition will be fierce between destinations and travel brands as they increasingly compete for the attention and loyalty of a smaller subset of travelers simultaneously.
If you do not have a custom luxury brand strategy you will not be able to effectively differentiate yourself in a crowded and evolving market, and you risk falling behind those that do. The most resource efficient way to approach your luxury travel brand strategy is by better understanding and leveraging the luxury travelers already within your existing visitor profile. Whether you’re Las Vegas or Cleveland, there is growth to be realized through more precise insights and thoughtful strategy.
KEEP READING: Luxury Traveler Part 2 – Every Destination Can Be a Luxury Travel Destination