Chennai: While the middle class has been hit by inflation, the rich are spending more to increase the premium segment of consumer goods and services. This is also true in terms of travel. The travel and hospitality sector is witnessing the premium segment increasing its share.
According to the statistics of Makemytrip.com, travelers are spending more on business class air travel and premium rooms in hotels this year.
Compared to the same period last year, it has been found that the booking of business class on domestic and international flights has increased by 50 percent during Christmas.
Out of this, business class bookings of international flights have increased by 80 percent, while business class bookings of domestic flights have increased by 27 percent.
This drive towards premiumization was also evident in hotel bookings. It has been seen that 22 percent of hotel bookings in domestic destinations above 10,000 rupees per night have been booked this year compared to 20 percent of last year.
In case of international destinations, the share of hotel rooms above 10,000 rupees has increased to 57 percent compared to 51 percent in 2023.
“The trend towards premiumization is becoming increasingly evident, as travelers are willing to spend more for a memorable vacation,” said Rajesh Mago, Co-Founder and Group CEO, MakeMyTrip.
However, the premiumization trend is not just a travel phenomenon. While the premium segment in consumer goods and services continues to grow, the budget segment has been affected by the volatility of the economy such as inflation and sluggish wage growth.
“We are seeing the rich getting richer and the poor getting poorer. A growing number of wealthy families are making the most of the post-pandemic holiday season. They don’t mind spending more for quality travel. Aware of travel destinations through the Internet, the younger generations of these families also want to enjoy vacations and insist on premium services. The number of such family travelers is increasing, thereby increasing the premiumization of travel,” said Global Tourism Council President Iqbal Mulla.
Moreover, as travelers mature, they look for unforgettable experiences other than tourist attractions and this makes them spend more money on travel to create memories.