Chennai: While the middle class is hit by inflation, the affluent class is spending more leading to the growth in the premium segment of consumer products and services. This is true in the case of travel as well. Travel and hospitality sector is seeing the premium segment increasing its share.
As per the data from Makemytrip,com, travelers are increasingly spending on business class air travel and premium rooms in hotels this year.
It finds that business class bookings across domestic and international flights have grown by 50 per cent during the Christmas time compared to the same period last year.
Of this, international flights saw 80 per cent increase in business class bookings, while domestic flights saw 27 per cent growth in business class bookings.
This drive towards premiumization was evident in hotel bookings as well. Hotel rooms priced above Rs 10k per night in domestic destinations have seen their share in booking increasing to 22 per cent this year from 20 per cent last year.
In the case of international destinations, hotel rooms priced above Rs 10k have increased their share to 57 per cent against 51 per cent in 2023.
“The trend toward premiumization is becoming increasingly pronounced, as travelers are willing to spend more for a memorable holiday, " Rajesh Magow, Co-founder and Group CEO of MakeMyTrip said.
However, the premiumization trend is not just a travel phenomenon. Across consumer goods and services, the premium segment has been steadily growing while the budget segment has remained affected by the vagaries of the economy like inflation and slower wage growth.
“We are seeing the rich getting richer and the poor poorer. The growing number of affluent families are making the most of holiday seasons after the pandemic. They are not bothered about spending more for quality travel. The younger generation of these families, who are aware of the travel destinations through the internet, also want to enjoy holidays and insist on premium services. The number of travelers from such families are growing, leading to the premiumization of travel,” said Iqbal Mulla, president Global Tourism Council.
Further, as travelers become mature, they look for memorable experiences apart from sightseeing and this too makes them put more money into travel to create memories.
