Tourism players near and far are clamouring for a slice of Asia-Pacific’s ultra-wealthy pie, as the luxury market looks set to be among the first to rebound when travel resumes.
Gearing up to tap into that market, destinations are drawing up exclusive itineraries, re-packaging products and launching marketing campaigns targeting the region’s luxury travellers.
Speaking at the virtual ILTM World Tour Asia Pacific, Winston Chesterfield, director and founder of Barton Consulting, said: “Asia-Pacific is the fastest-growing region in terms of population, number of high-net-worth individuals (HNWIs) and total wealth. Given this, and their overall spend on luxury travel, there is going to be very strong growth from the region in the future.”
According to ILTM APAC and the Global Travel Recovery Report 2020, while HNWIs only form 0.15 per cent of Asia-Pacific’s overall population, they contribute 48 per cent to total global luxury travel universe (GLTU) spend.
Additionally, research carried out in 3Q2020 by luxury and wealth researcher ALTIANT revealed that Asia is home to the most HNWIs who claim money remains no object at 34 per cent. Meryam Schneider, vice president of marketing and partnerships, referred to this psychology as “revenge spending”. She noted: “These may be the most carefree spenders in the coming months.”
Schneider added in the short- to mid-term, the region’s HNWIs will travel within Asia. Rural areas with exclusive curated packages designed for families and small groups are predicted to be popular. She advised: “There needs to be customised marketing for the highest end of clients, with a special focus on Asians.”
Noting the potential, destinations across the globe are putting in place plans to lure this prime market to their shores.
Tourism Ireland has launched a luxury travel strategy to attract ultra-high-net-worth individuals (UHNWI) and HNWI travellers. Additionally, it has procured industry experts to advise on how to capture high rollers and prepare Ireland’s wealth of products for the world’s most wealthy.
Aisling McDermott, Tourism Ireland’s Middle East and Asia manager, said: “We know this market will come back first and we need to be ready. We have invested very heavily and are very much focused on targeting luxury travellers.”
McDermott added prior to Covid-19, 80 per cent of the country’s HNWIs came from the US, 15 per cent from Australia and New Zealand, and the remaining five per cent from the rest of the world. She said: “It is this five per cent I am targeting right now.”
In Japan, the private and public sector have been working together to form the Fujisan Luxury Tourism Consortium (FLTC). The initiative will officially launch in April and has curated a series of exclusive itineraries in and around Mount Fuji.
Tatsuya Masubuchi, CEO of HNWI consultancy Root and Partners which helped form the consortium, said the aim is to focus on small groups of less than 10 HNWIs. Activities include luxury hikes to previously unvisited parts of the area, helicopter transfers and exclusive wellness programmes that tap into the revered mountain’s sacred springs.
With Japan slated to form travel bubbles with various Asian countries first, Masubuchi is confident itineraries that offer pristine nature away from the crowds in spiritual surroundings will appeal to Asia’s big spenders.
In October, Luxury Travel Vietnam rebranded and expanded its services offering high-end, tailor-made tours across Vietnam, Cambodia, Laos, Thailand and Myanmar. Operating as Lux DMC Travel, its products now cover all of South-east Asia, Japan and Korea.
Pham Ha, CEO, said: “It’s forecast there will be an increase in high-end tourists who have a demand for travelling after Covid-19. Therefore, our expansion will help us offer more choice. After Covid-19, attracting more customers from the luxury market will help us to recover our business quicker.”
In the wake of the pandemic, the company has recruited travel experts, changed its marketing strategies, and designed a raft of itineraries to cater to the shift in demand from high-end travellers and new markets.
In spite of this appetite for Asia’s elite, Nick Ray, product director at Hanuman Travel which predominantly works with Europe and the US, said switching direction during Covid-19 times is far from easy.
He explained: “Everyone would like to pivot towards this market but it doesn’t happen overnight as there are already many companies with established partnerships. This can take a long time and is usually done by attending trade shows or visiting a country to have face-to-face meetings. Obviously, we can’t do that right now.”
However, he predicts that when borders start to reopen, there will be a surge in tourism companies switching from B2B to B2C. He said: “This will happen quickly as there will be a massive pent-up appetite for travel to tap into.”
Despite prevailing domestic and international travel restrictions, the majority of Asia-Pacific travellers are determined to resume leisure travel before the end of 2020, according to data from Amadeus.
In the latest Destination X: Where to Next report, which polled 1,050 respondents across Asia-Pacific, 27 per cent of travellers expressed a strong desire to travel immediately once travel restrictions lift, with 37 per cent planning their next trip one to three months after they lift.
While there is a strong preference to go farther from home, 70 per cent of Asia-Pacific travellers are ready to travel domestically. In fact, the average time spent on holidays will not change, with half of travellers seeking a trip duration of 14 days or more.
Reconnecting with family and friends is the predominant reason for 55 per cent of Asia-Pacific travellers planning their next leisure trip in the coming months. At the same time, travellers are also seeking a sense of adventure to satisfy their pent-up wanderlust, with 34 per cent opting to explore unfamiliar destinations for ‘new travel experiences’ and 32 per cent desiring to ‘reconnect with the outdoors’.
Ramona Bohwongprasert, senior vice president, retail in travel channels, Asia Pacific, Amadeus, said: “The data tells us that travel demand is there. Across Asia-Pacific, travellers are energised and ready to holiday within their own shores this festive season, to reunite with family and friends or explore new destinations that offer outdoor getaway experiences.
“However, their behaviours have changed, with travellers not willing to commit to holiday plans too far in advance and Covid-19 factors such as on-site cleanliness and testing measures now weigh in when travellers evaluate accommodation and transit options. Travel sellers and operators will need to cover new ground to provide the experience that domestic tourists are seeking this coming holiday season.”
Customised travel experiences win out over pre-packaged leisure travel options, with 70 per cent of Asia-Pacific travellers preferring to curate their own holidays and/or with the help of a travel agent. Group and guided tour packages have dramatically declined in popularity, with only eight per cent of travellers considering a holiday package cruise of more than 50 people.
Travel spontaneity is also a thing of the past, with travellers spending more time researching before booking their next getaway. ‘Price tailored to my needs’ and ‘severity of the Covid-19 health crisis at the destination’ are the most influential factors for purchasing decisions. More than two-thirds of travellers believe that upfront knowledge of Covid-19 prevention measures is ‘very important’.
Gaurav Bhatnagar, director at Travel Boutique Online, said: “To help travellers rediscover their cities, and regions and support local tourism experiences, travel agents will need to get creative on ‘what to sell’. The domestic travel market will be highly competitive this holiday season, so offers must be eye-catching and personalised. Travel agents will need to reimagine how they sell and package domestic travel experiences by adding flexibility and identifying new segments that are less explored.”
Convincing travellers that it is safe to travel via airlines will be a priority for travel sellers, with Asia-Pacific travellers more likely to say they are ‘less than comfortable with flying but will continue to do so’. New features such as touchless kiosks that use QR codes and mobile boarding passes, combined with new policies such as mask compliance and removal of middle seats, could help to boost confidence.
Insurance is now an integral part of the travel purchase, with 47 per cent of Asia-Pacific travellers likely to purchase travel insurance for every trip, where once it was an afterthought. Another important factor to the traveller journey this holiday season is the travel agent. One-fifth of travellers expect to lean on travel agents for their next domestic trip, for recommendations, problem-solving and support.
In interviews conducted by Amadeus with travel agency executives across Asia-Pacific including Australia, India and the Philippines, 38 per cent believe the way they sell travel will change this year. Travel agents are looking to get ‘more creative’ in their selling strategy, to shape and tailor travel offers to specific traveller personas, as well as highlight added flexibility and insurance coverage.
Kit Sananwathananont, managing director of G.M. Tour & Travel, said: “Travellers will demand a higher level of personalisation, reassurance and empathy this holiday season. Travel agents that combine technology with a ‘human touch’ can deliver excellent customer service that will have a positive impact on travellers’ trust and loyalty, and ultimately help jump-start the travel industry for 2021.”