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Travel Special: Expert: China expected to rise in luxury travel market

By Zhuan Ti | China Daily | Updated: 2013-07-31 07:41

Travel Special: Expert: China expected to rise in luxury travel market

Industry insiders exchange insight at the opening forum of the annual International Luxury Travel Market Asia in Shanghai in June. Photos Provided to China Daily

Travel Special: Expert: China expected to rise in luxury travel market

Sub-forum on education during the luxury travel trade show.

Travel Special: Expert: China expected to rise in luxury travel market

China will figure more prominently in the global luxury travel market, according to experts.

Lu Xiao, an assistant professor specializing in luxury brand management at Fudan University, said due to the country's rapid economic development, many people are seeking new experiences and this will play a dominant role in the luxury market in the future.

"Now Chinese people account for 25 percent of global luxury consumption," Lu said during the opening forum at the annual International Luxury Travel Market Asia last month in Shanghai.

He said China has 2 million people whose personal assets exceed $2 million but nearly 60 percent of them have yet to spend their money on luxury services.

"To spot them, get them involved, communicate with them and offer services they want are key to luxury brands' success," Lu added.

Alison Gilmore, ILTM Asia's director, said the Chinese are becoming a major sought-after target in the luxury travel market.

The Chinese rank third by popularity among luxury travel agents after South Koreans and Australians at the ILTM Asia, which attracted 497 potential buyers and nearly 500 exhibitors from around the world.

Gilmore said the event was designed to bring the world's premium creators of luxury travel experiences to discerning buyers, adding that her organization tries its best to attract more wealthy Chinese people.

"We are always interested in new buyers, planners and luxury travel suppliers, although they must undergo a strict qualification process," Gilmore said.

Robert Cheng, vice president of marketing at the Peninsula Hotels group, said his company has been attending the ILTM Asia in Shanghai for six years, as well as the ILTM in France.

"Both are very useful and beneficial to us. These trade shows allow us to focus our targeted audience," Cheng said.

The company plans to open a new hotel in Paris very soon, and hopes to target the traditional luxury travelers from the United States and Europe as well as those from the emerging markets like Asia.

Favorite option

A Hurun report released at the exhibition indicates that travel accounts for a major part of the Chinese people's luxury consumption.

The Chinese Luxury Traveler 2013, compiled by surveys of about 100 Chinese people whose personal assets exceed 10 million yuan ($1.63 million), shows that 63 percent of the wealthy in China choose travel as their favorite form of entertainment, with France, the US and Singapore as the top three overseas destinations.

"Paris is a very potential destination. It is very encouraging to see the upcoming travelers from Asian and Middle East countries," Cheng said. "Definitely the development of China market is like many markets many years ago, and I think China is more than ready for outbound travel."

Fledging overseas travelers tend to go in group tours and stay in budget hotels. When they become more experienced travelers, they prefer to travel individually and pick more comfortable luxury hotels like Peninsula, he said.

The Hurun report also places Chinese travelers first in regards to spending for three consecutive years. In 2012, they accounted for 24 percent of tax-free consumption worldwide, 8 percentage points higher than Russians.

On the rise

The Chinese people's per-purchase spending is also on the rise, hitting 875 euros ($1153.4) in 2012, an eight percent increase year-on-year, according to the report.

Rupert Hoogewerf, chief researcher and CEO of Hurun Inc, said those in the global tourism industry have to know more about Chinese travelers as they have become the most important customers.

Statistics from the China Tourism Academy show that the Chinese made 8.32 million overseas trips in 2012, an 18.4 percent annual increase.

As China overtakes the US as the largest source of overseas visitors, more and more international hotel brands are tapping into the second largest economy.

Paul Kerr, CEO of London-based Small Luxury Hotels of the World, said he has high expectations of the Chinese market.

Founded in 1991, SLH offers some 520 luxury small independent hotels in more than 70 countries that provide "exceptional" facilities and experiences, according to its website.

Following the philosophy of small hotels and great experiences, Kerr said SLH hotels have an average of 50 rooms because the smaller size can help offer better-personalized services.

He added SLH also offers a balanced variety of downtown hotels, resorts, and rural villas.

To meet Chinese travelers' demand, the company launched a Chinese-language website to facilitate bookings.

Starwood Hotels and Resorts Worldwide is attracting travelers with its mobile innovation.

Last August, the company launched an app marketed for Chinese travelers. Since then, it is seeing fast growing mobile bookings in China.

There were more than 1 million mobile bookings in 2012, more than three times the number in 2011, said Chris Austin, vice-president of global retail leisure & luxury sales at Starwood, in a speech at the ILTM Asia 2013.

"We have also seen triple-digit revenue increase for Chinese mobile hotel booking in 2012," Austin said.

According to the Chinese Luxury Traveler 2013, overseas travelers stayed an average of five nights in hotels. Insensitive to prices, what they consider most are locations, brands and services when choosing hotels.

The report shows Chinese travelers' favorite hotels were Shangri-La, Hilton and Peninsula in 2012.

zhuanti@chinadaily.com.cn

(China Daily 07/31/2013 page10)

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