Luxury Travel sector wooing the Chinese and Indian traveller

Luxury travel no longer has remained as a privilege only for the European and North American nationals. The rapidly growing affluent class in India and China has marked its influence on the global luxury travel companies. International travel brands have changed their marketing strategies and customized their products and offerings so as to make the most out of this new age travelers. These companies have concentrated their efforts on China and India, the epicenter of luxury travel demand growth.

Companies are in no mood to neglect these nations and so they are announcing new programs, altering the room amenities and even responding to their clients’ choice of delicacies. Starwood Hotels and resorts have announced new programs especially for the Chinese tourists in order to provide them with at-home experiences. Some of the hotels have included special Chinese menus, launched a hotel website in Chinese language and offer Chinese newspapers. Cashing in on the travel boom in China and India has emerged as a present-day opportunity that is expected to reach new heights in the near future.

The global luxury travel market has seen an increase in the number of luxury travelers from emerging nations, – especially from China and India. The increase in the number of luxury travelers is mainly attributed to an increase in the Chinese and Indian HNWI population. As per the Hurun Research Institute, there are 2.8 million US$ millionaires in China in 2013, depicting a year on year increase of 4%. Today, Chinese travelers account for around 25% of the global luxury consumption.

Chinese travelers have surpassed their German counterparts to emerge as the world’s biggest travel spenders, notching more than US$102 billion in 2012 compared to just US$84 billion spent by German travelers. In China, 70% of Class A consumers are under 50. Social Class A consumers are those whose incomes are over 200% higher than the average gross incomes of all individuals aged 15 and over.

In India, the under-40 age group will continue to account for a significant proportion of social class A consumers. For Indians, luxury travel sums up as a personalized travel experience. It starts from first-contact and continues through post-tour relationship management. High-end luxury travelers demand experiential travels that add value to their lifestyle in some way.

The Luxury market in India is at a nascent stage, but it has experienced 20-25% growth year-on-year.The Indian traveler’s mindset has evolved over time from being economic budget centric to experiential high end luxury indulgence. Responding sensibly to this change, travel companies have customized their offerings to capitalize on the changing demand of the Asian luxury traveler. Key happenings include:

  • Experiential travel: Growing and influential new sophisticates from China, India and Indonesia, who value experience above status, are leaving ‘vanilla’ travels for Yangtze River cruises, Galápagos Islands tours and bespoke ultra-safaris.Hotels such as Raffles in Singapore, with heritage tales to tell, and unique boutiques such as The Upper House in Hong Kong, are some of the prime accommodation of choice. According to Vikram Madhok, managing director, Abercrombie & Kent India, ‘The day of the vanilla holiday destination is gone,’
  • Status Hunters: A special class of travelers known as “Status Hunters” seek the services of travel agency that allows them to enjoy the craftsmanship of products and buildings. These travelers relish the artistry of a product or an iconic building while travelling.
  • Internet savvy travelers: Smart brands offer social media review opportunities to the internet-savvy, affluent young guns from China and India who prefer to conduct comparison shopping online. Hotel brands too have responded well to this trend. A lifestyle site has been launched by The Starwood Hotel chain especially for the Chinese consumers. The W hotels brand, a subsidiary of Starwood Hotel even allows visitors to post live Twitter reviews on its website.
  • Women travelers: Working women travelling alone for the first time are assisted by female-only travel services that cater to the needs of lone female travelers. A woman on Wanderlust (WOW) is one such Indian travel agency that organizes exciting trips for women interested in exploring the world.Leading Indian hotels, such ITC Gardenia in Bangalore, which has sister properties in India’s major urban centres, are targeting the lone female travelers. Chinese women are becoming more confident about travelling. ‘Nowadays the Chinese, and Chinese women in particular, have a preference for independent travel versus group travel,’ says Gabriela Henrichwark, group marketing director, COMO Hotels and Resorts. The travellers are able to travel independently due to ease in visa and passport formalities.
  • Travel brands are offering high-end accommodation and transport services to millions of luxury pilgrims in India. Such services are specially designed to combine religious pilgrimage with five-star accommodations and spa treats. A new luxury train service called Deccan Odyssey connects Delhi with five of Sikhism’s holiest places including Amritsar’s Golden Temple. The nine-day service is sponsored by the Punjab Heritage & Tourism Promotion Board, where (Punjab) 60% of the population is Sikh.
  • Young Indian, Chinese and Japanese ultra-honeymooners are booking £200,000 wedding and honeymoon packages in Bali, Hawaii, and the Maldives.
  • China’s self-made “Frugal Millionaires” (a class of Chinese affluents who have recently acquired wealth through the success in their enterprise) are price sensitive and are challenging brands to provide five-star luxury at a discount.
  • There is rise in the class of environmentally sensitive travelers also known as Green shoots, who want to contribute to nature while enjoying their travel errands. Song Saa, a private island resort in Cambodia, is one of the brands that Green Shoots travellers are seeking. It has funded waste-management systems for nearby villages and has set up a local school providing free education.
  • Luxe Pack travelers, who travel across the globe with friends and extended family, have promoted the introduction of luxury family travel offers. Abercrombie & Kent has launched a brochure aimed at Luxe Pack travellers. The company offers multiple-bedroom properties in a single booking with the deluxe comfort of a private home.

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