Report From the Inaugural Asia Luxury Travel Mart

Rising affluence, improving international flight routes and a growing hunger for travel are the key factors driving travel industry growth in Asia Pacific. As demand for plane tickets and hotel rooms soar, niche sectors are developing and luxury travelers could be the ‘next big export’ from Asia.

Leisure travel and the luxury variety, in particular is still in its infancy in many Asian countries, however, and the industry is trying hard to predict future trends. Defining the concept of luxury travel for a new generation of Asian travelers was, therefore, a central theme of the inaugural Asia Luxury Travel Market (ALTM) show held in Shanghai June 18-21.

Featuring 300 invited luxury travel buyers from across Asia and 300 upscale exhibitors from around the globe, ALTM is a spin off from the successful International Luxury Travel Market, held annually in Cannes, France. Billed as the first show to focus purely on Asian luxury travel, it attracted the world’s top luxury hotels, resorts and spas, tour operators and tourism boards from Dubai, India, Malaysia, New Zealand and Thailand.

The three-day show kicked off with a conference assessing future travel trends in Asia.

“There is no other region in the world with such an exciting growth potential for luxury travel than Asia Pacific, which is home to the world’s most populous nations and fastest growing economies,” said Serge Dive, co-founder of ALTM. “The luxury travel industry in Asia is already significant, but the potential for sustained growth is huge, given the explosion of wealth and prosperity in the region.”

Dive added, however, that the travel industry must approach the Asia Pacific market very differently than in the west.

“The vision of luxury is completely different here,” he said.

Roy Graff, managing director of ChinaContact, agreed. Using China as an example, he said: “In the west, luxury travel is an industry, not a niche, here it’s still at the craft stage. The middle class is still emerging, and leisure travel is very new. Ten years ago, the concept of luxury was simply a visa to visit a foreign country and a plane ticket.”

Delegates agreed that the luxury travel market in Asia is layered, with Japan and Korea already well established, and new market players, like India and China still feeling their way.

“Japan is a huge market for us, and Korea is picking up,” said Sonu Shivdasana, chairman and CEO of Six Senses Resorts & Spas. “I’m sure China will follow, as people live in thriving cities like Shanghai, which are very compressed, and they want to get out and experience a new lifestyle.”

Currently, Asian travelers are still preoccupied with using overseas trips as a way to demonstrate status making shopping and product-related travel more popular. But according to experts, that will change.

“The next generation of Chinese travelers will be more focused on the fun and experiential service aspects,” said Graff.

Learning about the needs and objectives of Asia’s current and future luxury travelers was a key objective for ALTM participants.

“The word luxury can be perceived as very negative in some markets, where it is often associated with wastefulness and being anti-environment,” said Matthew Upchurch, CEO of Virtuoso. “So, we’re here to really get a feel for what’s going on in Asia, and to listen and understand about the needs in Asian markets, as well as to speak with and meet suppliers.”

International luxury hotel chains have been researching and planning for growth in Asia for many years. Today’s boom in hotel development in the region has two objectives: to capture inbound visitors to the region and to familiarize outbound Asian travelers with hotel brands that they can use while traveling overseas.

Brand marketing is a key aspect of appealing to Asia’s ‘new luxury traveler.’ Ritz-Carlton, which will open the world’s tallest hotel in Hong Kong later this decade, has just launched a Chinese and Japanese language web site. Leading Hotels of the World is planning to do the same. It set up an office in Shanghai two years ago, but admits that outbound luxury travel will remain low for some time.

“Realistically, we are not expecting mass luxury volumes from China for a while,” said Mark Greedy, vice president Asia Pacific, Leading Hotels of the World.” It’s not easy to identify true luxury travelers here yet.”