China to Dominate Global Luxury Travel in the Next Decade

  • Published by Vedat
China will continue to drive and dominate luxury global travel over the next eight to ten years as the number of people looking for new avenues to spend grows in parallel with its economy, according to Dr Pierre Xiao Lu, an international expert on luxury brand management and a Professor in luxury brand marketing at Fudan University.
Dr Lu was speaking at the ILTM Asia 2013 Opening Forum at the Shanghai Theatre, Portman Ritz-Carton on the eve of the region’s leading luxury travel event, taking place in Shanghai this week.

“China, given its anticipated GDP growth rate of 7.75% over the next decade will overtake the United States and become the largest economy in the world,” said Dr Lu.

“Already there are some 2 million millionaires or super rich with fortunes ranging from nearly US $2 million to $10 billion in China and the greater China region accounting for about 25% of the world’s international luxury brand consumption.”

However, nearly 60% of China’s rich – described by Professor Lu as luxury ‘intellectuals’ and luxury ‘laggards’ - had still not bought extensively into the luxury brand experience, still needing to be convinced of the benefit and reward of the luxury experience.

“The key to the success of luxury brands however will be how they identify, engage and interact with China’s wealthy and create experiences which are tailored to suit and fit their needs and aspirations,” he said.

The Forum also included two panel sessions: “Trends Among Pan Asian Travelers” and “Building Loyal Customers Among Asian Travelers”.

The first panel featured Janet Tan-Collis, Chief Executive of East West Planners and David Chai, Director of Product Development, Tidesquare and the second, Markus Engel, Chief Executive Officer of Urban Resort Concepts; Michael Hobson, Chief Marketing Officer of Mandarin Oriental Hotels and Marissa Sukosol Nambhardi, Executive Vice President of Sukosol Hotels.

On the first topic, “Trends Among Pan Asian Travelers,” Janet Tran-Collis said, “It is important that international luxury properties present their offerings to potential travellers in developing markets such as China, Russia and South America in a way that makes them feel comfortable in selecting a destination, particularly language, cultural traits and needs. End to end support and understanding is the glue to personalised service. Social media also plays a role in overcoming concerns particularly if fellow nationals are seen expressing their views on a hotel offering and their experience of it.”

David Chai said, “There is a need for brands to better understand the needs of the local market and tailor their offerings to meet regional needs and expectations. All offerings should be thoughtfully structured and transparent. Social media channels are an important part of the marketing mix to potential clients, with bloggers in particular having a significant influence in the decision making process.”

On the second topic, “Building loyal communities among Asian Travelers”, Markus Engel said “the luxury experience has its foundation at the individual property level. Success is not driven by loyalty point programmes - it is important to provide a personal touch and reach out to guests, listen to them and build a long term direct rapport. A luxury property cannot be everything to everybody. Social media is not the key driver to promote luxury property offerings: while it is necessary to provide base information, luxury clientele are driven by knowledge and experience.”

Michael Hobson Chief Marketing Officer of Mandarin Oriental said, “A luxury image and the provision of service is based on a sophisticated CRM programme, which enabled valuable customers to be recognised no matter which hotel they booked into around the world. This ensures consistency and a delivery of treatment on a personal level. Loyalty point programmes cheapen luxury brands. Social media should be part of the marketing mix, but be used with discretion and control.”

Marissa Sukosol Nambhardi, Executive Vice President of Sukosol Hotels said, “Loyalty point programmes for luxury hotels would not work. Luxury hotel operators needed to be more discerning and committed to customers’ personal needs. They must know each of their guest’s idiosyncrasies. Through listening to clients, operators must strive to build properties and provide services that they want. Staff must also understand the brand and be empowered to deliver it.”

In the final interview, Yat Chung Koh, President, Asia Card Services, American Express said, “Having a strong brand image, matched with trust and integrity was paramount if a company was to succeed in any market place. Underpinning this was the need for the company, like luxury brands, to understand their customers and respond to their needs and aspirations. The company had 800 million cards in circulation in China at the end of 2012 and this number was growing strongly across all segment offerings.”

“Growth in the region was occurring in China, Hong Kong, Japan, Singapore and emerging markets of the Philippines and Indonesia, which coincided with a rise in personal income ceilings,” he said.

Alison Gilmore, Exhibition Director of ILTM Portfolio said, “It is our aim to ensure that in delivering luxury travel events we satisfy and exceed the needs of the industry. As a result, this year’s ILTM Asia increased the number of participating buyers by 11%. In our continuing efforts to support the industry, ILTM is committed to growing its events in the Americas, Japan and Africa and will launch a new show, ILTM Spa in London in September. We want to provide cost effective solutions for the industry, not only today but into the future.”

The event is staged over the next three days concluding on Thursday, the 6th June 2013. For further information, please visit



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