‘Adapt luxury tourism’ to lure new middle class

Posted on October 24, 2012


Luxury tourism should be redefined to meet the new demand among middle-class tourists who are expected to become more influential in the Asia-Pacific region in the next five years, tourism industry leaders were told at a forum last week at the fifth ITB Asia trade show in Singapore.

At this Asian business-to-business event that duplicated the original version in Berlin, Horst Schulze, chairman and chief executive officer of Capella Hotels Group, a leading global luxury-hotel operator, said that in the next couple years there would be a huge influx of tourists in the region from emerging countries. This could create more sophisticated demand, particularly for luxury experiences, because middle-class tourists are expected to be the mainstream of tourism in the near future.

Schulze, a former president of the Ritz Carton luxury-hotel chain, said: “Now luxury service needs to be redefined from traditional luxury into two markets – ultra-luxury and affordable luxury.”

He suggested that service was now the key point to retain existing customers, not merely good hardware or ambience.

Ultra-luxury should offer exclusivity and individualised services, while affordable luxury would cater to younger customers.

Normally, upscale customers account for 10 per cent of tourism spending. But with the increased number of middle-class people in Asia, travel operators who want to lure sophisticated customers should understand what affordable luxury is, he said.

Singapore is one of the countries that want to attract upscale tourists and increase receipts from the luxury market. At a separate conference at the Asia Pacific Tourism Destination Investment event, which took place alongside ITB Asia, S Iswaran, the city-state’s second minister for trade and industry, said the government had invested 500 million Singapore dollars (Bt12.5 billion) in Marina Bay Cruise Centre, expected to open officially soon.

Under this project, Singapore aims to see more cruise-ship travellers, who are considered big spenders. The government expects to see their numbers hit 1.5 million in three to five years from almost a million last year.

Deepak Ohri, CEO of Lebua Hotels and Resorts, a leading luxury-hotel operator who also took part in ITB Asia, said Thailand had cultural resources and great services. So it is not difficult to add those things to make a difference for Thai luxury services.

“Luxury is linked to experience and sensation, not price. If we could deliver luxury service in accordance with a customer’s need, the price would be nothing,” Ohri said.

Apart from Thai hospitality and such assets as cultural performances, traditional cuisine and Thai spas, Ohri suggested that alternative tourist destinations in the Kingdom – including Khao Yai, Chiang Mai, Hua Hin and Krabi – could be promoted as luxury destinations for foreign visitors.