GCC luxury spending spree 'on the rise'
Dubai, May 7, 2014
GCC nationals spend 260 per cent more on airfares against other nationalities, with between 40-60 per cent booking business class travel, said an industry expert, adding that the number of millionaires in the UAE is set to grow at 12 per cent annually.
They also spend 430 per cent more on accommodation and 558 per cent more on dining; so the opportunity to develop highly specialised offerings for the upper luxury bracket presents a unique challenge, added Mark Walsh, portfolio director, Reed Travel Exhibitions, citing a 2012 Credit Suisse report.
He was speaking at “Spotlight on Luxury”, a new seminar launched at the ongoing Arabian Travel Market (ATM) in Dubai, which discussed the evolving demographics of GCC millionaire community and expectations of the HNWI traveller.
The luxury segment of the hospitality and leisure industry was discussed in the seminar held with a panel of experts, who agreed that the high number of millionaires in the region has created a tiered set of expectations when it comes to all things luxury.
The seminar was attended by hosted buyers representing this valuable market segment, luxury destinations and high-end hospitality companies.
Given the scale of the number of millionaires in the region, the panel agreed that the expectations of individual HNWIs from across the GCC play a significant part in the travel decision-making process, which has led to the evolution of a tier system when booking anything from a first class airplane ticket to a private island stay.
"The luxury travel market is unique on different levels, but it works on a tier system where, for example, an individual will ask: ‘How much am I willing to pay for privacy’, but does this mean the individual is happy sharing [space] with two people or maybe more. It varies from person to person," said Scott Booth, associate research director at YouGov Mena.
The rising tide of younger millionaires coming on the scene is also changing the landscape of the GCC luxury market and the challenge for the hospitality and leisure industry serving this market is the ability to evolve to meet new expectations and demands.
"The demographics are changing and luxury needs vary and need to be considered, with the older generation expecting larger rooms and the younger generation looking to get out quickly and enjoy themselves," said Jacqueline Campbell, MD, The Travel Collection.
Haitham Mattar, regional VP of Sales, Hilton Worldwide, Middle East, Africa & Eastern Europe agreed with this outlook, adding that the new luxury hotels coming online are more understated than the ones historically used by the older generation.
"The luxury experience the younger generation in the GCC look for is different too," Mattar added. "It has to be memorable, and isn't necessarily about money; it's about what's different, and about individuality."
Luxury tourism, both inbound and outbound, is also heavily allied with high-end retail and a UK tourism report published by transaction company Global Blue noted that Middle East travellers made up 26 per cent of the total spend by international visitors between January and July 2013, with a focus on luxury goods.
However, transactions aren't limited to luxury goods, unique holidays and individual experiences are becoming increasingly popular.
"We need to offer experiences other people can't, and to do this we need to have dedicated teams on the ground. Local families from the GCC want to know how you plan to fill up their day from breakfast onwards; and we had one family, for example, who we took to Japan to train to become ninja warriors," said Debbie Duncan-Studart, travel counsellor, Abercombie & Kent.
High-end exhibitors at ATM 2014 include including well-known hospitality brands including Anantara Resorts & Spas, Mandarin Oriental, Kerzner International, Fairmont Hotel & Resorts, Raffles Hotels & Resorts and Swissotel Hotels & Resorts, Taj Hotels Resorts & Palaces, Oberoi Resorts & Resorts, Bulgari Hotels & Resorts and The Ritz Carlton Hotel Company; along with luxury destinations such as Monaco, Mauritius, Maldives and the Seychelles.
ATM 2014, the leading international travel and tourism event in the Middle East, opened on May 5 and will run until Thursday at the Dubai International Exhibition and Conference Centre. – TradeArabia News Service