High-End Hotel Market Segmentation: APAC

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High-End Hotel Market Segmentation: APAC


Tourism seems to be the dominant motivation for APAC luxury hotel customers. One hotel reports that German and Scandinavian customers are disproportionately represented among their customers, but this data may not extrapolate out to all APAC luxury hotels. Unfortunately, we were unable to find a broad cross-section of data sources that broke down APAC luxury hotel customers with enough detail to present a high-confidence, detailed picture of all such customers. Some helpful findings that our research team uncovered have been presented below.

Findings

  • Sule Shangri-La, Yangon, is a luxury hotel in Myanmar, Southeast Asia, that features 470 rooms and suites.
  • Per a survey done among the customers of this luxury hotel, hotel users' purpose of travel could be segmented in the following ways:
-- Tourist: 90.6 percent
--Business: 1.8 percent
--Visiting Friends/Relatives: 1.8 percent
--Others: 5.8 percent
  • In terms of origination location the hotel customers had the following segmentation:
--ASEAN: 13.5 percent
--Asian: 4.1 percent
--European: 5.3 percent
--German: 28.1 percent
--Scandinavian: 31.0 percent
--Others: 18.0 percent
  • Although the segmentation was not available as generations (millennials, Gen X, boomers, etc), but it was available by age:
--Under 30 years: 15.2 percent
--31 — 40 years: 19.3 percent
--41 — 50 years: 18.1 percent
--51 years and over: 47.4 percent

Types Of Emerging Travelers In Asia Pacific:

  • Although this data is not specific to the users of luxury hotels, the types of travelers in Asia Pacific all into the following categories:
--EXPLORER: People who place high value on self-actualization and discovery: 38 percent
--FOLLOWER: People for whom travel is about enjoying the moment with loved ones: 23 percent
--CONNECTOR: People for whom travel is about establishing status: 20 percent
--OPPORTUNIST: People who like to travel to pamper themselves but are also tempted by promotions: 18 percent
  • Also in terms of country of origination Asia Pacific travelers break out as follows:
--China: 16.2 percent
--South Korea: 10.5 percent
--Taiwan: 7.0 percent
--USA: 6.7 percent
--Japan: 5.8 percent
--Other: 50.0 percent

Additional Information

  • For luxury hotel users in the city of Shanghai, China the demand from business and MICE travelers is increasing.
  • In their luxury travels, affluent Asian consumers are seeking new forms of wellness experiences in the face of hectic modern lifestyles. They are looking to combine their wellness mindset with the escapism of luxury tourism.
  • Following this development as mentioned above, pioneering brands in the luxury hotel market are now offering retreats with holistic wellness, featuring cutting-edge techniques, technologies, and services.
  • Per the Asia Pacific Hotel Investment Outlook and Trends 2019 report by JLL, the modern-day luxury consumers are increasingly seeking out experiences, placing less emphasis on acquiring material goods.
  • In selecting hotels, Asian travelers, particularly those from China, value hotel brands much more than Europeans, with 82 percent of Chinese travelers indicating hotel brands as an important factor while choosing hotels.


Research Strategy:

We began our research with respected market research sources such as Markets and Markets, Mordor Intelligence, Market Research, Technavio, GMinsights, and their peers. We also explored data from consultancies such as Accenture, Deloitte, PWC, McKinsey, and BCG. Although these sources often publish detailed market data, we did not find any freely available report that broke out the data on Asian luxury hotel customers with enough granularity to be useful.

Next, we turned to hotel industry sources, such as the Global Hotel Alliance, Global Hotel Network, STR Global, and International Hotel & Restaurant Association, among others. Unfortunately, this source also failed to offer sufficiently specific data segmentation.

Our next strategy was to look at booking and travel sources along the lines of Expedia, GoIbibo, and Trivago. While some of these sources provided insights into the preferences of travelers, the data that emerged from this strategy was not sufficient to create a complete picture of the APAC luxury hotel customer.

Thinking creatively, our research team explored the idea of compiling additional data by surveying interviews and thought leadership pieces written by C-level executives in and associated with major hotel chains in Asia. We looked at the writings of leaders from The India Hotels Company, Shangri-La Group, Oberoi Group, Aman Group, Pan Pacific Hotels Group, Mandarin Oriental Group, and others. This strategy did not bear fruit.

We tried broadening our scope to include business-related press from well-regarded general media sources such as South China Morning Post, Sydney Morning Herald, Bangkok Post as well as global business publications such as Forbes, Business Insider, and CNBC. These sources provided only a few additional insights.

As a final strategy, we turned to academic writings, exploring research papers from Academia and Research Gate, etc. This strategy produced a few helpful findings but the statistics often lacked the specificity needed to be truly useful.
Sources
Sources

Quotes
  • "Idyllic luxury in a modern metropolis Step into the heart of one of Southeast Asia’s exciting cities. Conveniently located in the heart of downtown Yangon, the Sule Shangri-La, Yangon, features 470 rooms and suites from which stunning views over the city and its iconic pagodas can be relished."
Quotes
  • "While the Shanghai market has 22,071 rooms in the pipeline over the next few years, new openings in 2017 are concentrated in the luxury segment, with their impact expected to be felt in 2018. Demand from business and MICE travellers is increasing, and leisure demand remains strong. Looking ahead, the market should experience a growth in both occupancy and ADRs."
Quotes
  • "The term "MICE" in the context of travel is an acronym for meetings, incentives, conferences, and exhibitions. The MICE market refers to a specialized niche of group tourism dedicated to planning, booking, and facilitating conferences, seminars, and other events, which is a big moneymaker in the travel industry."
Quotes
  • "The Global Wellness Summit (GWI) Global Wellness Tourism Economy report stated that the industry is worth USD 4.2 trillion globally, a year-over-year growth of over 12%. In APAC, the corporate wellness market alone is expected to reach US$7.4 billion by 2024 (transparency market research) representing a growth rate of 9%, and Asia has been the fastest-growing region in both wellness tourism trips and revenues for each of the last five years."
  • "Affluent Asian consumers are seeking new forms of wellness experiences in the face of hectic modern lifestyles and the pressures brought by professional demands, environmental pollution and the invasion of social media. This is greatly impacting the travel industry as consumers look to combine their wellness mindstyle with the escapism of luxury tourism."
  • "The consumer drive for health and wellness means that they are exploring innovative and exciting wellness throughout forms of hobbies, sports, relaxation and life. While a fitness centre and spa may have been the sum total of a luxury resorts ‘wellness’ offering in years gone by, the most pioneering brands are now offering retreats with holistic wellness, featuring cutting-edge techniques, technologies and services."
Quotes
  • "Modern-day luxury consumers are increasingly seeking out experiences, placing less emphasis on acquiring material goods. Hotel markets are seeing strong demand for high-end experiential luxury travel."
Quotes
  • "Asia Pacific’s luxury travel market will see faster overall growth than Europe’s from 2011-2025, but will decelerate from 2015-2025"
  • "Some of the fastest growth in the luxury travel market is being driven out of Asia Pacific. Asian luxury travellers have a unique set of motivations and needs – understanding what drives their travel behaviour and providing a personalised experience will be critical for travel providers"
Quotes
  • "Asian travellers are most interested in hotel brands they trust, UK travellers least interested in brands"
  • "These results show that travellers in general are getting more sophisticated, they are more interested in experiencing the cultural enrichment of a destination over the weather,” said Janice Lee Fang, Communications Director of TripAdvisor in Asia Pacific."
  • "When selecting hotels, Asian travellers, particularly those from China, value hotel brands much more than Europeans, with 82% of Chinese travellers reporting that it is important to stay in a hotel with a brand name they know and trust."