The rise of the middle class in Asian populations is a trend that is finally tilting the balance of consumer purchasing power towards Asia.
This has important ramifications for travel companies serving the region. At the by invitation Asia Travel Leaders Summit (ATLS) 2012, a joint-study by Singapore Tourism Board (STB), The Boston Consulting Group (BCG) and Visa revealed that by 2020, Chinese, Indian and Indonesian Middle and Affluent Class (MAC) travellers alone will contribute US$300 billion in outbound travel spend.
While statistics like this are heartening and many attractive business opportunities await, there are also an abundance of challenges for those seeking to capture a slice of Asia’s consumer market.
With their increasing wealth, Asian consumers are becoming more sophisticated and are demanding products and services customised to their needs and preferences. Such needs and preferences differ from those of Western consumers. Hence, companies need to rethink present business models and create new strategies and frameworks to effectively reach the Asian consumer.
Reshaping strategy to cater to Asian travellers
Finding effective ways of addressing the unique needs of Asian travellers has been a recurring topic of discussion at the annual TravelRave, Asia’s most influential travel and tourism festival which brings together business events within the entire travel eco-system.
Similar to the BCG Study, industry experts observed that even within the same market, expectations – particularly around service standards – can also vary for the Asian MAC traveller. While travel companies should strive to meet or exceed customers’ expectations, there is also a need to recognise that they cannot expect to cater perfectly to all of them.
President and CEO, World Travel Tourism Council and TravelRave attendee, David Scowsill asserts that more middle-class consumers will be travelling from China and India, “and for these tourists Asia is close and convenient”.
“If destinations want to attract these new consumers, they have to be dynamic,” he continues. “In the past many Asian destinations were focused on long-haul visitors from Europe, so they need to adapt to such intra-region flows of tourists.
“There are opportunities for introducing products and brands which are specifically developed for these new middle-class consumers. Clearly, many international brands have a strong presence in Asia and will continue to grow here, but local companies have the advantage in knowing the travellers’ needs and expectations best.”
There is no doubt that companies who have been successful in tapping the Asian MAC sector have redefined traditional offerings based on a clear understanding of customers’ needs.
Hotel group TAUZIA Hotel Management, based in Indonesia, noticed that as Asians become more affluent they increasingly desire products that would fulfil their ‘self-actualisation’ and ensure their personal well-being. This led to the creation of the HARRIS hotels brand, based on the concept of ‘healthy lifestyle’ and responsible living.
Having said this, travel industry experts who recently spoke at STB-organised media roundtables in Shanghai and Beijing to promote TravelRave, recognised that markets in Asia are by no means homogenous.
Assistant VP and Country Head of China at Banyan Tree Holdings Limited, Ho Ren Hua, stated that Chinese travellers are increasingly seeking authentic and customised travel experiences.
This is in direct contrast to the traditional idea of Chinese travellers only utilising large tour groups. Banyan Tree has therefore begun personalised itineraries covering in-depth travel experiences to encourage consumers to extend their length of stay.
CEO and co-founder of China travel search portal Qunar.com, CC Zhuang, concurred, adding that ensuring familiar comforts such as the provision of congee or noodles as well as Chinese culinary utensils go a long way in winning over Chinese travellers and making them feel welcome.
Even national tourism organisations (NTOs) like STB are moving towards a highly customer-centric marketing approach. For example, STB has launched a series of differentiated marketing campaigns, tailored for each market. This approach focuses on addressing consumer needs in each market, marking a departure from the global destination marketing approach that STB used to employ across all markets.
For the Indian market, STB has deepened its understanding of Indian travellers, from changes in their travel habits and needs, to the way they research and plan for leisure trips. This resulted in ‘The Holiday You Take Home with You’ campaign, launched only in India.
Executive Director of South Asia, Middle East and Africa, Singapore Tourism Board, Chang Chee Pey says deepening consumer insights in India “allows us to develop strategies that are customised to our visitors from India”.
“By understanding consumer needs, we can create and deliver better quality experiences to visitors,” he continues. “We believe that this visitor-centricity will increase the appeal and relevance of Singapore, and help build a stronger brand in the long term.”
Member of Executive Board of Kuoni Group, Zubin Karkaria, believes that both international and domestic players cannot use one format or strategy for India in its entirety.
“They need to have an umbrella strategy, which is customised for local regions,” he asserts. “Some regions the experience would take the lead, some regions it will have to be balanced by value.
“My advice to new entrants would be to adopt a phased approach. Don’t target the entire country at one go – enter markets selectively first and then expand gradually. The Indian market is in a ‘Glocalisation’ phase – keeping the international appeal with local service habits.”
TravelRave: Unlocking invaluable opportunities and insight
Attendees can look forward to more of these consumer insights at TravelRave 2013. With eight world class events covering topics that are distinctly Asian, delegates will get the chance to learn from industry experts as they share their experiences and brainstorm collectively on effective solutions to stay ahead of fast-changing consumer preferences.
At ITB Asia 2013, PhoCusWright will share their findings on the future of online travel from an Asia Pacific perspective, while speakers Renee Hartman, Co-founder of China Luxury Advisors and Dr Grace Pan, International Director, China, Hong Kong and Taiwan, Tourism and Events Queensland will present trends and challenges at the “Focus on China” segment. At Aviation Outlook Asia 2013, Hainan Airlines President Liu Lu, Air Macau Chairman Zheng Yan and Okay Airways Chairman Liu Weining will lead a panel discussion on China’s growth potential during the “Unlocking China” segment. Related topics on trends changing travel and Asia will also be explored at events like Web In Travel Conference 2013.
These are just three of the events in an exciting line up of eight quality events under the TravelRave umbrella. TravelRave will take place from 21 to 25 October 2013 providing a dynamic platform for business leaders and industry professionals to share knowledge and insights, explore business opportunities, and celebrate Asian tourism at its best.
Find out more
Get connected with the best travel minds ahead of TravelRave 2013, the most influential travel trade festival in Asia. Follow us @TravelRaveSG or visit www.travelrave.sg for the latest industry updates.
The shift to consumer-centricity in the travel and tourism industry
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