What should we expect to see from the luxury spending patterns of the affluent in Hong Kong during this current economic climate? We have explored the popular trends of the luxury market in Asia and more specifically what the affluent in Hong Kong are planning to spend their money on in the coming year.
Quintessentially, the global private Members’ club and leaders in luxury lifestyle services forecast a rise in consumer spending in the luxury travel sector within the upcoming year. The past year has seen a significant increase in the demand for adventure and new experiences amongst the affluent in Hong Kong, and consumers are specifically aiming to satisfy their experiential needs in travel. Amrita Banta, Managing Director of Agility Research has said, “Travel is the new luxury, on average people spend 30% of their income on travel.”
The results based on the market trends in the past 6 weeks have shown that the top 3 planned future purchases by affluent Asians are travel experiences, hotel accommodation and airline tickets. More importantly, the majority of these are planning to travel more luxuriously, putting more money into upgrading to 5 star hotels and first class airline tickets. Consumers are becoming more sophisticated in their travel decisions. “Asian travellers want to go off the beaten track, they are evolving and changing the way they travel,” says Amrita Banta. We are definitely seeing a newly developed craving for experiences whilst travelling which are focused on new discoveries, seeking hidden gems and exciting adventures.
Vincent Lai, Managing Director Greater China, Quintessentially, said the experiential travel trend is also prominent within the wealthy in mainland China and will only continue to rise as this group travels more and more. Commenting on the trend he said “travellers are looking to experience extreme sports as well as activities such as viewing the Northern Lights in Europe to expand horizons and create memorable experiences they can share with family and friends.”
We are also seeing new trends evolving. For example ‘bleisure’ is becoming more and more popular. This is where travellers extend their business trip and add on a few extra days of leisure at the end. The next 12 months will also see an increase in younger travellers – they are more confident and willing to travel further. These are known as the AAA travellers – Affluent, Ambitious and Aspiring. We have also noticed a shift in focus towards health and wellness – 33% of travellers partake in events such as a marathon when travelling.
So where are people looking to travel to? Past research has shown that cities like Hong Kong, Tokyo and Singapore were three of Asia’s most popular holiday destinations over the last 12 months. Recent research has unveiled a new favourite; for the next 12 months, Hong Kong and Tokyo are still amongst top three but alongside these is a new popular destination; Osaka.
This year is no doubt a volatile year for the Hong Kong economy and we have seen a decrease in the retail industry domestically as consumers are changing the way they purchase. People still have money to spend on experiences and travel. However, with the forecasted decrease in spending in Hong Kong we see an increase in overseas spending where travellers aim to shop for luxury goods whilst they are travelling.