Despite inflationary pressures and other economic headwinds, the interest and appetite for luxury travel show no signs of slowing down across markets, according to industry experts at ILTM Asia Pacific 2023, which is taking place in Singapore from 19-22 June at Marina Bay Sands.

Some 500 exhibitors from over 45 countries such as Bhutan, Canada, France, Germany, Iceland, Indonesia, Japan, the Maldives, New Zealand, Qatar, Rwanda, Switzerland, and the United States convened at the annual show to present their unique offerings.

The event also attracted 500 buyers from over 25 countries, including from Australia, Brunei, Indonesia, Japan, South Korea, Kyrgyzstan, Malaysia, New Zealand, the Philippines, and Vietnam, of which 57% were new participants, highlighting the growing interest in the luxury travel market.

Over 28,000 pre-scheduled appointments were generated during the four-day show, setting the stage for fruitful business collaborations and establishing new connections within the luxury travel industry.

ILTM 2023 brought in 500 exhibitors and 500 buyers from all around the world.

Global economic resilience buoys outlook

Sumana Rajarethnam, director of Economist Intelligence Corporate Network, South-East Asia, The Economist, speaking during the opening, highlighted key factors that indicate a promising outlook for the global economy in the near term.

The global economy is showing resilience so far, with Rajarethnam noting that both Europe and the US managed to avoid recession in 2023. He also highlighted the rebound of China's consumer market, as well as the overall improvements witnessed in developed and developing economies worldwide.

Rajarethnam also noted a gradual but slow decline in inflation, due to factors such as the pricing dynamics favouring hard goods over soft goods, renewed demand from China, and the ongoing challenge faced by central banks as they navigate sticky inflation while interest rates remain high.

He also pointed to the enduring spending habits of people, particularly in the domains of tourism and services. Despite potential challenges, such as a tight labour market, consumers exhibit considerable staying power. "Revenge spending", said Rajarethnam, presents an opportunity for businesses to tap onto.

Return of the wealthy Chinese traveller

Alison Gilmore, ILTM portfolio director, delved into the intricacies of the luxury Chinese traveller's mindset, focusing on insights derived from the ILTM 2023 report.

Gilmore unveiled that experiential travel remains a top priority for Chinese travellers, with a substantial majority (63%) preferring experiences over material possessions. Quality over quantity emerged as another significant preference, with 52% favouring high-quality experiences and longer stays over frequent trips.

The report also revealed that travel advisors continue to play a vital role in the decision-making process for Chinese travellers. Gilmore emphasised that 58% of Chinese travellers plan to rely on travel advisors, while 53% depend on them to stay updated on current travel regulations.

Gilmore also highlighted shifting trends among Chinese travellers. International travel now takes precedence over domestic trips, with 82% of respondents planning international holidays compared to only 18% considering domestic destinations. Additionally, there is an increased inclination towards planning trips well in advance, with 82% of Chinese travellers adopting this approach. Sustainable and eco-friendly options have also gained prominence, with 84% intending to incorporate such choices into their travel plans.

Young, rich and influential

According to Aaron Lau, founder and CEO of Gusto Collective, the Gen Z market cannot be ignored as they are at the forefront of luxury consumerism, especially in Asia.

Aaron Lau, founder and CEO of Gusto Collective, discussing the evolving luxury travel landscape and the impact of Generation Z on the industry, highlighted the concept of "phy-gital", which is the combination of physical and digital marketing strategies to effectively target the younger generation.

The tech entrepreneur and marketing visionary indicated that there’s a huge paradigm shift in luxury consumerism, highlighting that it is no longer solely about status, ownership, and indulgence. Instead, the new definition of luxury encompasses self-expression, social capital, cultural curiosity, and artfulness.

Lau underscored the significance of Generation Z in driving luxury sales, particularly in regions where younger consumers dominate the market. Their preferences and values shape the evolving landscape, presenting opportunities for travel brands to cater to their needs and desires effectively.