The Emerging Luxury Markets
By Edward Donaldson VP Marketing, Small Luxury Hotels of the World | May 05, 2009
The outlook for the coming years show countries such as India, Brazil, China & Russia having the largest impact on the consumer market. China is the largest population in the world and recent statistics indicate that 1 out of every 6 people on earth are living in China. This will have a drastic effect on the travel industry and the luxury market. Analysts also forecast that China will be the world's most important luxury market by 2011. As more products become available to more people, the pressure increases to offer something truly special.
For the luxury boutique sector, there is a positive outlook to be able to grow equally as well within these markets. Within the last few years, countries such as Vietnam, Cambodia and Laos have entered the boutique sector with exceptional offerings and equally eager travelers anxious to explore the spectacular offerings of such exotic destinations.
Equally, the luxury boutique sector has seen a shift in both luxury inventory and demand in markets that just a few short years ago were not on the radar. Former Soviet Block countries such as Poland, Czech Republic, Estonia, Russia and Hungary are enjoying new records of arrivals of luxury hotel guests. In brands such as Small Luxury Hotels of the World as an example, Poland has seen over a 1000% increase in arrivals of guests in the first six months of 2005 over 2004 with limited addition to inventory. As these countries continue to grow and flourish with the inbound tourist dollars and new potential markets to attract guests, the luxury boutique sector, along with the entire luxury goods market, will continue to strengthen and enjoy growth at historical levels.
At the same time that these markets experience growth in both variety of product and the inbound traveler, a new economic market will be created which will in turn create new travelers. Nowhere is this more evident than in China where the recent growth of both the inbound market to mainland China and the demand for outbound travel has been equally as strong. According to statistics, a total of 28.5m tourists will fly out of China this year, a figure that is expected to rise further following the Chinese government's decision to increase to 90 the number of worldwide destinations granted approved status. By 2007, China is expected to replace the US as the world's biggest outbound tourist market.
With new markets opening and the unlimited potential abounding, the challenge on the hotel industry and most importantly the luxury boutique sector, is to keep pace with the bourgeoning opportunities offered. If even a great portion of the statistical information comes to fruition, the hotel industry will need to adapt and change many of the current strategies in order to remain successful.
The World Tourism Organization's Tourism 2020 Vision forecasts that international arrivals are expected to reach over 1.56 billion by the year 2020. Of these worldwide arrivals in 2020, 1.2 billion will be intraregional and 0.4 billion will be long-haul travelers. The total tourist arrivals by region shows that by 2020 the top three receiving regions will be Europe (717 million tourists), East Asia and the Pacific (397 million) and the Americas (282 million), followed by Africa, the Middle East and South Asia.