APAC High-End Hotel Selection Journey

Delivered July 23rd, 2019. Contributors: Sagar, Nehil, Abhishek and

Research Outline: APAC High-End Hotel Selection Journey

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APAC Traveler Customer Journey

For luxury travelers in the Asia Pacific (APAC) region, travel portals are more popular for hotel and accommodation booking because of the various choices available for comparison and the ease of booking.
APAC TRAVELER CUSTOMER JOURNEYHOTEL SELECTION PROCESS FOR LUXURY TRAVELERS IN THE ASIA PACIFIC REGION 
Travel portals are more popular for hotel and/or accommodation booking because of the various choices available for comparison and the ease of booking.
The most popular information channels for travel are online search and brand websites. 
 Online and social media advertisements are the top 2 influencers when choosing a travel brand.
 1 in every 4 trips Chinese millionaires take mixes leisure and business.
Cruises are more often booked through traditional travel agents and travel concierge services.
HOTEL SELECTION CRITERIA FOR LUXURY TRAVELERS IN THE ASIA PACIFIC REGION 
 70% of luxury travelers expect highly customized experiences in purchasing luxury products or services.
APAC luxury travelers expect luxury brands to offer thoughtful and intelligent services and solutions 
Asian millionaire travelers expect customization as per their needs.
 Shangri-La Hotels & Resorts is the most beloved brand in the Hotels category for Asian Millionaires, followed by Hyatt and JW Marriott.
With the launch of Airbnb Plus, Airbnb is increasingly seen as an alternative to luxury hotels.
Chinese luxury travelers seek sustainability, wellness, and family experience.
 Ritz-Carlton is the most popular luxury hotel brand for Chinese luxury travelers.
ADDITIONAL FINDINGS
Over 40% of APAC travelers say they bounce back and forth between dreaming about and planning their next trip. 
According to Christine Warner, Head of travel at Facebook, on average, 43 days will pass between the decision to travel and the decision on where to go.
Research conducted by Nielsen for Google found that travelers spent an average of 53 days visiting 28 different websites to plan their vacations.
Around 24% of the United States' travelers to the APAC region plan for their travel over 90 days in advance.
Approximately 18% of travels from the United States to APAC locations are already arranged 0 to 7 days prior to the trip.
Around 25% of travelers within the Asian region book their travel arrangements 0 to 7 days before the actual trip.
 20% of all the reservations made by the Asians traveling within the APAC region is done 90 days in advance.
RESEARCH STRATEGYFor this research, our research team employed four research strategies as follows.

First, we started our research by directly searching for industry reports and market studies on luxury travelers in the Asia Pacific region. The reports would include information on the customer journey that includes the following details: 
Any differences between leisure and business travelers
Hotel selection process (how they find and/or learn about hotels)
Selection criteria
Booking touchpoints (e.g. when and how bookings are typically made) 
Booking time-frames
The research team came across numerous reports published on luxury, affluent or millionaire travelers in the Asia Pacific region that provided information on the hotel selection process and selection criteria. These reports came from different sources including but not limited to ILTM Asia Pacific, Agility Research, and Luxury Society among others. However, limited information could be found on differences between leisure and business travelers, booking touchpoints, and booking time-frames specific to luxury travelers in the Asia Pacific region.


Since limited regional information could be found on some data points, we started to search for any country-level information about the top luxury travel countries identified in our previous search namely, China, Japan, Malaysia, and Singapore among others. The idea here was to find information such as differences between leisure and business travelers, booking touchpoints, and booking time-frames specific to luxury travelers in each of these countries. However, after checking through numerous available reports published by Luxury Conversation and CPP Luxury, limited information could be found on the missing data points. Most information through reports such as the one by Luxury Conversation are behind paywalls and limited insights are made publicly available by the publisher.

Our third strategy involved searching for any statistics or hard data published by hotel booking portals and travel planning websites. The idea here was to find any information on how luxury travelers make use of such sites to travel within the Asia Pacific region. However, most of the information found through this strategy provided worldwide information for all the customers. For instance, the report published by TripAdvisor provides statistics on its overall user base and nothing specific to luxury travelers in the Asia Pacific region.

As a last resort, our fourth strategy involved searching for information on global luxury travelers. The idea here was to find any useful information on the missing data points for the Asia Pacific region. We came across an article published by Luxe Digital that provides information on the booking touchpoints and time-frames for luxury travelers globally.

Further, we also searched for information on all the travelers to the Asia Pacific region and came across an article that provides information on the booking time-frames for all the travelers in the Asia Pacific region.

After exhausting the above-mentioned strategies, our research team concluded that limited information is available on the typical customer journey for luxury travelers in the Asia Pacific region.

WHAT INFORMATION WAS AVAILABLE
Information on the hotel selection process and criteria for luxury travelers in the Asia Pacific region
Information on global luxury travelers
Information on all travelers in the Asia Pacific region

WHAT INFORMATION WAS NOT AVAILABLE
Booking information specific to luxury travelers in the Asia Pacific region
Any information on differences between leisure and business travelers

WHY INFORMATION WHICH WAS NOT AVAILABLE PRE-COMPILED, COULDN'T BE TRIANGULATED?
One of the probable reasons for the unavailability of part of the information needed could be that since hotel booking and travel planning companies publish overall consumer behavior data, no information specific to luxury travelers in the Asia Pacific region is publicly available.
It could also be possible that the customer journey in terms of booking touchpoints and time-frames for luxury travelers is similar to all the travelers.
Since we were only able to provide limited information on the typical customer journey for luxury travelers in the Asia Pacific region, we have submitted this as a partial client update. The details have been summarized in the findings section.

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High-End Hotel Market Segmentation: APAC

Even after extensive research, we were unable to provide hard data and statistics to illustrate the various segments of the high-end or luxury hotel market. We were able to find some information on the user segmentation and market segmentation of the high-end hotel market in the Asia-Pacific region. The helpful findings of the research have been presented below, along with an outline of the research strategy.
HELPFUL FINDINGS:USER SEGMENTATION OF HIGH-END HOTEL MARKET: APAC
According to an analysis performed by Wealth Insight, the population of female ultra-high-net-worth individuals (UHNWI) in the studied countries grew at a review-period CAGR of 5.3% as opposed to a CAGR of 4.4% for male UHNWI.
The demand for family holidays is driven by married UHNWIs with small and mid-sized families. 
The UHNWIs aged more than 50 years are more inclined towards luxury tourism. They accounted for over 62% in the Asia-Pacific region.
According to the State of the Hotel Industry 2018 report, the highest number of travel bookings were done on Tuesdays, with 64% of the travel searches done through desktop and 36% through mobile phones. According to the same report, a guest prefers looking at the websites of luxury hotels before booking one. 
MARKET SEGMENTATION OF HIGH-END HOTEL MARKET: APAC
The market segmentation by type covers business hotels, suite hotels, and resorts. Similarly, the segmentation by applications can be divided into rooms, food & beverage, SPA, and others.
Luxury hotels were the fastest-growing segment in the Asia-Pacific hotel market during the review period (2013-2017) with a CAGR of 6.8%. 
The luxury hotel chains in Australia account for 19.8% of the hotel market in that region with 128 hotels. Similarly, the luxury hotel chains in Hong Kong account for 18.9% of the hotel market in that region with 24 hotels. 
The luxury hotel chains in India account for 37% of the hotel market in that region with 267 hotels. Similarly, the luxury hotel chains in Indonesia account for 13.2% of the hotel market in that region with 129 hotels. 
The luxury hotel chains in Japan account for 1.4% of the hotel market in that region with 52 hotels. Similarly, the luxury hotel chains in Malaysia account for 20.1% of the hotel market in that region with 56 hotels. 
The luxury hotel chains in New Zealand account for 12.7% of the hotel market in that region with 20 hotels. Similarly, the luxury hotel chains in the Philippines account for 25.2% of the hotel market in that region with 28 hotels. 
The luxury hotel chains in Singapore account for 35.7% of the hotel market in that region with 49 hotels. Similarly, the luxury hotel chains in Thailand account for 26.4% of the hotel market in that region with 186 hotels. 
An article on SCMP reported, “Hyatt Hotels, one of the world’s largest luxury hospitality companies, plans to double its capacity in regions that include China within the next four years, according to the head of the company’s Asia-Pacific operations.” Hyatt Hotels has a pipeline of 27,000 rooms that represents nearly a third of the global development pipeline.
Marriott International also has expansion plans in the Asia-Pacific region. Their target is to have 1000 hotels in the Asia-Pacific region by the end of 2020. 
Marriott also plans to open three more luxury hotels in the Asia-Pacific region this year. They have already opened five hotels in the Asia-Pacific region in 2019.
RESEARCH STRATEGYYOUR RESEARCH TEAM APPLIED THE FOLLOWING RESEARCH STRATEGIES:We started the research by searching across industry reports on databases such as Market Watch, Reuters, Business Wire, and more. Industry reports usually contain information on market segmentation along with the information on the geographies, market size, key players, and more. We found some reports that contained information related to the segmentation of the market by geographies (APAC region). However, the information was locked behind a paywall. We were also able to find some information on the market segmentation by type and application. However, the report only provided information on what the segments covered. Thereafter, we searched across multiple media publications and press releases on databases such as SCMO, Hotel News Now, and more. We found some information that highlighted the expansion plans of the luxury hotels in the APAC region. However, we did not find information on the market and user segmentation in the region. We also searched across some statistical databases like Statista. From there, we were able to find information on the cost of luxury hotel rooms in the APAC region. Still, we did not find any relevant information on the topic.

Thereafter, we tried to triangulate the required information by looking into each luxury hotel in the region and their respective customer profiles. Our main goal here was to identify a pattern of the users. There was no information related to the customer profiles on the websites of the companies, news databases, press releases, and blogs. We were only able to identify the expansion plans of these luxury hotels. Then, we tried to find the required information from industry conferences or blogs that generally promote customer trends. Though the information on databases such as HFTP Annual Convention and Fastbooking highlighted the trends, travel habits, behaviors, and influencers in the industry, we were unable to identify the same information for the luxury hotels in the APAC region. The available information was very generic and only covered the Chinese, Japanese, and Australian markets. We also tried to identify some alternate data points to triangulate the required information. We looked through the user and market segmentation on a global scale. We then looked for information on the market share that APAC holds in the global market on sources such as Market Watch, Research and Markets, and more. The information that we obtained using this strategy was either behind a paywall or not related to the specific region.

Lastly, we tried to find the required information from dated sources on databases such as Research Gate, Expedia, and more. We tried to see if these databases have presented any information regarding the market or user segmentation in the APAC region that could be used to triangulate the present statistics. However, this strategy also proved to be futile. We were able to find information on the demographics and market segmentation in the region. However, the information did not highlight the luxury hotel segment. We assumed that the data is unavailable because the focus of the reports on this topic is on the expansion of luxury hotels and the trends in the market. This may also be due to the confidential nature of the guests' profiles and the lack of studies conducted on the topic. Therefore, we have presented some helpful findings above.

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High-End Hotel Market Demographics: APAC

During our research we were unable to determine the demographics of the typical customer of high-end / luxury hotels in Asia-Pacific. However, we were able to provide useful findings regarding customers of specific luxury hotels in the Asia-Pacific region, their preferences, and the hotel industry in the Asia-Pacific region. Below is an overview of our findings.
USEFUL FINDINGS: 
According to the State of the Hotel Industry in Asia Pacific report, high end customers prefer to look at the websites of luxury hotels before booking them. 
According to the Customers Satisfaction and Customer Loyalty study of Sule Shangri-La, Yangon there were about 60.2% male and 39.8% female customers. 
About 15.2% customers of Sule Shangri-La, Yangon were under the age of 30 years, 19.3% in age group of 31-40 years, 19.15% in the age group of 41 – 50 years and remaining 47.4% were 51 years and over. 
According to the Customers Satisfaction and Customer Loyalty study of Sule Shangri-La, 13.5% of customers were from ASEAN region, 31.0% Scandinavian and 28.1% German. 
According to the Chinese High-End Tourism report, about 30.8% of luxury travel decision makers fall in the age group of 36-45 years, followed by 23.9% in the age group of 30-35 years. 
About 53.2% of Chinese luxury travel decision makers are female while male make 45.1% 
India, Japan, Thailand, Singapore, Vietnam, Australia, New Zealand are some main markets of luxury hotels in Asia Pacific region. 
The total number of Hotel establishments in Asia Pacific region amounted to 63,616 in 2017 and may grow at CAGR of 5.01% to reach 81,234 by 2022. 

Research Strategy:In order to try to find the demographics of the typical customer of high-end / luxury hotels in Asia — Pacific, we first tried to look for industry reports and research reports on the Luxury Hotel industry in Asia Pacific. We looked for information on sites like researchandmarkets, IBISWorld, and marketsandmarkets, among others. This strategy did not work, as there was no information found on the demographics of luxury hotel customers in Asia Pacific. The reports contained information on the market size, and growth of the hotel industry in Asia Pacific. We had thought that this strategy may work as market research sites publish information on various topics and may have published information of the demographics of customers of high-end hotels in Asia — Pacific region.

Next, we tried to look for information on hotel industry associations sites such as Hospitality Net, HSMAIASIA, and hotelasiapacific, among others. With this strategy we were able to find the report on the Hotels Chains in Asia Pacific, number of hotel brands in some countries of Asia Pacific region, and growth, but there were no information on the demographics of customers of luxury hotels in Asia Pacific region. We had thought that this strategy may work as these sites publish reports, articles on the hotel industry and may have published information on the demographics of customers.

After that, we tried to look for information on demographics of customers of some luxury hotels in Asia Pacific region. We looked for information for luxury hotel chains like Shangri La, Taj Hotels, Marriott, Radisson, and Hyatt. This strategy worked to an extent, as we found the report for Shangri la Hotel which provided information on the Customers Satisfaction and Customer Loyalty study of Sule Shangri-La, Yangon. It provided information on age and gender demographics, but there was no information on other demographics of customers. Our aim behind this strategy was to look for information on the demographics of some luxury hotel chains in the Asia Pacific region and provide the information as proxy for the Asia Pacific region.

Next, we tried to look for academic research papers that may have been possibly published on these topics on sites like Academia and Research Gate. However, this strategy did not provide the required information. We had looked into these sites as they tend to provide various studies that also include surveys of a sample population with questions, which are answered by them. Hence, we thought that such research papers could be used if any research about demographics of customers of luxury hotels in Asia — Pacific region or similar papers are available. Instead, we found information about customer satisfaction towards some hotels and trends in Hotel industry in Asia Pacific.4

Lastly, we tried to expand the scope of the research to look for information about the demographics of high-end/luxury travelers to the APAC region. I looked for information on sites like dragontrail, travelweekly, ehotelier among others. This strategy worked to an extent as we were able to find information about age and gender of Chinese luxury travelers, but there was no information on other demographics. Also, this information was only specific to the Chinese region. Our aim behind this strategy was to find the demographics of luxury travelers to the APAC region and present these demographics as the demographics of the customer of high-end / luxury hotels in Asia — Pacific assuming that the majority of luxury travelers would be the ones staying in the high-end hotels.

In addition, this information could not be triangulated because there were no industry reports or articles that provided information on the demographics of the typical customer of high-end / luxury hotels in Asia Pacific. The reason for non-availability of information could be due to the confidential nature of the guests profile and no study being conducted in the segment that highlights their demographics like age, sex, income level, race, employment, location, home ownership, children, and level of education to the high-end hotel market breakout in the Asia — Pacific region. 

Did this report spark your curiosity?

Sources

From Part 01

ASIA PACIFIC MILLIONAIRE TRAVELLER

view.iltm.com

Publication Year: 2018

Quotes

"The most popular information channels for travel are online search and brand websites. The brand website, often overlooked in terms of budget allocation vs social media, remains an essential tool to showcase and promote a brand."
"Online and social media advertisements are the top 2 influencers when choosing a travel brand. Nevertheless, offline channels are still relevant, with between 35% and 41% of respondents indicating that they are still influenced most by physical interaction with the brands or through traditional media exposure."
"On average, one in every four trips Chinese millionaires take mixes leisure and business. “Bleasure” poses peculiar challenges to luxury travel brands: they must learn to look at their guests’ trips holistically, so they can provide different experiences during the same trip depending on the stage the guest is at."
"Japan is the most sought after country to travel to by Asian millionaires, due to the low Yen, variety of destinations, authentic culture and attention to the environment."
"Overall, most of the travel purchases made in this region are completed online, particularly through a local website / app."
"This is, however, not true for cruises, which are more likely to be booked through traditional travel agents and travel concierge services, especially in markets like Hong Kong and Japan."

FEATURED CPPLuxury: Understanding the profile of Asian millionaire travellers | Agility Research

agility-research.com

Publication Year: 2018

Quotes

"On average, 70% of the respondents indicated that they expect highly customized experiences in purchasing luxury products or services."
"Luxury travelers expect luxury brands to offer thoughtful and intelligent services and solutions. They want their needs to be fulfilled before they even anticipate it,” explained Amrita."
"Thai, Malaysian, and Chinese millionaires travel to selected destinations to shop and explore, while Singaporean, Hong Kong, and Japanese travelers travel to take advantage of lower prices. "

The Asian Millionaire Traveller in 2018

luxurysociety.com

Publication Year: 2018

Quotes

"Our research strongly shows that no matter what type of experience is considered, all must have one common trait: customization by understanding and anticipating the millionaire's needs. "
"Shopping, sightseeing and dining are the most popular leisure travel activities for travellers from countries across Asia Pacific. "
"Japan is the most sought after country to travel to by Asian millionaires, due to the weak Yen, variety of destinations, authentic culture, cuisine and nature/environment."
"Shangri-La Hotels & Resorts, offering a unique style of luxury Asian hospitality and remains the most beloved brand in the Hotels category for Asian Millionaires, followed by Hyatt and JW Marriott."
"With the launch of AirBnB Plus, which only includes selected and vetted premium accommodations, AirBnB is increasingly seen as an alternative to luxury hotels."

State of the Hotel Industry in Asia Pacific

fastbooking.com

Publication Year: 2017

Quotes

"When it comes to timing trends, 24% of US to APAC travellers search 90+ days out."
"On the other end of the lead time spectrum, last-minute trips to APAC are still popular: 18% of trips from the US to APAC are booked 0 to 7 days in advance of travel."
"What’s more, about a quarter of all inter-regional travellers book their trips last-minute, 7 or fewer days before travel. "
"Early bookers planning trips 90 or more days out make up 20% of all bookings and 26% of all searches."

China Insight Report: Next-Gen Luxury Travellers – Affluent Chinese Families

luxuryconversation.com

Publication Year: 2018

Quotes

"Sustainability and wellness – green is the new gold for luxury Chinese travellers"
"Their child’s experience – family life is the new luxury for affluent Chinese travellers and they expect the world"
"Destination plans – Chinese affluent families pioneer extreme getaways and have adventurous new locations on the mind"

The Chinese luxury traveler – 2018 trends by Hurun Report

cpp-luxury.com

Publication Year: 2018

Quotes

"Travel agency selection: over half of high-end travelers opt for personalised service as the key consideration when a selecting a travel agency, with half choosing a well-planned itinerary."
"Hotel/Accommodation: Ritz-Carlton is the most popular luxury hotel brand once again. With regards to hotel membership, the Hyatt scheme is the most popular, being preferred by 26% of high-end travelers, up from a mere 3% last year."

Luxury Marketing To The Affluent Traveller: 4 Critical Online Moments

luxe.digital

Publication Year: 2018

Quotes

"Over 40% of travellers say they bounce back and forth between dreaming about and planning their next trip—zooming in on the details for one destination and then zooming out to reconsider all the options again"
"On average 43 days will pass between the decision to travel and the decision on where to go, according to Head of travel at Facebook, Christine Warner. These 43 days will be spent scrolling through social media feeds and reading recommendations from friends and trusted influencers. "
"Research conducted by Nielsen for Google found that travellers spent an average of 53 days visiting 28 different websites to plan their vacations.[4] More than 50 percent of them will heavily use social media during that travel planning phase."

Worldwide Findings

cf.cdn.unwto.org

Publication Year: 2017

Quotes

"80% of buyers who visit TripAdvisor during the purchase process worldwide take longer than 4 weeks to complete their purchase"
"Travel transactors who use TripAdvisor engage with more sites. Their path to purchase research is 29% longer than non TripAdvisor users"

From Part 02

Luxury Hotels Market 2018 Global Trend, Segmentation And Opportunities Forecast To 2023

marketwatch.com

Publication Year: 2018

Quotes

"Luxury Hotel market will register a 4.5% CAGR in terms of revenue; the global market size will reach US$ 222900 million by 2024, from US$ 171100 million in 2019. In particular, this report presents the global revenue market share of key companies in Luxury Hotel business."

Global Luxury Hotel Market Analysis 2019 by Size, Share, Trends, Segmentation and Vendors, Industry Overview, Demand, Customer Behavior and Forecast 2024 - Reuters

reuters.com

Publication Year: 2019

Quotes

"Luxury Hotel market will register a 4.5% CAGR in terms of revenue; the global market size will reach US$ 222900 million by 2024, from US$ 171100 million in 2019. In particular, this report presents the global revenue market share of key companies in Luxury Hotel business."

APAC Hotel Market Analytics, 2013-2022 - Number of Establishments Expected to Reach 81,234 by 2022

globenewswire.com

Publication Year: 2019

Quotes

"In Asia Pacific hotel market, the total number of establishments increased at a CAGR of 4.83% during the period 2013-2017 accounting for 63,616 establishments in 2017. By 2022, the number of establishments are expected to reach 81,234 with a CAGR of 5.01%. During the review period 2013-2017, Luxury hotels are the fastest growing segment with a CAGR of 6.80% while Midscale hotels are the slowest growing segment with a CAGR of 4.23%."

Asia Pacific Hotels & Chains Report 2018

hospitalitynet.org

Publication Year: 2018

Asia-Pacific Hotels Market Analytics to 2022: Rooms and Revenue Analytics

researchandmarkets.com

Publication Year: 2018

Quotes

"Luxury hotels are the fastest growing segment with a CAGR of 6.80%"

Hyatt Hotels lays out plan to double its Asia-Pacific presence

scmp.com

Publication Year: 2019

Quotes

"Hyatt Hotels, one of the world’s largest luxury hospitality companies, plans to double its capacity in regions that include China within the next four years, according to the head of the company’s Asia-Pacific operations."

Marriott International Announces 40by2020 Vision In Asia-Pacific - Marriott News Center

news.marriott.com

Publication Year: 2019

Quotes

"Company targets 1,000 properties open by end 2020, a nearly 40 percent increase, and expects to add an estimated 40 percent more job opportunities in the region"

Marriott plans to open eight more new luxury hotels in Asia-Pacific this year – Business Traveller

businesstraveller.com

Publication Year: 2019

Quotes

"Marriott plans to open eight more new luxury hotels in Asia-Pacific this year"

Market Snapshot: Asia Pacific 2018

hvs.com

Publication Year: 2018

Quotes

"Over the period from 4Q2017 to 3Q2018, South Korea leads in number of hotel transactions with 65 transacted properties, 45 more than the previous four quarters. The increase comes despite weakening hotel market performance, indicating that investors’ sentiment in the market remains optimistic. "

Opportunities In Luxury Tourism: Trends In UHNWI Demographics And Leisure Interests

airlineconsolidator.com

Publication Year: 2019

Quotes

"Luxury tourism has become a fast-growing industry, as an increasing number of UHNWIs are spending wealth on vacations. In the US alone, the wealthiest 5% spend US$3,115 per person per vacation, totalling more than US$390 billion a year, according to the 2018 US Luxury Travel Report by international travel and tourism consultancy Resonance."