Alta Thoughts (May 2023)
By Rakesh Patel
It was a pleasure to discuss Sustainable Investing in Real Estate with Calvin Lee Kwan and Krystal Chia at the Bloomberg Wealth Summit in Hong Kong. Some key takeaways from our panel and other speakers at the event:
- Developing and managing RE assets sustainably is return enhancing. Strong growth trends in wellness provides investment opportunities.
- There is a large scale generational transfer of wealth occurring. The challenge is how to cater for the next generation of wealthy investors. Their values, interests and goals are different.
- The wealth hub rivalry between HK and Singapore maybe a mute point, as the wealth creation and shift to Asia provides ample opportunities for both cities.
- The HKMA sees no US/Europe banking turmoil contagion into HK/Asia. Recent efforts on tax, residency and regulations, to make HK a more attractive wealth destination.
Panel video link here.
Will business travel ever return to normal and is there a new normal? Business travel is recovering, but it is still less than 50% of 2019 levels, and has significantly lagged leisure travel. The Global Business Travel Association forecasts that business travel spending may not fully recover until 2026.
Several factors are driving this. The latest Deloitte survey of corporate managers, shows that higher air fares are a major factor forcing business travellers to be more selective with how often they travel. Increasing environmental concerns are also driving more purposeful travel, so longer and less frequent trips. Lastly, the technological leap forward during Covid, allowing more remote working, which is now becoming a permanent behavioural shift.
Whilst business travel patterns have likely changed for good, there is still no substitute to the value of face-to-face meetings and relationship building – the direction of travel though, seems to be less of it.
Now that millennials are turning middle-aged – how are they changing travel? Particularly as they out-travel the previous baby-boomers, regard travel as a right not a privilege, and consider travel experiences as part of their identity.
Millennials are spending on travel, but not splurging, so only 20% are looking for top-of-the-line options, whether that be hotels or flights. They are also more likely to spend on travel experiences, rather than consumer goods, according to an AMEX survey, with 61% prioritising trips that focus on personal wellness. Also, a substantial number (82%), say they want to travel with minimal impact on the environment.
Hotel groups are beginning to react to the trends, with more affordable brands that appeal to millennial travelers. The key here is authenticity in the brand offering – millennials are tech-savvy, and through social media, can now quite easily authenticate the credentials of a hotel product offering.
It’s a controversial topic, but one that deserves air time. As parents, there is a constant battle over whether social media is good or bad for our children. Of course, few things in life are this binary. A survey of 42,000 Gen Z’s conducted by McKinsey, demonstrates the negative mental impact of the overuse of social media, but also highlights some of the benefits.
On the one hand, 32% of Gen Z’s, report negative impacts from social media in matters like FOMO, body image, and self-confidence. Yet there are signs that social media can also be supportive, with easy access to digital mental wellness apps, a medium for self-expression, and a tool to stay connected and decrease loneliness.
Harnessing, rather than limiting, the power of social media in dealing with mental health, maybe the progressive way forward. At the other end of the spectrum from technology, and it’s a big ask for young people, at some point in their lives they may discover and practise meditation, an ancient support for mental health.