Alta Thoughts (August 2024)
By Rakesh Patel
It was a pleasure to share a panel on sustainable tourism with Liz Ortiguera from the WTTC (World Travel & Tourism Council) and K. Oanh Ha from Bloomberg, at the Sustainable Business Summit in Singapore.
Some takeaways:
- Adoption of sustainable tourism practises is lagging in Asia, particularly versus the EU, where regulation is tightening and unified across the region
- This is exacerbated by the challenge for countries trying to balance economic recovery post-pandemic with sustainable tourism development
- Progress in Asia can be made with a “carrot and stick” approach. More governmental incentives/tax breaks (there is a cost), alongside tighter regulation
- Banks and green financing should be additive in the process by offering a discernible green borrowing advantage, especially to SMEs
- A trigger for change can come from a shift in consumer behaviour towards green accommodation, especially amongst emerging travellers
Here are a few of our recent thoughts posted on LinkedIn. Always good to hear your feedback. You can follow us directly on LinkedIn and go to our website.
A Decade of Wellness Tourism: First-Ever Compilation of 10+ Years of Market Data
The 10 year data on wellness tourism from the Global Wellness Institute (GWI) is insightful.
In the period 2012-2019, wellness trips and expenditure grew annually 7.3% and 8.6% respectively, about 25% faster than overall tourism. Looking forward, growth from 2023-2027 is forecast at around 15-16% CAGR.
Superior growth rates will lead to wellness tourism market share of overall tourism to rise from 5.8% in 2012 to 8.3% in 2027. Lastly, wellness tourism remains high-yield tourism, with an average of 41% higher spend for an international tourist per trip versus a typical trip.
Family offices lead APAC hotel investment surge
Appropriately bullish reports from two of the large property companies on the state of the Asian real estate sector.
JLL reports a 19% yoy surge in hotel investment in the 1H 2024, led by family offices, who are less reliant on debt financing. Of particular investment interest are lifestyle/boutique/wellness assets.
And for the 2H 2024, Knight Frank forecasts a 33% yoy increase in cross-border investment volumes. This is based on a typical 30 month normalisation cycle in real estate, and we currently in the 24th month.
Guest desire for experiences
There is a relentless desire for experiences, according to the latest data reported by McKinsey. Since 1960, demand by US consumers for experiences has risen by 60%, whilst demand for goods has dropped by 40%.
Tapping into this trend, the hotelier mindset is now more focussed on the guest experience, rather than just the guest product.
Luxury hotels lead here with their culture of excellence – though this comes at a price. Beyond this, hotels across all segments can deliver cost-efficient guest experiences, whether it be social lobbies, localised offerings, or co-working spaces.
