The evolving dynamics of luxury segment of hospitality and leisure industry was discussed and debated at the on-going Arabian Travel Market (ATM). Analyst are of the opinion that high number of millionaires in the region has created a tiered set of expectations when it comes to all things luxury.
Given the scale of number of millionaires in the region, the expectations of individual HNWIs from across GCC play a significant part in travel decision-making process, which has led to the evolution of a tier system when booking anything from a first class airplane ticket to a private island stay.
“The luxury travel market is unique on different levels, but it works on a tier system where, for example, an individual will ask: ‘How much am I willing to pay for privacy’, but does this mean the individual is happy sharing [space] with two people or maybe more. It varies from person to person,” said Scott Booth, Associate Research Director at YouGov MENA.
The rising tide of younger millionaires coming on the scene is also changing the landscape of GCC luxury market and challenge for hospitality and leisure industry.
“According to a 2012 Credit Suisse report, number of millionaires in UAE is set to grow by 12% by 2017, reaching 48,000 individuals. GCC nationals also spend 260% more on airfares against other nationalities, with between 40-60% booking business class travel, and also spending 430% more on accommodation and 558% more on dining; so the opportunity to develop highly specialised offerings for the upper luxury bracket presents a unique challenge,” said Mark Walsh, Portfolio Director, Reed Travel Exhibitions.
Luxury tourism, both inbound and outbound, is also heavily allied with high-end retail. However, transactions are not limited to luxury goods, unique holidays and individual experiences are becoming increasingly popular.