Travelers are hungry for high-end experiences, and there appears to be no sign of the luxury bubble bursting anytime soon, with China still expected to add weight to the post-pandemic revenge travel surge.
Luxury multi-day tour operators are surprised, and to a certain extent, overwhelmed by the continued wave of pent-up demand. Just this week, group travel for Chinese outbound travelers was approved for certain destinations from February 6.
Joss Kent, CEO of AndBeyond, said the luxury travel company, well-known for its personalized safari offerings, “can barely keep up.”
Since last February, “bookings have been 30 to 35 percent above pre-pandemic 2019 levels. We’ve just had our best first week in January in the history of the company,” Kent claimed.
“All of the growth we’ve seen in the luxury segment is without China. Australia’s only six months old. Asia’s also only just come online and the demand is surprising,” he added. Chinese tourists took 150 million trips overseas in 2019, while spending $255 billion.
Although Chinese travelers are only a small portion of the overall percentage of AndBeyond’s business, Kent said the segment is expected to “grow quite fast.”
No Leveling Out for Luxury as Yet
But this has not been the case.
Guests have been planning ahead for bigger and more rewarding trips to celebrate missed and future milestones, often including extended family, she said. The company has since seen a 12 percent increase in group sizes and a 26 percent increase in future bookings that include five or more guests, as compared to 2019.
“We are hearing from our guests that the pandemic has caused a greater shift in thinking about the value they place on travel and how they want to do it. Many feel they have lost two years and older clients are concerned about having fewer healthy years left to travel,” said Sherer.
While A&K does not specifically cater to the Chinese traveler, Sherer said they’ve been carefully watching government responses and any tightening restrictions towards Chinese travelers, as it can affect transiting passengers.
On the flip side, Sherer said the return of the Chinese traveler may positively affect regional flight patterns and passenger load, particularly in locations such as Southeast Asia.
The slow rebound of domestic and regional air routings in destinations such as Australia, and South America is also a concern. But Sherer added that A&K’s network allows for the quick rerouting of journeys and flight delays to avoid cancellations and “preserve seamless experiences” for its guests.
One of the biggest challenges the company is seeing for 2023 is space availability, especially in popular destinations, such as Egypt, East and Southern Africa, and Peru.
“To address this, we worked closely with our local experts to develop new itineraries that explore these regions in new ways,” said Sherer, including the “Africa by Private Jet” offering.
Extensive Planning for Trips Not Done at a Drop of a Hat
The list of destinations is largely reciprocal, excluding destinations that have put restrictions in place for Chinese travelers. Outbound group travel will be allowed for Thailand, Indonesia, Cambodia, Maldives, Sri Lanka, Philippines, Malaysia, Singapore, Laos, UAE, Egypt, Kenya, South Africa, Russia, Switzerland, Hungary, New Zealand, Fiji, Cuba, and Argentina, according to an announcement made by Dragon Trail International.
It is also likely part of a phased approach to reopening of the country’s borders by the state tat strictly monitored the movements of its citizens even pre-Covid, as group travel was only authorized through endorsed agents.
This is according to Johan Groenewald of Royal African Discoveries, who specializes in personalized luxury tours tailored for the high-end Chinese Traveler. He said while the lifting of the ban is good for the broader Chinese travel market, it will not significantly impact the luxury foreign independent traveler, who often has more onerous visa requirements to meet when booking overseas trips.
Groenewald said he is not expecting an immediate increase from this high-end segment that spends anything upwards of $58,000 for a seven-night package.
“These trips are not done at a drop of a hat and compiled within a few days. China travelers are currently focused on travel for the Lunar New Year and most high-end travellers will only start looking at long-haul destinations that need careful planning after their Lunar New Year holidays,” he said.
When it comes to the well-travelled, high-end Chinese traveller, their preferences and tastes have evolved. They remain time-strapped as Chinese holiday periods are concentrated over specific periods such as Golden Week during October.
Irrespective they crave high-end experiences, despite gravitating towards a jam-packed itinerary. Add to that, young, new-wealth Chinese travelers are more flexible, especially when it comes to needing a qualified, Mandarin-speaking guide, unless they’re booking a multi-generational holiday, he said.
Kent, believes operators who tailored their product too much to the Chinese market and dropped their rates to match Chinese trade demands are unlikely to net any of the upcoming luxury surge from the Chinese outbound market.
AndBeyond purposefully does not tailor anything specifically to the Chinese market, he said.
“We believe there is a sophisticated luxury traveller segment in China who have travelled a great deal and who like our services, food and hospitality as it is served to all of our other very important geographic source markets.
“We are not chasing it.
“Over time those guests will ‘find’ us and enjoy our kind of lodge and field experiences because that is what they are seeking and they are interested in our Impact Mission and story,” said Kent.
Impact Journeys run by AndBeyond to destinations like Pinda or Patagonia, underpin the transformative, sustainable experience Kent believes his company has become known for across all its source markets. The company is also set to launch its first lodge in Asia, with &Beyond Punakha River Lodge scheduled to open in the Himalayan kingdom of Bhutan in September.
If there is any bubble to burst, he believes it is in the budget multi-day tours area, as opposed to the high-end, with companies who have yet to distinguish exactly what they stand for in terms of pricing or service mostly at risk.