IHG predicts massive global travel spend by Asians

A new report by IHG,  in collaboration with The Futures Company, predicts Asian travellers will account for one third of the world’s travel spend by 2020.

It also identifies the trends set to shape the next 10 years of travel as well as the new categories of traveller that are emerging. 

Bringing together recent research compiled by The Futures Company and insight from IHG: The new kinship economy: from travel experiences to travel relationships report identifies groups including ‘new global explorers’ - travellers from high-growth countries such as China, Egypt, Turkey and Africa. They follow well-trodden paths, wanting to visit all the must-see sights and are high-spenders.

The report also cites the likely increase in city breaks to as yet ‘unknown’ cities that few people have heard of, or cities that haven’t even been built. Some 400 largely unknown midsize cities in emerging markets – predominantly China and India – will generate 40% of global economic growth over the next decade and beyond.

“This report shows how the world of travel is constantly evolving and identifies the trends that are set to influence the industry over the next ten years," said IHG CEO Richard Solomons.

“IHG is well placed in the world’s developing markets. As new destinations and groups of traveller emerge we will ensure we are meeting the changing needs of those at the heart of our business – our guests.”

IHG chief executive Asia, Middle East and Africa Jan Smits added:"The Middle East gives us great scope to expand the IHG footprint across our brands. The region understands luxury well and this is reflected in our portfolio mix, where one third of our hotels are InterContinental hotels.

“We are confident of our long-term growth with the addition of 26 hotels (6630 rooms) that are in our development pipeline. This represents a 40% growth and points to the headroom we’re still seeing in this market. We’ve been in the Middle East for over 50 years and we intend to continue growing our brands and people in this region well into the future.”

Half of the hotels IHG plans to develop in the future now come from emerging markets such as Greater China. IHG has more than 50,000 rooms under development in this region – more than any competitor, the group said in a statement.

IHG is seeing some of its strongest growth in secondary and tertiary cities that are not yet on the hot lists of the world’s travelling population such as Chengdu, Hainan, Xian and Nanjing in China, and Bangalore, Chennai and Hyderabad in India.

In the Middle East, IHG’s hotel development pipeline includes city locations like Jeddah and Riyadh in Saudi Arabia, Ras Al Khaimah in the United Arab Emirates, Kuwait, and Bahrain, among others.

Other emerging categories of travellers identified in the report included:

Evolving families, who represent the changing shape of the family traveller today. At one end of the spectrum the industry is seeing multi-generational families taking over whole floors in hotels whereas at the other end of the scale, the growth of the single person household is driving the need for stimulating independent travel.

Laptop and latte workers, a new breed of business traveller. Often young, the typical 9-5 working environment and business centre atmosphere is alien to them.. They prefer creative coffeehouse-style environments where they can be inspired by meeting other travellers while they work on their own laptops and smart phones

And, Expansive mid-lifers, the growing numbers of adventurous over 50s travellers – currently and for the first time the fastest growing and most affluent age group. These travellers seek new experiences yet demand services that respect their needs without labelling them as old.

The report also highlights the challenge for the travel industry of paradoxically balancing an increased guest preference for independence on the one hand with a desire for hyper-personalisation for other guests, including:

The Invisible Traveller, a new phenomenon highlighted in the report, describes a guest who could potentially travel without touching the sides, and may never interact with hotel staff. From planning to booking, check-in at the airport to check-in at the hotel, room service and even concierge services, some travellers are already opting for an entirely independent, human-free travel experience.

Conversely, Predictive Service describes the response to meeting the need for personalised and customised service. From service staff who can speak multiple languages through to chefs who can provide vegan meals at short notice, the industry will need to keep evolving the ways they create customer loyalty, in order to build long lasting relationships.

IHG is already responding to these challenges. Crowne Plaza is rolling out mobile check-in from December 2013. The service will eventually become a brand standard, giving guests what they want and enabling staff to handle fewer transactions so they can focus on more meaningful guest interactions.

In China, IHG has responded to the need for a bespoke, customised service among travellers by launching a new international hotel brand catering specifically for the needs of Chinese travellers, HUALUXE Hotels & Resorts.