The consensus view is there is still pent up demand for travel amongst Mainland Chinese and disposable income to do so, however, there are subtle changes in travel preferences that Asia’s operators would do well to take note of.
Interest and spending on wellness travel has already been rising and Covid-19 is seen as being a key accelerant of this trend.
China Outbound Tourism and Research Institute founder Dr Wolfgang Arlt notes that while it’s obvious that the pandemic has brought health to the forefront of everyone’s minds, there are also demographic factors at play in China that will create a whole new market segment.
“The cohort of Chinese born in the 1960s has already been a part of the international market before especially as business travellers,” Arlt wrote in a January editorial. “Typically coming back from studies overseas in the 1990s with a good business idea to be transferred in a sinicized version to the Chinese virgin market with the help of some funding from Daddy’s friends, they have been working ever since 24-7 without regard for their personal health.”
“Now the 60th birthday is coming closer and the body starts to give clear signals that it will not tolerate being disregarded any more.”
Arlt points out that the market for medical, spa and detox treatments has already been expanding, but that growth is likely to pick us as 25 percent of the Chinese population is expected to be 60 years and older at the end of the current decade.
According to figures from Bernstein Research, wellness tourism is expected to be a $919 billion industry by 2022, more than doubling in size over the past decade. However, it’s still a relatively small segment of the total $4.5 trillion global wellness market at 14 percent.
“The growth is particularly funded by the luxury end, with wealthy travellers ditching the all-night Full Moon beach parties in Thailand for wellness and yoga retreats focusing on self care,” the firm wrote in a January note.
“This trend will only be further accelerated with Covid with consumers not only wanting to travel again but with a renewed focus on mental health and well-being.”
The research note points out how global resorts are putting their fitness facilities in prime locations on the property, rather than burying them in a basement. It points to examples, such as the Park Hyatt Tokyo, which offers complimentary yoga classes on the 47th floor overlooking the city skyline..prime real estate more traditionally reserved for a bar.
In a consumer survey, Bernstein found that 67 percent said that health lifestyle was more important than two years ago, with 52 percent saying that health now influences their hotel choices.
Macau already has the potential for wellness tourism on its radar as China’s population ages.
“We cannot ignore our senior visitors, who may be avoiding traveling nowadays because of their higher risk to COVID-19, but what is grey now may be golden to Macau in the future,” Desmond Lam, a professor of integrated resort and tourism management at the University of Macau told us recently. “This phenomenon gives room for the development of the medical, health and wellness tourism sectors,” he said, suggesting possible ways Macau can diversify its tourism offering.
The majority of Macau’s IRs have world class spa and fitness amenities, suggesting that it’s the marketing departments that need to tailor their messaging to this market segment.
In the short term, there’s little sign of any return to mass travel, with Beijing urging people to stay at home during the upcoming Chinese New Year holidays due to new outbreaks of Covid-19.
However, most analysts agree Macau will be a key beneficiary once they are able to fully travel again.
Statistics on luxury spending in China remain buoyant, suggesting there is still considerable disposable income for travel budgets.
According to a report from Bain Capital, the luxury goods market in Mainland China likely saw 48 percent growth last year to RMB346 billion, in part fuelled by the fact international travel was curtailed.
China doubled its share of the global luxury market last year, with growth expected to continue through to 2025.