Moving into the flow of luxury tourism

Data shows a significant increase in the number of visitors in the high-end segment

By LYDIA NATHAN

Malaysia, while thriving as one of the top five most visited countries in the region, is currently ranked second in the luxury tourism market after Thailand.

Data from Luxury Escapes Asia shows that Malaysia is also seeing a significant increase in the number of visitors particularly in the high-end segment, which offers an overall experience with the ability to create add-ons that are tailored to the clients’ needs.

Luxury Escapes Asia head Graham Hills told The Malaysian Reserve in an exclusive interview that the segment is experiencing a good growth.

“The luxury segment in Asia is certainly growing. Seventy-five percent to 78% of travellers have moved to between the middle class and affluent brackets, which is a sizeable segment for us,” he said.

Compared to the traditional holiday, where accommodation or tours may be booked separately, Luxury Escapes offers “an entire experience”.

“Typically, what makes it luxurious are the upgrades. It could be spa inclusions, special transfers to and fro from the airports, private access to airport lounges and specialty tours.

“It is about positioning the products from a value point of view. The deals are often 30% to 40% cheaper than elsewhere and are solely unique because they begin right from the point of origin before you even board the plane,” Hills said.

The luxury segment in Malaysia has typically attracted younger families from ages ranging between 35 and 40, or younger couples around the same age.

“We see our Asian tourists go on shorter stays at relaxed type of resorts. It’s interesting because Asia is our biggest market. So, we’ve had to provide these options for our customers.

“Because of the time constraint, the number of trips booked is skewed to nearby destinations,” Hills said.

According to Hills, Malaysia has done a good job in positioning itself as a wholesome tourism destination, particularly in the luxury segment.

“One destination that stands out is Langkawi Island for tourists from abroad but domestically, Pangkor Laut Resort has been a favourite for locals.

“More recently, we’ve also seen bookings to the Borneo Island increasing,” he said.

Hills added that Malaysia has had a strong brand for a number of years now.

“Obviously there is room for growth in every market. As the industry and government begin to focus on specific segments, the
luxury segment will definitely become a huge opportunity.

“Some emerging destinations like Desaru Coast have significant potential because of its close proximity to Singapore and some high-end brands like the Hard Rock hotel franchise.

“This is good because it shows that Malaysia isn’t overly reliant on just one or two destinations but constantly developing others — and that is the key,” Hills said.

Meanwhile, he said the biggest number of inbound tourists is from Australia, as proven by Luxury Escapes’ bookings.

Hills says Malaysia will continue to be popular with Australian tourists (Pic by Muhd Amin Naharul/TMR)

Hills added that Malaysia will continue to be popular with Australian tourists.

“It depends on what people want to escape from. For instance, during winter in Australia, the tropical climate in Malaysia may be just what they need.

“Obviously, food is a huge pulling factor as there are so many cultures and diversity in the local food. It is something Malaysia is known for,” he said.

Hills said while Luxury Escapes continue to make its mark across Asia, the Asian source market seems to contribute more to bookings into Malaysia.

“We’ve seen some good growth from Hong Kong, India and Singapore. As they mature, they will commend a higher percentage of bookings and will overtake Australia in the future as it varies from one destination to another,” he said.

He said at present, people would still have a bucket list of places that they would like to tick off before moving into territories that are more unique.

For instance, tourists may want to visit Sydney as a first-time experience to Australia, but studies and surveys reveal that Perth is the place for repeat travellers due to the cultural values that it offers.

“The reaction was that Perth provided a more laid-back, typical Australian showcase of culture with more outback experiences and less of a big bustling city life. So, these are sort of the new emergence of trends we’ve been seeing,” Hills said.

He added that the age groups among travellers vary from continent to continent.

Interestingly enough, the luxury segment in Australia has seen higher bookings from a slightly older age group of 45 years old and above.

Hills said using traditional channels to market the company’s deals has really resonated with that age group, which is different to its Asian counterparts.

“In Australia, they often advertise using a full-page spread in the newspapers and it has proven to work. Across Asia and in Malaysia too, we’ve seen the use of social media and other digital channels soar over the years.

“Since the larger number of bookings is by a younger generation here, digital marketing has been more predominant,” he said.

Along Melaka’s River Quay. The biggest number of inbound tourists is from Australia, as proven by Luxury Escapes’ bookings (Pic: Bloomberg)

He said Luxury Escapes Asia produces its own assets in terms of photographs or videos of locations and destinations.

Hills said the company also produces full videos on its site, depending on the size of the property or hotel and the overall destinations that are offered.

“Each property or hotel will have its own marketing campaign. We do not cannibalise hotels but we try our best to bring in new ones.

“In a study we did previously, 91% of people who used Luxury Escapes said they did not know of the hotel or property before it was advertised on the site,” he said.

Globally, Hills said the increase of impulse bookings has been noticeable, with 67% of people stating they travelled to destinations that were not planned.

As for Luxury Escapes, he said the option to “buy now and book later” has always helped increase bookings.

“Typically, a deal may be on for about three weeks but the travel period could be for 12 months. Letting people buy the deals first then look at dates later, gives them a chance not to miss out on the travelling they want to do but are not too sure of for whatever reason it may be,” he said.

Moving forward, Hills said that Luxury Escapes is expected to achieve a triple-digit growth globally within a year.

The company now has some 600,000 members across Asia and about 2.6 million around the world.

For Malaysia particularly, Hills said it has been exciting to look back and see how fast the business has moved since Luxury Escapes officially launched its site here officially, following its soft launch six months ago.

“We have many plans for Asia and around the world. Among them is to collaborate with partners that have a large presence in various industries. For example, we are looking at airlines and how we can incorporate flights into the deals.

“In Malaysia, we are looking at the media, in particular, and we are evaluating the print media option for now. It will be tested out in Hong Kong, but for digital media, we will continue to use the channels we have, along with social media influencers,” he said.

Hills said the company will also look at adding on villas onto the property options, as a large number of people who travel have younger children with them, and they might find villas more spacious than hotel rooms.

Luxury Escapes Asia is also considering various languages as its marketing medium, as English is currently the only language available on its sites.

“If we find that we can reach more people with their own languages, then it is something we will definitely look at. Especially for Asia, a local language might make more sense to our members here,” Hills said, adding that localisation of each destination plays an important role.