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SLH CEO, Mr Paul Kerr and his team
“Exotic regions and customized travel are highly appealing to this segment of travellers,” said Publisher of Millionaire Asia, Mr Brian Yim.
One company that’s certainly benefited from the upswing in the luxury market in Asia and the search for unique experiences is Small Luxury Hotels of the World (SLH), which recently held an event for its hoteliers in Singapore.
SLH CEO Mr Paul Kerr said that the luxury market was back and growing in force more so in Asia than in the rest of the world. “In the first three months of 2011, our hotels have done so much better compared to the same period last year.”
And it’s Asia that is driving most of the growth, according to Mr Kerr. As a testimony of its conviction, SLH opened a regional office in Singapore last year and recently appointed representation in India, Hong Kong and China.
The group, which is made up of over 520 small independent hotels in 72 countries, saw a revenue increase of approximately 15 per cent since January 2010 and a 18 per cent increase in reservations compared to 2009.
The group’s presence in Asia Pacific has also grown. In 1991, SLH had two hotels and 184 rooms in Asia Pacific. In comparison, SLH now has 106 hotels in the region. The number of reservations SLH has received in this region has grown at a staggering rate of nearly 130 per cent in India compared to the same time in 2009.
Despite its small size, Singapore is a strong market for business. As a sales country or source market, revenue from Singapore increased by 44 per cent in 2010 compared to 2009, based on bookings made from Singapore through the SLH channels.
Naumi, SLH’s hotel in Singapore, has also been doing well. Based on bookings made through the SLH channels, the average room rate at Naumi has increased by 30 per cent and revenue is up by 32 per cent in the first quarter of 2011 compared to the same period last year. It was recently ranked second out of all hotels in Singapore on TripAdvisor.
Mr Yim can attest to the strength of the high net worth segment in Singapore. “In 2010, the Singapore economy was probably one of the best performing economies in the world with a scorching 15 per cent real GDP growth. Real estate values continued to climb, stock prices were buoyant and all these led to a "feel good factor" that translated to helping the luxury market climb out of its worst recession in 2009, one which saw the US$8 billion market slump by 50 per cent.”
He said all indications pointed to the health expansion of the luxury market in Asia. “ East Asia economies, defined by the Asian Development Bank as China, Hong Kong, South Korea, Taiwan, Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar, and Vietnam, also saw robust economic growth in 2010 which certainly bodes well for the luxury market.”
He added, “China is now the world's second largest luxury goods market, with sales estimated at over US$10 billion accounting for 27.5 per cent of the global market, according to Bain & Co.
“The figure is expected to grow further to US$14.6 billion in the next five years, making it the world's top luxury market. In fact, Asia has overtaken Russia who used to occupy first place before the crisis, and the luxury goods market is now led by China, Japan, and South Korea.
“The lust for luxury in Asia cuts across many consumer categories from private jets to real estate, jewellery to branded bags, shoes, and watches and certainly bespoke travel experiences.”
Unsurprisingly, luxury customers are also moving online, said Mr Yim.
SLH has certainly seen an increase in digital engagement with its customers. Its direct online business now stands at 26 per cent and is on the increase. Since launching its first iPhone app in February 2010, the app has received nearly 60,000 downloads to date.
The brand also has a strong presence on Facebook with more than 33,000 'likes' and on Twitter with over 3,300 followers. A large percentage of Facebook fans are coming from emerging markets, with India in the top place and Brazil falling within the top five. In an attempt at deeper penetration, SLH launched a Japanese twitter page in 2010.
Mr Yim noted that the millionaire population in Singapore continues to grow from about 81,000 in 2010 to about 84,000 in 2011. Datamonitor reports that High Net Worth Individuals with Assets Under Management of one to three million US dollars in Singapore and Hong Kong is expected to increase by close to 40 per cent to 122,000 in the next three years.
“China has the fastest growth rate for millionaires, rising 30 per cent to around 480,000 currently, while India's millionaire population is currently numbered at about 127,000, rebounding from a drop to 84,000 during the recession years.”
To ride on this growth, his Singapore-based publishing company is launching a privilege programme called "Legacy" in July.
“This is the most exclusive benefits programme targeted at ultra high net worth individuals, royalty, former heads of states, tycoons and thought leaders. Millionaire Asia continues to create events targeted at millionaires which include private aviation parties, our Millionaire Summit investment series and thematic lifestyle parties.”
So buoyant is the market that SLH, celebrating its 20 th anniversary this year, can afford to give away “gold coins”. It is running a Gold Coin competition on its website in which players have to find 20 gold coins. There’s a monthly draw and the winner gets to walk away with 20 room nights.
