By doubling their footprint, Taj Hotels and Shangri-La are hoping to secure a foothold in the world’s fastest growing travel markets

The Asian luxury travel segment is growing rapidly, and it’s changing fast.

A 2016 report from travel tech firm Amadeus argues that some of the fastest growth in the luxury travel market is being driving out of Asia Pacific (APAC).

That the sector is growing is backed up by a recent by CNN report, which highlights nine new high-end hotels that will open doors across the region in 2017 to cater to a new breed of traveller. In it Sii Eawsakul, an early pioneer in Asian online travel and founder of luxuryhunt.com, is reported saying that in recent years “there has been a rise in travel experiences based around fashion, cuisine and off-the-grid escape”.

Little wonder then, that in the latter part of 2016, two of Asia’s biggest, most iconic luxury hotel brands – Hong-Kong-based Shangri-La and Mumbai’s Taj Hotels & Resorts – joined forces in a bid to win kudos with their loyal customer base.

 

After putting heads together, the two groups quickly realised the scale of the potential. “Soon there will be more Indians travelling abroad than the entire population of the United States – and these travellers are going to require the hospitality sector to make changes to suit their needs,” says Chinmai Sharma, Chief Revenue Officer at Mumbai-based Taj Hotels Resorts and Palaces.

Soon there will be more Indians travelling abroad than the entire population of the United States

Chinmai Sharma, Chief Revenue Officer, Taj Hotels Resorts and Palaces.

By joining forces, the brands will cover off two of the biggest outbound travel markets in the world – namely India (Taj) and China (Shangri-La). While China is still the fastest growing outbound travel market, India is fast playing catch up. According to Amadeus, at 12.8%, the compound annual growth of India’s luxury market is higher than any other BRIC nation, and the highest of the 25 countries explored in its 2016 report. “India’s booming middle class presents great potential for luxury travel investment over the coming decade,” it says.

“Soon there will be more Indians travelling abroad than the entire population of the United States – and these travellers are going to require the hospitality sector to make changes to suit their needs,” says Sharma. “So we saw this as a unique opportunity to double our footprint.”

Like many big global chains, the loyalty-led ‘Warmer Welcomes’ alliance is aiming to tie in members through ‘unique and differentiated’ offerings such as the ability to convert points between programmes. The combined database of six million members who can now enjoy benefits of the so-called ‘across 200 hotels, in 27 countries and in 131 destinations, is said to be ‘at a scale never seen before’.

Technology focus

Sharma understands only too well that luxury travellers want unique experiences in the physical offering, but is clear that this can’t happen in isolation from the digital and social revolution underway in hospitality.

“Our guests are the driving force behind our innovation and we are working towards better digital integration across all our consumer touch points as well as at the back-end,” he says.

To this end, the group has invested in a mobile app to improve the user booking experience, which also offers location-based mobile customer communication including chat and relevant point-of-sale offers as well as mobile check-in and check out.

While Sharma sees a role for metasearch and the OTAs (partners include Expedia, Priceline, Ctrip and MakemyTrip), the focus is on building technology that drives both loyalty members and guests to book direct.

Improving its technology infrastructure is an investment priority for 2017.

Among the steps it is taking are to:

• Standardise property management systems across all hotels to ensure a smoother onsite experience.

• Run stronger than ever loyalty programmes

• Deliver desirable products and offerings through appropriate customer relationship management tools and techniques

• Use recently installed revenue management software to maximise opportunities in key markets  

As part of this technology overhaul, in the past 18 months the organisation has restructured into three separate verticals for loyalty, analytics and digital, which Sharma sees as the “drivers of the business”.

With these teams Taj has standardised the customer experience across all consumer touch points, most recently with the launch of a new app. Additionally, a key focus developing and discover new destinations in India and in other key markets.

While the two groups are undoubtedly hoping to capture a large market share, the luxury customer also wants a deeply personal experience.

A word of advice from the Amadeus report comes from Joachim Hartl at Portugal’ Conrad Algarve: “You need to be able to listen and read between the lines or their body language and their behaviour throughout their trip and to communicate that extremely fast within your team.” He also recommends a “constantly fed” CRM system.

At Taj, the aim is most certainly to deliver desirable products and offerings through appropriate customer relationship management tools and techniques. “Luxury travellers definitely want unique experiences,” says Sharma, “and we’ve responded to that desire for differentiation and uniqueness with our brand philosophy called ‘Tajness’– our signature touch that is unmistakably Taj.” 

Yes, that does sound like a line from a marketing brochure! But the test will be in whether the new loyalty programme and customer offering really does deliver the ‘personalised uniqueness’ that each individual Asian customer is after. It had better, because the competition is growing.