AW: When you look long-term, what does this mean for the global traveler? By 2027, there will be one billion more people in the middle class. This is going to have an enormous impact on travel in China and India.
It used to be the United States was the first aspirational destination. In the future, they’re going to go from China directly to Africa. They’re going to go to other places in Asia. Travel is going to be on a growth curve for as long as anyone can see. As soon as people get money, the first thing they want to do after they’ve got the TV is they’re going to want to take a trip.
PG: Right now, it’s staggering to me that the Chinese tourist who visits the United States will spend in one week: $7,000. Americans don’t spend that.
AW: A lot of what they’re spending is on Western brands, luxury brands. They’ll stay in the high-end hotels and go to the Gucci stores; they want to make sure that when they come back, what they’re wearing is immediately identifiable as a brand that their neighbors will know. They’re spending on luxury because the midland labels are not going to impress them.
PG: It’s great that they are spending, but are we ready for that cross-border traffic?
AW: In one way we’re really not ready. How many hotels can you go into where there is someone in residence on the staff who speaks Chinese? When a Chinese traveler goes down for breakfast, is the food going to be familiar? For the most part, no, it’s not. Hotels that are tuned into this and make Chinese travelers feel welcome are going to reap huge rewards and will become the travel brands to be adopted early.
PG: It’s American ethnocentrism. Looking at the country today, it’s been a struggle for so many people to make ends meet. Home foreclosures are on the rise again. And yet people are still traveling. Is it that last supper mentality that if we don’t go this year we’re never going to go?
AW: We’re still seeing a lot of the result of the pent up demand that followed the recession. In 2009, everybody just stayed home. There was just no movement. 2010, it began to break. In 2011, it broke out more, but now I think it’s beginning to really break through. One thing keeping things from going even further is the airfares to Europe.
PG: Yes, but at this time in August we are about to see airfare sales. Kids are going back to school, but the airlines still have to fly those routes whether they want to or not because of the bilateral agreements. What a great time to go to Europe! People may think that the travel industry is still predicated on rate when it really is predicated on value. And September and October in Europe mean value.
For more information, check out:
- Peter’s recent CBS This Morning report on Virtouso Week
- Peter’s report on Growing U.S. Tourism and the Travel Association Hall of Fame
- Peter’s Interview with Virtuoso CEO Matthew Upchurch
- Peter’s News Report on the Obama Initiative
By Peter Greenberg for Peter Greenberg Worldwide
