Luxury travel is re-emerging since COVID with a vengeance. Pent up demand from the wealthy consumer, combined with a reinforced sense of not knowing what is around the corner, is driving the intrepid and adventurous. Whether in the safari segment in East Africa, or amongst birders in Patagonia and the Andes, there is a new found confidence in the segment which belies the trauma experienced over prolonged lockdowns and the virtual grounding of aircraft.
This brave new world differs in material ways and has accelerated some of the trends the World Travel and Tourism Council had already been outlining. Experiential travel has renewed salience. People care deeply about bringing back not only tan lines or avoiding engorged waistlines, but memories marked indelibly on their minds and those of their families. In an increasingly identikit world where the worst excesses of mass tourism have rendered authenticity valuable through scarcity, discerning tourists appreciate unique destinations.
Mindfulness- once derided as a buzzword beloved of marketing agencies- has gained greater definition and clarity. Hectic day-to-day life, combined with greater awareness of the value of mental health, is driving consumers to the pristine and wild, affording the opportunity to reset and regroup. Leading international brands such as Aman are increasingly pushing this narrative, and commanding high rates and occupancies by articulating what this means in practical terms.
Sustainable travel has come on significantly in recent years, however, the pandemic reminded the wealthy of their obligations to act as stewards and custodians of the natural world and not act to denude it for temporary gratification. This means increasingly close attention is paid to not simply building materials and sustainable food chains, but to how we travel. Better perhaps to visit destinations within close proximity of developed markets, rather than journey twelve hours from London, Singapore, Hong Kong, Dubai or New York. In all instances, there is a growing appetite for travelling less, but staying longer.
With longer stay arrangements, unsurprisingly, the private (branded) villa market is growing in popularity. As recent Savills analysis highlights, this has potential to grow in select areas, enabling a ‘home away from home’, while also providing visibility over income, and by extension, downside protection. Prices commanded by the best hotel operators are robustly high, and by entering the broader rental pool, provide consistent income, even at comparatively low occupancies.
In spite of these new (or at least accelerated trends), some things remain constant. The rich are not immune to the allure of crystalline waters or swaying palms. They still seek out the best diving and most paradiscal bays, but are discerning where they find them. The great success of much of Southeast Asia in drawing on a broad sweep of international clientele, has also had its limitations. Many destinations now cater to all segments, with pockets of relative exclusivity, but little by the way of genuine isolation.
This is true beyond the beaches of Vietnam and Cambodia, extending through the Maldives, Sri Lanka and undoubtedly into the Caribbean, where brochures too often flatter to deceive. So it’s perhaps unsurprising, Indonesia is gaining attention. Within striking distance of major financial centres, it has largely avoided the worst excesses of commercial tourism. Bali has its own particular (and highly successful) model, so too Lombok and even the Gili Islands. But it is in the more exclusive enclaves, especially those with strong connectivity, where investors are seeing increased prospects and upside.
The figures are well rehearsed: over the next decade, tourism is due to grow at a rate of ten percent per annum in Indonesia, nearly double that of the overall economy. An extraordinary 500,000 new jobs are due to be created each year in the same period, ultimately yielding 16 million roles, with manifold downstream benefit, again cheering those who care about recreation creating social impact.
It is against this backdrop, Indonesia is emerging as the darling of the luxury travel segment. With a vast archipelago of unspoilt and uncharted islands, it represents one of the last frontiers for accessible wilderness in Southeast Asia. With complicated laws to navigate as to development and ownership of land, projects are not as bountiful as the landmass of this extraordinary country may suggest. Those who pay heed to current imperatives of sustainability and social responsibility, with more familiar imperatives of connectivity and tenure, are likely to see appreciation as natural capital rises on the agenda of tourists and investors.