Conflict in the Middle East may have skewed travel intentions in the Asia Pacific but luxury travellers – led by newly-rich tech and IT workers – won’t be held back for long, research by Visa has revealed.
Speaking at ILTM Asia Pacific, Simon Baptist, principal economist at Visa AP, said that new wealth hubs are being driven by data centres and semi-conductor work, right across the region but principally in Taiwan, Vietnam, Malaysia and China.
“Taiwanese outbound spending is the fastest growing in Asia Pacific,” Baptist noted. “It's not a huge market, but it's got the fastest percentage growth rate, and these are people who are making lots of money, either in the stock market or through wages.”
Visa’s analysis of credit card spending shows that as a result of the Middle East conflict there has been a significant shift in travel intentions, brought on by rising air fares.
“We see much less travel between Europe and Asia this year. So, people did cancel trips and did something else instead. There's more regional travel within Asia, so we see things like more mainland Chinese travellers going to Australia and New Zealand.
“We see more Australian travellers going to Thailand and Vietnam. They're not going to Europe, because it's too expensive, and they can't get an air ticket, so they're going to Asia Pacific beaches instead.”
Baptist said these changes would unwind as fuel prices came back down.
“There will be a bit of a pent-up demand for Asia, Europe in both directions. That’s something to think about for offers or marketing or activations in the in the second half of this year.”
The fastest growing category of tourist spending is currently in South Korea, where most of the spending is going on healthcare services, Visa noted.
The credit card company also identified differences in the reasons people are travelling.
While relaxation and visiting friends and family still influences travel decisions, Gen Z's and millennials are more interested in travelling for social media reasons, because “they want their luxury experience to look good on TikTok or Instagram,” Baptist added.
Related: How Asian Gen Zs are travelling differently
Meanwhile, spending on cosmetics is growing by about 18% while spending on hobbies, toys and games is growing by 40%.
“This is about passion pillars – sport, gaming, content, entertainment, music; the things driving passion. And where there's passion, people spend on it,” Baptist said.