How Asia’s Ultra Wealthy Are Spending Their Downtime

Written by Tara Loader Courtesy Wealth-X on . Posted in Luxury Business News

With one of the highest proportions of self-made wealth in the world, Asia’s richest know how to work hard. Increasingly, they are learning to play hard too.

Last year Alex Malcolm, founder of luxury bespoke travel provider Jacada Travel, took a group of twenty Mainland Chinese billionaires and their families to Latin America for a two-week philanthropic holiday.

“This new wave of super rich Asian entrepreneurs are not looking for bling; they get that all the time,” said Malcolm, who recently opened an office in Hong Kong to service the Mainland market. “They want something extraordinary, they are adventurous and they want to interact with everything they see. When we arrived at the Amazon (river), they all just jumped into the water fully-clothed.”

With one of the highest proportions of self-made wealth in the world, Asia’s richest know how to work hard. Increasingly, they are learning to play hard too – but it’s not all about handbag shopping.

The billion-dollar question for industries catering to the hobbies of the ultra wealthy – like luxury travel, high-end fashion, hospitality, yacht brokers and vehicle manufacturers – is: how do Asian ultra high net worth (UHNW) individuals want to spend their free time?

The current spend on luxury leisure by Asia’s ultra affluent is relatively minimal compared to Western peers. On a global scale, Asian consumers spend the least on the trappings of leisure – including art, aviation, yachts, travel, cars, antiques and jewellery. The total of UHNW luxury assets in North America is US$370 billion, in Europe, US$330 million and in Asia – the most modest of the three – US$240 billion, according to Wealth-X data. For example, Asian superyacht owners make up only 9 percent of the global total, compared to 44 percent in North America.

Mykolas Rambus, chief executive of Wealth-X, said: “Selling superyachts in Asia is one of the most difficult jobs around, as UHNW Asians traditionally work more of their golden years than their Western counterparts, don’t often see leisure as virtuous, and have not usually built up life experiences that would attract them to a nautical lifestyle.”

He added that the industry needs to engage Asia’s second generation, of “spenders” rather than the first generation entrepreneurs, and firmly plant ideas connecting what is means to be wealthy with leisure.

“Art is the largest annual spend of the world’s ultra wealthy, due to a relatively well-organized and global ecosystem of providers. The leisure industry and related players have much to learn,” said Rambus.

Others believe that the turning point for Asia’s wealthy pleasure-seekers has already come. Although it may be the smallest region in terms of its appetite for luxury leisure, it is the fastest growing. Last year Asia’s UHNW spent US$23 billion on luxury hobbies, the second biggest spender after North America at US$29 billion. This is likely to catch up sooner rather than later, believes Malcolm who arranges trips to Latin America, Africa and the South Pole. Most of his clientele hail from the West, with only a fifth coming from Asia. This type of holiday doesn’t come cheap, and can range up to US$80,000 a head. But once-in-a-lifetime itineraries take in three different countries and experiences like flying over the Amazon by hydroplane, heli-surfing in Chile and taking a luxury riverboat deep into the rainforests.

“This sort of highly-adventurous experiential traveller in China is still the exception. But we feel it is an under-served part of the leisure industry in Asia and so we plan to be in there first,” said Malcolm. “There are a growing number of Asian consumers who no longer want to go to Paris and buy a handbag off the shelf. They want those ‘wow’ experiences that are completely unique with a combination of amazing landscape, wildlife and conservation.”

Others agree that Asian ultra wealthy consumers are increasingly looking for “a unique experience”. Vincent Lai, managing director, Greater China, of concierge firm Quintessentially Lifestyle, believes that the future spending habits of UHNW will be for more private and off-the-beaten-track experiences. “They may want to explore islands owned privately, or hire a yacht for few hours just to have afternoon tea instead of going to hotel with the crowd.” There has been an influx of members who are looking for more meaningful travel excursions that include a socially responsible aspect, be it a retreat in India, a volunteer trip to Cambodia, or exploring and learning about the Brazilian rainforests, said Lai.

Sonu Shivdasani, founder of the Soneva Group, agrees that sustainability and simplicity are increasingly in demand amongst rich holiday-goers.

“Deep down, people desire the simplest things, which are often the money-can’t-buy experiences and frequently the most sustainable option,” said Shivdasani. The 48-year-old British-Indian entrepreneur is behind the ultra-luxurious Soneva Fushi in the Maldives and Soneva Kiri in Thailand. Shivdasani has transformed the resort model into what he believes represents the pinnacle of “intelligent luxury”. With a glittering roster of repeat clients like Madonna, Paul McCartney and Gwyneth Paltrow, Shivdasani says he is getting increasing demand from Asian holiday makers.
Über-luxury might seem incompatible with sustainability, but the Soneva ethos is to be eco-friendly wherever it can. Shivdasani says he upholds “slow life” values in all of his resorts (sustainable, local, organic, wellness, learning, inspiring, and fun experiences). The island grows most of its own organic produce and recycles waste materials, for example, turning crushed glass into mosaic tables and composting the garden with waste from the restaurants.

Luxury shopping remains a popular pastime for Asia’s wealthy, and increasingly they want heritage brands and tailor-made items, said Ulrike Pohl marketing manager of the Luxury London Quarter (LLQ), a concierge company providing bespoke closed-door shopping experiences in London’s most exclusive enclaves.

“Asia’s wealthy are looking for unique experiential shopping to differentiate them from their peers,” she explained. “Chinese travellers spent £260 million in Mayfair last year, up 31 percent on the previous year. There has been really no sign of any slow down.”

One thing is clear: if the leisure industry wants to be able to harness the desire for exotic unique experiential leisure, it first and foremost needs to establish trust with its new generation of luxury pleasure-seekers. Those that can will reap rewards.

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