Capturing quality tourists

It may be easier said than done, but attracting and capturing quality tourists who are resilient, and perhaps resistant to the vagaries of the global economic movement, is the way to go for countries that are reliant on their tourism sector to bring in foreign investments and revenues.

According to a recently released tourism study titled “Capturing High Quality Tourism for Southeast Asia” by Oxford Economics, Southeast Asian policymakers are increasingly focused on attracting quality tourists to enhance their tourism industry.

This means, Oxford Economics said, “focusing on boosting the levels of spend per visitor, rather than the overall number of visitors that arrive. The goal is to maximize the economic gains from tourism, while minimizing some of the environmental and social challenges that it can present.”

For travelers, the study said, quality tourism means unique, personalized and immersive experiences that allow high quality tourists to engage with local culture, enjoy the natural environment and feel comfortable in their surroundings. 

However, the market for travelers who are willing to pay more for quality experience is highly competitive, Oxford Economics pointed out, with Southeast Asia’s leading destinations vying for position against the world’s tourism hotspots.

Oxford Economics surveyed 1,800 potential Southeast Asian tourists from the region’s five major source markets: China, Korea, Australia, the United States and the United Kingdom. These source markets accounted for 46 percent of all travel and tourism spending in Southeast Asia in 2019. 

Using a discrete-choice experiment to understand how prospective tourists value different aspects of their trips, Oxford Economics uncovered the factors that determine the destination choices travelers make, with a special focus on food and beverage (F&B) experiences, and assessed how much different traveler segments are willing to pay for premium offerings. 

Premium experiences were defined by high quality F&B products and dining options, a wide variety of choices, easy access to F&B venues and exceptional service when travelers arrive.

Among the key insights Oxford Economics learned was that F&B offering is one of the big drivers of destination choice. Seven out of 10 potential Southeast Asia tourists regard F&B experiences as “important or very important” to their destination choice. 

For high-income travelers, the share rises to 75 percent. In fact, the quality of the F&B offering in a destination is more important to the average tourist than the historical and cultural sites the destination offers.

The second insight is that high-quality tourists are attracted to premium experiences around F&B. The study showed that Southeast Asia is globally renowned for its cuisine, but the quality food is not sufficient in its own right to attract quality tourism. 

Oxford Economics found that certain “premium” features of the F&B experience are instrumental in driving destination choice for potential Southeast Asia tourists, which suggests that a prospective tourist to Southeast Asia is 2.5 times more likely to choose a destination when premium F&B experiences are available, compared to another destination with more standard service offerings, all else being equal.

Premium F&B experiences include high-quality F&B products and diverse, high-quality options from award-winning chefs and a full range of value, standard and premium alcoholic drinks.

Additionally, they found out that there must be a  wide variety of options that are convenient to access, and numerous venues serving a variety of beers, wines, premium spirits and innovative cocktails; easy and convenient to access, with early opening and late closing, with exceptional, personalized service and knowledgeable staff, skilled and trained restaurant and bar staff, qualified mixologists and expert sommeliers.

The third insight was that visitors to Southeast Asia are willing to pay $250 more per person per day on average, to visit destinations that offer premium F&B experiences. This preference is not held exclusively by the wealthy, niche or luxury travelers. 

In fact, visitors from lower, middle and higher income categories are all willing to pay more to upgrade the F&B experience in their travel destination. A majority of potential Southeast Asian tourists, or  71 percent,  regard F&B experiences as important to their destination choice.

However, Oxford Economics emphasized that although travelers are willing to spend more for premium experiences, value for money was among the most important universal influences on a traveller’s choice of destination in Southeast Asia’s major tourism markets. 

Ultimately, Oxford Economics found, there is a limit to any traveler’s budget. Their  analysis suggests that a $20 increase in price (per person per day) for a premium F&B experience would cause 10 percent  of travelers to trade down to a less-premium option, indicating that  there is a willingness to pay for premium, but not at any cost.

Another insight was that there are differing aspects of premium F&B to  different source markets. Oxford Economics learned that a premium experience is multi-dimensional, with different aspects appealing to different travel segments. 

Visitors from China, for instance, are more than three times as likely to choose destinations where F&B options are conveniently accessible, and they prioritize F&B more heavily in their travel plans, compared to visitors from other markets. They also demonstrate a higher willingness to spend on premium F&B experiences over basic alternatives than visitors from other source markets in our study.

Chinese travelers, the study showed, were most willing to pay for F&B options that are easily accessible. 

The availability of premium F&B experiences was valued by all categories of travelers in the study. This insight highlights how traveler preferences across Southeast Asia’s major tourism markets vary, and the importance of being able to tailor premium tourism experiences in a destination to meet the nuanced demands of different travel segments.