Nothing succeeds like excess
Hotel prices for August have doubled since the same time last year, according to Hotels.com. Flight costs are also rising: a Hong Kong-London round trip with British Airways in late July costs HK$11,560, and that’s economy class.
But for the mainland’s top tier of spenders, the pricier the better. High prices keep out the riff-raff and turn luxury travel packages into supreme networking opportunities. And because the trips are indulgent and scream status, there is a boom in luxury tourism out of China, for which the London Olympics provides the perfect hook.
Take, for example, a series of Olympic packages recently launched by an outfit called Caissa Travel, the starting price for which is 259,999 yuan (HK$320,000).
But why go luxury when you can have the “extravagant” package, with an eye-watering price tag of 8.88 million yuan for a group of 12, or 733,300 yuan per person.
According to a Caissa representative, the eight-day package starts with a flight out on a Boeing business jet with full-size showers, an executive boardroom and a queen-sized bed in a private room.
The tour kicks off with the opening ceremony at the London Bowl, viewed from the best seats in the house: box seats that would otherwise cost £2,012 (HK$24,700) apiece. The group can then watch one Olympic event of their choice before flying first-class to Iceland to play night golf.
“From the posh restaurants to the limousine that drives you around, everything will be top end. We don’t know which hotel yet, but for a deluxe trip like this, you don’t expect anything lower than a five star,” the representative says.
“We’re still working on the itinerary, but we’ve got a few bookings already,” he adds.
Lavish Olympic tours are not new to China, they are just getting more expensive. In 2004, a group of VIP chief executives reportedly paid 88,000 yuan each to attend the Athens Olympics. Today, of course, that sounds a great bargain.
Ouyang Kun – head of the Beijing office of the World Luxury Association, an independent market research group – says many high-end travel packages are on offer to mainlanders.
For example, Ouyang knows of a 25-day tour to England, involving travel by private jet – this being the sine qua non of such packages – stays in a chateau, a yachting trip and other extras, all for a mere 3 million yuan per person.
“If the price is too low, it loses its appeal. The rich Chinese tourists like the idea of going on an expensive trip,” says Ouyang.
The high price acts as a filter, he explains, ensuring that the trip functions as a forum for networking and deal-making, he adds. “It’s definitely not a family thing, and children are not expected to go on a luxury tour on this level, running around and screaming their way through all the swanky places,” he says.
Last year, Ouyang’s association organised a 40-day tour of Europe for dozens of wealthy businessmen, who paid 1.2 million yuan each.
“Some of our travellers wanted to invest, and we arranged for them to meet with executives of European luxury brands such as LVMH and Hermes – something businessmen in China cannot easily arrange by themselves,” he says.
“Eventually two businessmen from Wenzhou bought a 40 per cent stake in two Italian brands,” he adds. “I can’t name which two. For all their big spending, rich Chinese businessmen are discreet.
Published in Money Post on 30 April 2012