India, Indonesia set for travel 'bonanza' as middle classes expand

By Patpicha Tanakasempipat

 

India, Indonesia and Vietnam are set for a tourism “bonanza” as their middle classes expand and grow wealthier, according to the deputy chief executive officer of hotel group Accor SA.  

“When there is good business, people get more wealthy, and then they consume and want to have fun, and that’s where we fit,” Jean-Jacques Morin said in an interview in Bangkok. “The way people consume has changed. Nowadays, people want services, not necessarily products. They want to have experiences, a trend that has been deeply accelerated by Covid.” 

 

With almost 6,000 hotels around the world and more than 45 brands ranging from budget chains like Ibis to the luxury Raffles and Banyan Tree resorts, Accor is aiming to expand its portfolio by 3-4 per cent this year, Morin said. Asia will likely account for about half those openings, he added. 

 

Southeast Asia, and India in particular, carry significant growth opportunities, Morin said. The “big tigers” like Singapore, Thailand and Japan will continue to perform well, along with upcoming markets such as Vietnam and Indonesia — Southeast Asia’s most populous country and biggest economy.  

 

Asia has seen a rather slow post-pandemic recovery compared to other parts of the world, held back by sluggish growth in its biggest economy, China. While Morin said he expects only “marginally positive” growth in revenue per room across Accor’s 700 hotels in China in the short term, he still believes it will bounce back in the years to come. 

 

Meanwhile, Morin expressed a bullish outlook on India. In 2023, Air India Ltd. and IndiGo placed record-breaking orders for 970 planes to ready for a domestic and international travel boom. 

 

“Look at the numbers,” said Morin. “The middle class is the most critical important driver of this industry. When you become a little bit more wealthy, you want to see the world.” 

 

And the rise of “Gen Z” tourists — people born around the turn of the millennium — will spark faster growth in boutique, design-driven hotels in coming years, he said. Younger tourists spend significantly more on food and drinks and like to go on so-called bleisure trips, where the line between leisure and business is blurred.