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Home|Business|Global Luxe Comes To Town

Business

Global Luxe Comes To Town

warwick_powell

 

 

WARWICK POWELL

FOUNDING CHAIRMAN
SISTER CITY PARTNERS


Luxury comes not only in the form of haute couture but in various pastimes and activities that people engage in. And while high street retailing may never find a place in regional Australia (and indeed is under threat from online shopping globally), there’s every reason to think that North Queensland could offer experiential luxe and its various accoutrements if it put its mind to it.

warwick-globalluxe

Luxury comes not only in the form of haute couture but in various pastimes and activities that people engage in. And while high street retailing may never find a place in regional Australia (and indeed is under threat from online shopping globally), there’s every reason to think that North Queensland could offer experiential luxe and its various accoutrements if it put its mind to it.

There is an ever growing and diversifying (Asian) consumer base for whom luxe is rapidly moving beyond a Louis Vuitton bag over the shoulder or a garish Versace watch adorning one’s wrist. Indeed, while these may well have been early symbols of the emerging Chinese upper middle class, they are rapidly becoming passé … Luxe matters socially when it is hard to come by; the reality is that branded luxury products are becoming a little too, how should one say, ‘common’.

Leisure & Experiential Luxe
Which is why the upper middle class in China (and indeed elsewhere in Asia, though perhaps not in such volumes) is turning to alternate forms of luxe.

We see two related patterns emerging.

The first follows the route of conventional European custom: wealthy folk invest in country estates and hoard expensive consumables. These parallel demands often converge when the wealthy move from buying palette loads of Château Mouton Rothschilds (at $1,000 a bottle) to buying the vineyards themselves. Country estates and holiday retreats are emerging as the next frontier of upper middle class acquisitive culture. (This is a bit ‘back to the future’.)

The second pattern is an emerging adventurism, where luxe is increasingly associated with forms of activity. Whether it’s yachting, thoroughbred racing, fox hunting or equestrian pursuits the emerging (Chinese) upper middle class consumer is seeking to engage in the experiences of luxe.

And it is here, at the convergence of the leisure and the experiential luxe that North Queensland has a real opportunity; to grow new industries, create new kinds of jobs and tap into the investment capacity of international companies keen to meet these convergent demands of the (Chinese) upper middle classes. I am talking about luxe tourism.

The world of horses
Let’s take one emerging niche as a case in point: the world of horses. If thoroughbred racing is the ‘sport of kings’, then getting into horses is unsurprisingly attracting strong interesting from an emerging well-to-do cohort in China.

Twenty years ago, no one in China rode horses recreationally. It was simply too expensive to maintain a recreational steed and there were simply no facilities. It’s a country with lots of people and little land. Wind the clock forward to 2016 and we see over 500 equestrian clubs with more than 500,000 registered amateur riders. Remember, there’s no thoroughbred racing industry in China, so all of this emerging interest in all things equine is focused on eventing, dressage, show jumping and general recreation.

To pursue this new recreational pastime, participants need to be well heeled. Land is scarce and precious in China, so keeping a horse and having room to ride one is an expensive hobby.

Despite this, research indicates that the number of riders is growing by a staggering 17% per year. This means the number of registered riders will double in the next five years to over one million.

Horses are being imported into China from all over the world to satiate this appetite. The majority are presently from Europe (especially the UK) and the USA, but Australian horses are attracting interest. Parents spending $20,000 to acquire and import a horse for their daughter or son is common; I’ve seen it with my own eyes on more than one occasion.

Tuition is also a growing market, and it’s a niche that expats are settling into quite well in exclusive riding clubs and country estates. Nothing but the best will do for this emerging cohort of princelings and princesses.

Last but not least, equestrian events are being staged in ever-increasing numbers, with international affiliations drawing the best horsemen and horse-women, and horses to China. We have major markets, horse fairs and such like, drawing increasingly large crowds of participants and aspirants.

“By 2021 there’s likely to be over one million registered amateur horse riders in China. We’re talking, therefore, about a combined mass of say 3 million plus people with a direct connection to recreational equestrian pursuits.”

Imagine if North Queensland saw the development of an equestrian-based facility that could support the pastime interests of this cohort, and at the same time provided the breeding ground, literally, for equestrian-related knowledge and equine exports.

The industry and employment opportunities are significant. Vets, trainers, groundskeepers, and breeders to name but a few. Such an industry would need to scale up. Given the size and growth of this “niche” interest, we need to achieve global legibility as a region with excellence in knowledge, service and facilities. Rinky-dink won’t cut it in this world of equestrian luxe. The raw ingredients are there already; it just needs a ‘landing pad’.

21st Century Rural Resorts
Which brings me to the idea of a 21st century rural resort. Such a resort can anchor a future equestrian luxe industry. It would kill two birds with the one stone, so to speak, by integrating the threads of experience and leisure luxe.

To meet this market, we need to understand the specific requirements and expectations of the audience in question. We can see that the numbers aren’t small. By 2021 there’s likely to be over one million registered amateur horse riders in China. Most of these are relatively young, funded in their pastime and hobby by well-to-do parents. We’re talking, therefore, about a combined mass of say 3 million plus people with a direct connection to recreational equestrian pursuits.

Even if we could capture 10% of this each year, we are talking about having some 5,770 new visitors each and every week making their way to our region. Perhaps that’s too ambitious. Less ambitiously, at a mere 2% of this market, at 2021 numbers, we are still talking 1,154 visitors on a weekly basis. Chinese tourists spend on average $8,000 per person per visit (2015/16); on this basis, if we could cater to this leisure-experiential luxe niche, we can generate $480m additional direct expenditure in the region each year.

Add to that the purchases and export of horses, and you’ve got some serious economic activity happening where none existed before.

People who can afford to keep horses in China aren’t the types for slumming it. Glam and luxe must be intertwined with their equestrian and broader outdoor experiences. Otherwise, forget about appealing to this market segment.

The tourism accommodation offer in our region simply doesn’t meet the requirements of this significant niche market. There are problems with quality (4 star instead of 6 star), capacity (just not enough) and locality (accommodation needs to be near to the horses and riding/eventing facilities). If we’re to capture the equestrian luxe market then accommodation must invariably be located closer to where the horse action is. This isn’t rocket science.

The other reality is that if our city-region is serious about getting in on the Chinese tourism action, then having sufficient accommodation of the right standard is necessary to drive the business case for direct flights.

Daily direct flights is a US$50m a year consideration for an airline. To make a business case stack up, they need to be confident that there’s sufficient interest in a region from a consumer market to warrant the flights; and that the destination in question has the facilities to accommodate the new influx.

Feint of heart need not apply
None of this is for shrinking violets. To capture this market requires a boldness in public policy leadership that stretches the powers of imagination to their limits. The feint of heart need not apply. We need to apply new modes of design thinking to harmonise the scale requirements of this market with the traditional low-key nature of our rural pursuits.

If tourism is to be a big part of the region’s economic future – and there’s every indication that it must be, and can be – then developing niche competencies is critical if we’re to standout from the crowd. Equestrian luxe is one sub-niche within a broader niche of leisure and experiential luxe, and we’re ideally positioned to do something about it.

Are we up to grabbing the future? More to the point, to not do so is a luxury we simply cannot afford.

Written by: Warwick Powell
October 17, 2016
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Finally, a women's lifestyle magazine that covers all of North Queensland. Now in its thirteenth year, DUO is the elegant bi-monthly publication that features exclusive and insightful interviews with the amazing women of our region as well as the latest in home design, style and fashion, dining and recipes, travel and the arts.
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