Disconnect between luxury hotels and budget airlines

An article by Yeoh Siew Hoon about the Hospitality Sales and Marketing Association International (HSMAI) Asia Connect conference in Singapore late August is an interesting read. The piece points out the disconnect between the rise of budget airlines in Asia coinciding with the majority of hotel development in the Asia pipeline focused on the high-end market.

The article cites a statistic that low cost air carriers in Asia currently account for 26% of all air traffic in the region and this number is predicted to rise to over 50% in the next ten years.

At the same time the majority of hotel development among 1,871 hotels (421,331 rooms) in the Asian pipeline scheduled for opening in the next three to five years are luxury hotels (25%) and Upper Upscale (27%), Upscale (31%) and Midscale/Economy 19%.

The publicly available data from STR Global Asia Pacific pipeline for July 2012 is different from the statistics reported at the HSMAI conference and do not show the hotel chain scale market segment breakdown.

1,641 hotels with 375,917 rooms in July 2012 Pipeline (STR Global).

  • China 136,424 rooms
  • India 27,908 rooms
  • Indonesia 11,081 rooms
  • Thailand 8,361 rooms
  • Vietnam 7,102 rooms

Russia on a Budget (Airline)

This morning I saw an article in the Moscow News about EasyJet starting routes to Russia in 2013. EasyJet is the world’s second largest budget airline according to the report.

Russia, like China, is one of the hot spots for new hotel development. Most of the major global hotel chains are building more hotels outside the USA than within the USA over the past few years.

Is there a disconnect between the building of luxury and upper upscale hotels and the rising market share of budget airlines around the globe?

Do you as a traveler book luxury and upper upscale hotels after a budget airline economy flight?

Personally I fit this travel market demographic. I’ll suffer through an economy class flight, even a budget airline flight, when that saves the money to budget a better hotel experience.

I have long said I’ll suffer a 12 hour flight in economy to have a 5 night stay in a hotel suite.

Ideally a loyalty traveler can have both a premium cabin flight experience and a great hotel. But I prefer to put the majority of my budget into the experience of the vacation destination rather than focusing on the experience of getting to the location in a lie-flat bed when I find my budget and miles/points account balances will not accommodate both the premium flight experience and the premium hotel stay.

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Ric Garrido, writer and owner of Loyalty Traveler, shares news and views on hotels, hotel loyalty programs and vacation destinations for frequent guests. You can follow Loyalty Traveler on Twitter and Facebook and RSS feed.


About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined in 2008.

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  1. While most of the chain hotels are focused on the high end they are main solid independent hotels that provide solid accommodation at local mid range prices. I see an opportunity for local hotel chains to provide for market that is not covered by the big US/Named brand hotel groups like Gateway Hotel group or other like it.

    As for lost cost carriers and luxury hotel I know people who will take southwest and jet-blue and stay at expensive resorts without any hesitation, but then again budget airlines are better then full service airlines int he US.

  2. Count me in as one who flies economy but stays at five star hotels. Our family of four doesn’t mind a cramped flight if we know we’ll be pampered at our destination. Not worth the money to upgrade our flights!

  3. I am (as are the friends I vacation with) the opposite. We would prefer to fly business/first (or barring that, “premium economy”) and upon reaching our destination stay at a nice mid-level hotel. Personally, I find spending the extra money on a nice hotel to be wasted on me. When we touch down we are on the move, spending very little time in the hotel (sleep/shower is it) and most of our time exploring the new city.

    One exception of course: when the hotel IS the destination, like on a Safari or a secluded beach resort (Thailand/Maldives/Etc).

    Sometimes it feels like I spend more time on the plane getting to the destination than I do in the hotel at the destination.

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