A Mixed Outlook for 2013 But Watch the Rise of the Affluent in China.
By Yeoh Siew Hoon
Tuesday, 25th December 2012
So assuming we all live past December 21, 2012, the big question on everyone's lips is, what will 2013 be like?

It'd be a no-brainer to say 'mixed' because that'd cover all eventualities. It'd also be no surprise to hear the word 'cautious'.

4Hoteliers Image LibraryPictured right: Shangri-La's Rasa Sentosa Reosrt and Spa, Singapore

At the CAPA World Aviation Summit in Hong Kong, I heard that word a lot – as Europe and the USA continue to struggle with economic problems, and overall growth in China and India slows down, the global picture remains murky.

The Middle East is one of the strong pockets with strong regional load factors and driven by the three carriers, Emirates, Qatar and Etihad, should yield good growth for the following year.

There are also other strong pockets in emerging markets like Indonesia, the Philippines, Brazil, Nigeria and albeit they are from smaller bases, the pace of growth is encouraging.

Home in on specific opportunities in specific markets and the picture gets even brighter, and it is clear the winners in 2013 will be those who take the right bets on the right markets and make the right play.

And one market where almost everyone will be going after will be the affluent segment in China. In its "Age of the Affluent" report, the Boston Consulting Group says that "at 120 million strong and with $590 billion (RMB 3.7 trillion) of buying power, the affluent class is not yet as large as the emerging and current middle class combined, nor does it have the same spending muscle. But it is growing fast."

By 2020, it projects that this segment will grow to 280 million, which will account for more than 30% of its urban population.

The report says that the spending of the affluent will grow fivefold to $3.1 trillion, about 35% China's total consumption and more than 5% of global consumption. It will also be nearly as much as Japan's total consumption, 28% greater than that of Germany, and three times more than South Korea's total consumption.

Two companies that have this segment clearly in their sights are Cathay Pacific and Shangri-La.

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