For rich Indians, no pause button on spending
Tourism Australia has been running, for quite some time now, a sustained high-voltage ad campaign on prime-time TV, and the return on investment must have been stupendous. Here’s why: On an average, an Indian tourist spends Rs 3.37 lakh on his Australian holiday. That’s Rs 1 lakh more than what an average British or an American tourist spends.
“The rich have not been impacted by the slowdown. If they like, they buy," says Lalit Choudhary, director of Infinity Group, which imports luxury cars like BMW and Aston Martin. Choudhary should know, as he has sold 18 high-end Aston Martins this year, each priced above Rs 2 crore.
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There’s more. Apartments costing Rs 30-50 crore in an under-construction residential project in Mumbai’s Bandra-Kurla complex was snapped up within days of its launch. Similarly, the Lodha group’s 60-storey twin residential tower in central Mumbai has seen sales of 200 units since its launch. Each apartment costs Rs 3.3 crore.
Indians are indeed spending big on luxury cars, plush homes and taking more foreign trips than before. Kamal Khetan, managing director, Sunteck Realty, says: “Buyers are bullish about future prospects." That may be too sweeping a statement at a time when companies across sectors are seeing a demand slowdown, but the fact is India’s high net-worth individuals are still spending — and spending big.
For example, lifestyle luxury automotive brands like Rolls Royce, Lamborghini, Ferrari and Harley Davidson, some of which are even custom-made to a large extent, are witnessing no let-up in demand.
Rolls Royce, which sells the Ghost salon for Rs 3 crore and its flagship Phantom model for around Rs 4.5 crore, sees the potential to sell 130-150 cars per annum in the next three years in India. “We can never say that our brand is immune to slowdown. Yet, there always seems to be demand for super-luxury cars. Our recent announcements regarding dealership expansion indicate demand is healthy – coming not just from Tier-I metros but also Tier-II cities," says Herfried Hasenoehrl, general manager, emerging markets (Asia), Rolls-Royce Motor Cars.
A recent survey by Kotak Mahindra Bank and CRISIL on high net-worth individuals reveals that the number of ultra high net worth individuals (HNIs) is set to triple over five years and their total worth will grow five folds. As a class, ultra HNIs spend a significant portion of their overall expenditure on customised holiday packages, luxury watches, jewellery, diamonds and household electronics.
From castle stays in Europe and self drive tours in New Zealand , Indians are seeking luxury and indulgence in holidays too. Rising air fares or a weak rupee have not deterred demand, say travel planners. Executives from travel portal, MakeMyTrip, say there is demand for tours to Europe even in winters.
“Indian tourists are spending on luxury. A normal holiday package to South Africa costs above Rs 1 lakh but we have demand for customised holidays that cost over Rs 4 lakh. People want to experience hot-air balloon rides and shark-cage diving and are willing to pay for it," says Manjula Godia of Varun Worldwide Holidays.