20 Mar The Emergence of a New Chinese Traveler
For more than two decades, outbound travel from China was a major rising catalyst for global travel, an economic engine spurred by the emerging middle class in the country of 1.4 billion people. Chinese travel could be felt from Vancouver to Dubai to Singapore with destinations becoming reliant on the steady stream of easily spending tourists.
Accounting for almost one-fifth of global tourism spending, Chinese tourists spent $255 billion overseas and made 166 million overseas trips in 2019, according to the United Nations’ World Tourism Organization.
Between 2009 and 2019, the number of outbound Chinese tourists rose 12.8 percent a year on an average, compared to the global average of 5.1 percent.
Nothing seemed it could be a threat to that vibrant trend. That is, until the pandemic.
For three years, this drive force was eliminated from the global stage as China enforced strict, zero-Covid policies that put the country into lockdown.
China registered an average of around 12 million outbound air passengers per month in 2019, those numbers fell 95 percent during the Covid years.
Today, as China has opened up its borders finally, the world must prepare itself for a new kind of Chinese traveler, one that is more reticent and guarded, and certainly one that may not be as willing to hop on a plane and fly across the world as readily as in 2019.
Remember the archetypal Chinese tourists trooping behind a flag-wielding tour director at some world heritage site? Well, in 2023, they are an outdated cliché at best. Like most of the travel industry being forced to adapt to new norms after the pandemic, so too will it have to figure out ways to serve a new Chinese traveler.
“The Chinese outbound tourism market should not be seen as a monolith,” Cook observed.
Professor Wolfgang Arlt, CEO of Chinese Outbound Tourism Research Institute, too agreed that any answer to questions about defining “the” Chinese traveller would be wrong.
The key point, according to Arlt, is to understand that there are various types of travelers with different demands and behavior patterns.
How different? Arlt explained, “The 28-year-old foodie from Hangzhou may want to eat local food and do a cooking class, the couple with a 10-year-old kid from Shanghai may want educational activities, the affluent elderly couple from Beijing may opt for a wine tasting tour.”
A lot to decipher for destinations keen to tap into the once-largest outbound market in the world.
At the Skift Global Forum East in Dubai last year, Schubert Lou, chief operating officer of Trip.com had aptly said that earlier ways of marketing to Chinese travelers won’t work as well today as their preferences have changed during the pandemic.
Just how different would these be?
- How Destinations Can Approach The Change
According to Dragon Trail’s Cook, destinations that want to market themselves to Chinese tourists, need to understand the market segments they appeal to the most and the ones that they most want to attract.
“Being clear about both of these things will guide a successful marketing and product development strategy,” she said.
Travel service providers need to spend more time researching consumer behavior changes and ways to efficiently meet diverse needs, according to Fliggy’s Shi.
From a content perspective, destinations should also have a good idea of prevalent travel trends and how they are a good fit for these trends.
If trends are dictated by the information people have at hand, then it makes sense to understand how information-gathering has changed.
Citing China i2i Group’s survey results, CEO Alexander Glos said Chinese messaging platform WeChat is overwhelmingly the number one information source today, while earlier surveys would have typically showcased web and online travel agencies or just travel agents as being the single most important source.
Explaining how travelers are using WeChat and other social media platforms, Glos said consumers are not just getting information directly from travel suppliers, but also from platforms that share information from travelers who have been there, done that.
Arlt echoed the sentiment as he said people would rather prefer reviews from regular customers than from influencers.
“Spend more money on wow quality for your customers, so you can save money on marketing, as the satisfied customers will become your brand ambassador,” he explained.
And if wow quality is what destinations are looking for to attract Chinese tourists, Trip.com Group suggests putting more focus on visual content to inspire travelers.
While Dragon Trail noted that the approach towards marketing probably hasn’t changed substantially since the pandemic, Cook observed that a major development over the last three years has been the emergence of social media platform Xiaohongshu (aka Little Red Book aka Red) for travel inspiration and research.
2. Psyche of The Chinese Traveler
To understand the demand for travel coming from China, Glos said it also important to understand the Chinese traveler’s psyche.
“Travel is not just about exploring a particular place, but about living a lifestyle that is reflective of one’s financial success and maintaining the outward appearance of a successful lifestyle,” according to Glos.
With travel being symbolic of one’s professional and financial success, it is only logical that, as Glos predicts, high-end travelers are the likeliest candidates to return faster.
Trip.com Group too noted that the new Chinese traveler would like prefer customized travel products and experiences, as well as high-quality products that provide added value.
A sentiment echoed in Skift Research’s latest report, which states that luxury will be the key differentiator when comparing a potential 2023 recession to previous downturns.
“You can expect a segment that has very strong pent-up demand, spending power, but is also quite savvy in distinguishing what’s quality and good in travel choices,” said Jackey Yu, partner in McKinsey Hong Kong.
Yu’s prediction is based on the behavior of Chinese travelers who she said didn’t stop traveling in the last three years. “They had just stopped international travel. Domestically, consumers experienced new diversified tourism products emerging.”
Talking about a significant pent-up demand in China’s domestic travel market, a Trip.com Group spokesperson said, “Cross-provincial hotel bookings accounted for almost 70 percent of total domestic hotel bookings made on Ctrip over the lunar holiday period.”
Most Chinese would continue to travel within the region for reasons best known to all — faster, cheaper and more familiar, according to Arlt. “Long-haul travel would start around April-May depending on visa availability and affordable air tickets.”
Travel analytics firm ForwardKeys too noted that China’s intra-regional neighbors in Asia will reap the most significant benefits with the easing of travel restrictions, while it noticed a sharp upswing in bookings for domestic flights.
While Glos said there is enough pent-up demand in the China market to overcome any sensitivity to price increases, he also shared that the Chinese are smart travel consumers, who will look for value for money while spending.
An idea shared by Arlt, who expects spending to grow back slower, as people will be a bit more careful with their money.
Arlt expects Chinese outbound trips to hit 110 million by 2023, almost two-thirds of 2019’s 155 million trips. Next year is when he forecasts Chinese outbound trips to hit the 155 million-mark.