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China’s travel boom: What hotels are doing to prepare

August 1, 2017 1:00 pm


Even as the whole world worries about economic growth and other concerns, a new study seems to indicate that the people of the world’s most populous country continue to travel and spend with abandon.

A new report reveals that Chinese travellers are spending a whopping 28 per cent of their income on average on international travel, with millennials being the biggest spenders, allocating 35 per cent of their income to travel. On the contrary, Americans spend just 10 per cent of their annual income on vacations, according to a LearnVest study.

The sixth annual Chinese International Travel Monitor report by Hotels.com has found that Chinese travellers of all age groups are travelling internationally more often and for longer, with the number of trips and number of days per trip having increased in the past year from three trips to four and from five days to seven, respectively.

Travellers from the Asian country are also visiting multiple cities per trip, with more than 80 per cent saying they would not just stay in a single city.

China saw 122 million outbound tourists in 2016 – four per cent more than in 2015, according to the China National Tourism Administration.

Spending to grow

Despite many key indicators showing signs of a slowdown in the Chinese economy, the Hotels.com report found that spending on travel increased across all age brackets, with Chinese travellers spending $3,600 in the last 12 months – more than a quarter of their income – and up by 24 per cent compared to the previous year.

Abhiram Chowdhry, Vice President and Managing Director Asia Pacific and Latin America for Hotels.com, says the potential for growth in both the number of Chinese travellers and their spending power is enormous.

Looking ahead, Chinese travellers declared an intention to spend an average of ten per cent more on travel over the next 12 months.

Millennials planned to increase their spend the most, with approximately two-thirds of those born after the 1980s and 1990s saying they expect to spend more.

But are hotels doing enough?

The report identified that hotels are focusing their efforts on social media and marketing programs in a bid to attract Chinese travellers, though hotels say their investment in services for Chinese guests has decreased, with only four per cent of hotels spending more than $10,000 compared to 12 per cent last year.

The report identified obvious gaps in what hotels are providing compared to what Chinese guests want:

* Chinese payment facilities at hotels, such as UnionPay, rank second for consumers in importance, yet only 18 per cent of hotels currently offer these facilities. Indeed, only 18 per cent intend to offer them in the next 12 months.

* In-house Mandarin speaking staff was ranked number one by travellers but was low on the list for hoteliers, with only 17 per cent currently offering the service and 17 per cent planning to in the next 12 months.

* On-site Chinese restaurants were ranked fifth by travellers however only 7 per cent of hoteliers currently offer this service. Only 13 per cent intend to provide it in the next 12 months.

* Translated travel guides were ranked number four by travellers but are a low in priority for hoteliers; 18 per cent currently offering this and only 21 per cent planning to in the future.

Changing priorities

The report goes on to outline that the average daily spend by Chinese travellers also increased – up by eight per cent from 2016 – with dining, sightseeing and rest and relaxation activities proving most popular.

Interestingly, shopping dropped significantly in the to-do list, with only 33 per cent expressing an interest when 68 per cent of travellers did so in 2017. This essentially indicates the increasing diversification of Chinese travel activity preferences.

Chinese experience seekers have named the Middle East as a place they intend to travel to in the next five years, if their salaries were to double.

Although 82 per cent have visited APAC in the past 12 months, the report shows that Chinese tourists are becoming increasingly interested in long-haul trips to Europe and America.

The number of Chinese travellers visiting these destinations in the past 12 months increased by 25 per cent (Europe) and 11 per cent (America) compared to the previous year. These destinations were particularly popular with travellers born post the ’80s, with 42 per cent of them visiting Europe and 29 per cent visiting America in the past 12 months.

New markets

Looking ahead, Chinese travellers showed a desire to travel even further than before, with countries such as France, the USA, Canada and Germany leaping in popularity, in comparison to their rankings in 2016.

While still having a reasonably low occupation rate of Chinese guests, Latin America has seen strong growth in the past 12 months, with hoteliers observing a 21 per cent increase in Chinese guests.

“Our research has identified that China outbound tourism offers huge economic benefits to many countries across the globe. It’s therefore vital that hotels cater for Chinese travellers and develop innovative hotel services that tap into their enormous spending power,” says Chowdhry.

“Countries in South East Asia were also identified as markets that are expected to have significant increased outbound travel in the future. Acknowledging these burgeoning markets, in addition to providing varied services for the distinctive Chinese traveller personas, and will be important in the coming years,” he adds.

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By Mujeeb Rahman
Journalist
Mujeeb Rahman is a business journalist at AMEinfo. His areas of focus include economy, markets, politics and international relations in MENA and Asia-Pacific regions. An ex-BBC digital journalist, he delves deeper into the subjects that matter most.



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