According to the Tourist Research Center of the Chinese Academy of Social Sciences, Chinese tourists have the title of “world’s biggest-spending travelers” since 2012. “Chinese tourists spend so much abroad that some foreigners are calling us the ‘walking wallets’,” said Song Rui, director of the center.
Perhaps this may be a shocking statistic to some: by 2030, 49 percent of all global passenger traffic will be within the Asia-Pacific region or between the region and the rest of the world. The news comes from a study conducted by Boston Consulting Group and TripAdvisor. The study suggests that over 50 percent of the growth in global traffic will come from the Asia-Pacific region, due in part to burgeoning incomes (over a billion people in Asia will have annual earnings of $15,000 or more). These “next billion” travelers will come from China, India, Indonesia, Japan, and South Korea.
Forty percent of Asian outbound (international) travelers by 2030 will come from China specifically, at which point they will probably overtake the United States as the world’s largest domestic travel market. Between 2012 and 2030, the Chinese outbound travel market will grow at an annual rate of about 11 percent.
Tnooz reported that marketers looking to pursue Chinese travelers need to be strategic.
Pursue the right demographics
The Chinese market is too big and too diverse – a single strategy will never work for everyone. Follow the segments that show the most potential for growth: young affluents (ages 18 to 30), senior professionals (ages 45 to 55, traveling without an organized tour group), and small groups of families and friends (ages 30 to 45, also traveling without an organized tour group). By 2030, those segments combined will account for 100 million annual trips and $340 billion in annual spending.
Consider which destinations will be popular
In July and August 2013, travelers who visited TripAdvisor China’s official site were busy researching very particular outbound destinations. Data from the site reveals that 12 percent researched Hong Kong and Macau, 44 percent researched other Asian destinations, and 44 percent researched destinations outside of Asia. The most frequently searched destinations were the old favorites – London, Paris, and New York – but young and prosperous Chinese are seeking out adventures. Outliers like Nairobi and the Serengeti National Park are becoming more attractive to youthful travelers looking for a long-haul excursion.
Look beyond first-tier cities for clientele
More than 80 percent of China’s middle-class and affluent consumer (MAC) population live far from Beijing and Shanghai. Rizhao in Shandong province, Huzhou in Zhejiang, and Xinxiang in Henan will each have MAC populations of greater than 500,000 by 2020. Companies looking beyond big cities will have to adapt their strategies, business models, and marketing, but they will have first-mover advantages in these areas.
Cater to Chinese preferences
In BCG’s 2013 survey, young affluent travelers indicated that they fly significantly more with Chinese carriers today but are likely to increase their use of international carriers. The top booking considerations were price, safety record, and seat comfort. The biggest deterrents were flight delays, inconvenient departure times, and uncomfortable seats. Similarly, the top three criteria for choosing hotels are location, cleanliness, and price. TripAdvisor found that both business and leisure travelers alike prioritize location and reputation of hotels. Accepting payment via China Union Pay is also a plus.
Creativity, personality, and perseverance are key
Good brand management is pivotal to success in China, particularly, balancing the image of a global brand with local appeal when many global brands are unfamiliar in China. While social media, mobile technology, and celebrity endorsements are all boosting sales, Chinese consumers still trust recommendations from people they know and online reviews above corporate marketing messages. But reaching consumers where they are won’t be easy with China’s many legal and regulatory constraints. Reputation is important at many levels, and should be a prime consideration when forming partnerships with others.
In 2012, Chinese urban travelers took about 500 million domestic and outbound trips (not counting day trips). They spent about $260 billion to do so. By 2030, it is estimated that they will take 1.7 billion trips at a cost of $1.8 trillion.
photo credit: angie torres/flickr