This week in the news, a British estate has become a hot spot for Chinese visitors, white collar Chinese millennials are driving international tourism spending, investors are buying up Bordeaux to slake China’s thirst for wine, Carnival expects China’s cruise market to reach 5 million people by 2020, and retailers are embracing the Chinese New Year.
Goodwood Estate dates back to the seventeenth century. Spanning almost 5,000 hectares, Goodwood has become one of the foremost sporting venues in the world, featuring an aerodrome and flying school, two 18-hole golf courses, and two major annual motor-racing events. Rolls-Royce is also headquartered on the property and manufactures cars there. The estate receives around 750,000 visitors annually, 500,000 of them to attend events, and generates around 70 million pounds ($106 million) of revenue each year. The estate has already becoming a popular weekend holiday and sporting venue for Chinese residents of Britain, and has also become a hot spot for tourists from China.
Chinese millennials have seen the benefits of economic reform and social stability, and with more disposable income and education than their elders, they are fueling luxury spending around the world. There are an estimated 300 million Chinese millennials — those born between the early 1980s and 2000 — and China’s investment in education has paid off. Nearly 25 percent of this demographic has attended university or another institute of higher education. With this education, these young Chinese are landing white-collar jobs, giving them more disposable income than their parents’ generation. That disposable income is increasingly going to travel. China’s millennials typically take four trips outside of the country per year, twice as many as their Asian peers.
China is the world’s fifth-largest wine market, and last year, Chinese became the world’s top consumers of red wine by drinking 1.865 billion bottles. To keep up with the demand, Chinese investors are investing in Bordeaux and other wine-growing areas in France. With packing millionaire James Zhou’s acquisition of Chateau Renon in Tabanac, Chinese investors now own 100 châteaux in Bordeaux. Bought for an undisclosed sum, the 18th century chateau came with 20 acres of vineyards and more than five hectares of park and garden land. Chinese investors spend an average of 10 million euros on these Bordeaux chateaux, generally favoring mid-range chateaux.
U.S. cruise company Carnival Corp. is going all out to woo Chinese travelers, having relocated its CEO to Shanghai, moved several ships to Asian routes, and announced plans to build ships in China. Carnival already boasts a 55 to 60 percent market share in China’s cruise industry, and by 2020, the company expects the market to be half the size of the the industry’s largest market, the United States. Since its beginning in 2006, the Chinese cruise industry has had explosive growth. In 2011, 87,000 Chinese went on a cruise. Last year, approximately 700,000 Chinese went on a cruise, and Carnival expects that number to top 1 million this year and over 5 million by 2020.
Last year, Chinese shoppers spent 200 billion yuan during the holiday through UnionPay cards alone. This marked an increase of 23 percent compared to 2013, and includes spending abroad. With the luxury spending slowdown in China that has already begun, and is expected to deepen in 2015, retailers are working harder than ever to attract Chinese shoppers for the Chinese New Year. Adidas, which has had a busy year expanding in China, has introduced product lines featuring both the goat and the sheep. In addition to apparel and shoes being branded with 羊, the character for sheep, Adidas is also releasing limited-edition Year of the Goat versions of its Superstar and D Rose 5 Boost sneakers.
image credit: jonathan