How to succeed in the biggest outbound travel market in the world?
The corona crisis has proven one thing; today’s travel industry is heavily reliant on Chinese tourists. According to the United Nations World Trade Organization, Chinese tourists make about 150 million outbound trips, spending $277 billion on their travels abroad. That is almost one-fifth of the world’s total tourism spending. Chinese tourists like to spend on travel, what is also visible is their spending on shopping while travelling; they spend an average of $762 per person on shopping, while non-Chinese tourists only spend $486.
Adventure And Status Travelers
While most Europeans still prefer beach holidays, the Chinese adore adventure travel. Adventurous activities and ‘trying new things’ have become the most important reasons for people to travel. The preference for adventure travel is linked to the Chinese drive for entrepreneurship: “Expedition and entrepreneurship have similarities, such as extraordinary courage and dedication, not being afraid of difficulties and challenging oneself.” Status is a strong motivation for travel. Therefore, there is a strong interest in travel products that are unique and different; “Chinese luxury travelers, in particular, may seek “unique and exclusive” travel experiences that set them apart from other tourists.”
Key Trends In The Chinese Travel Market
Despite the size of the market and the recent negative impact of the Coronavirus, it is expected that Chinese outbound travel will continue to grow. Currently, around 10% of China’s 1.4 billion inhabitants travel internationally. By 2027, the number of passport holders is expected to reach 300 million, or 20% of the Chinese population. The number of potential customers in “second-tier” and “third-tier” cities are growing rapidly, pushing the need for travel companies to look beyond Beijing and Shanghai. For example, a high concentration of high-net-worth consumers can be found in Hangzhou and Chengdu’s cities. High-end tourists in second-tier cities have a strong willingness to travel, which means these source markets are expected to grow faster in the future.
Did Chinese customers in the past prefer shorter trips? There is a trend now towards more extended vacations. The number of tourists going on longer trips of 7 days or more reached 55.6%. Those traveling for 15 days and more reached 6.5%. High-end consumers prefer in-depth travel experiences, are more flexible, and have more time to travel.
Logically, “digital” plays a critical role before, during, and after Chinese travelers’ holidays. Affluent Chinese tourists will base many of their travel-related decisions on the reviews left by other travelers online. Chinese travelers are mostly heading to WeChat and user-generated content platforms such as Mafangwo and Fliggy to find information and inspiration.
What Makes Companies And Destinations Successful?
With the growth of adventure travel in China also comes an increase in concerns on safety. A study found that the biggest travel worries are traffic safety, with a noteworthy 42%, followed by natural disasters (25%), robbery and theft (22%), being ripped off (12%), dietary hygiene (11%), and travel facility safety (11%). Safety also comes up strongly in the overall needs and decision criteria of Chinese customers when selecting trips and providers. A survey shows that 56% of the respondents expressed that a given destination’s beauty and uniqueness for Chinese tourists is their primary consideration. In comparison, 47% stated that the safety of the destination would affect their travel choice. Another important aspect is the “visa friendliness” of destinations; 45% said they would consider the ease of visa procedures, and 35% felt that it is essential that the locals at the destination make them feel welcomed. The question of affordability is only the fifth highest priority, with 34% of respondents expressing concern for the costs. Focus on safety, experiences, easy visa processes, and feeling welcomed are essential components of any Chinese customers’ travel product.
Regarding travel time, it is good to learn that Chinese travel mainly around Chinese New Year and the Golden Week. Chinese New Year holidays usually take place at the beginning of February and the Golden Week break takes place each year over the first week of October, generally for eight days. Specific Chinese trips and departures around these periods could be trendy, especially if particular themes, festive activities, and dinners are included.
Another important aspect of Chinese travelers is mandarin language-operated trips and mandarin Chinese speaking guides. Just a few translators are good, but companies operating full mandarin programs are more successful. Anders Ellemann Kristensen, general manager for Albatros Expeditions in China, says, “The willingness to adapt products and working structures is critical. Also, regarding customer service, the Chinese consumer is very reliant on a fast reply, activities tailored for them and their food needs”. The relatively small Danish company Albatros Expeditions surprisingly became the market leader in the Chinese expedition cruise market by developing a full Chinese product, not just adapting their western concept. Popular activities off the ship are still photography, wildlife, and culture, but the ship’s activities are essential, such as karaoke, mahjong games, and dumplings making. Chinese guests like full active programs with not too many breaks. Or, as Kenneth Keng, president of Amazing Cruises and travel, summarizes, “the Chinese customer never gets tired, only gets bored.”
However, at the same time, companies need to be careful not to generalize when developing Chinese programs. As Prof. Dr. Wolfgang Georg Arlt (CEO of COTRI China Outbound Tourism Research Institute) states, “In a nutshell, success is based on the understanding that there is not “the” Chinese outbound tourist. There are many market segments with different needs, experiences, and expectations”. What is true for most Chinese is “Money rich, time-poor” and travelling to show off to their peers.”
Be Careful - What Are The Pitfalls?
Anders Ellemann Kristensen from Albatros is clear about the common mistakes of western companies when entering the Chinese market; “Forcing a concept on to the Chinese market. Many companies have tried to force their structures or product onto the Chinese market, and it never worked”. Amazing Cruises Kenneth Keng adds that “Chinese tourists would appreciate Chinese foods and language interpreters, but don’t get the wrong impression that they prefer 100% Chinese people on a trip. They would also enjoy mingling with international travelers”. Prof. Dr. Wolfgang Georg Arlt concludes, “Be careful not to underestimate their ability to compare and judge the quality of services offered or knowledge about a destination. And again, thinking that all Chinese are the same and have no special interests”. In China, there are more piano owners interested in Western classical music than in the rest of the world together”.