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The Changing Travel Habits of Chinese Tourists
The pandemic has forced an evolution in the travelling habits of Chinese tourists and businesses must adapt and innovate or be left behind, says CUHK expert
By Jaymee Ng, Principal Writer, China Business Knowledge@CUHK
Chinese tourists are a global force to be reckoned with. Before the pandemic dramatically curtailed international travel, tourists from the country accounted for more than a fifth of total global outbound travel spending, nearly twice as much as their second-ranked counterparts from the U.S.
The pandemic has brought with it significant changes in the travel habits of Chinese tourists, a highly significant segment of the global tourism market. In light of this, two questions stand out: Firstly, will Chinese tourists return in force to tourist destinations around the world and secondly, can the hotel and tourism industry as a whole adapt to the continuing evolution of this highly sophisticated and discerning customer segment?
“Chinese consumers have incredible spending power, which means that they only want to pay for the best products or services that they can get. Making sure diverse and interesting options are available to them is important.” – Mr. Larry Tchou
“During the pandemic, one of the things that we have seen is that Chinese tourists realised that travelling inside the country is just as interesting as visiting other countries. They used to take these domestic scenic spots for granted because they live so close to these places. It was always a case of ‘I’ll visit it another day’,” says Larry Tchou, Senior Advisor – Greater China for Hyatt Hotels & Resorts and Adjunct Professor in the School of Hotel and Tourism Management at The Chinese University of Hong Kong (CUHK) Business School, noting the flourishing of the domestic Chinese tourism sector as a result of the pandemic.
Among the several new trends being observed among Chinese domestic travellers is that shorter trips, especially to tourist spots around the cities that they reside in and can drive to, are now preferred as a result of the pandemic. State media Xinhua News reported that the ticket sales for domestic scenic spots rose 168 percent during the Spring Festival holiday during February, compared with the week before.
The need for family travel is also on the rise, according to the data released by Beijing-based consultancy firm BDR. The data showed that 38.6 percent of interviewees chose to travel for family purposes and 67.2 percent of interviewees travelled with family during the first half of 2020.
Perhaps due to social-distancing purposes and the urge for clean air, Chinese people are now more interested in visiting remote areas, such as mountainous regions to enjoy the beauty of nature. Chengdu, the home to the famous Giant Panda Breeding Base in China’s Sichuan province, ranked as the most travelled city in China in the first half of 2020, the same BDR report shows.
“Covid has also magnified the importance of family and connecting with loved ones. Nowadays, people travel when they want to travel, for leisure and for a good family time,” Mr. Tchou comments. As one of the first employees of Hyatt in Asia, Mr. Tchou played a significant role in introducing Hyatt into mainland China.
Based on these ongoing trends, Mr. Tchou thinks that hotels would need to reconsider their configuration to cater for the rising needs of family travel. For example, hotels may need to design three-bedroom suites that allow families to get together or incorporate more child-friendly facilities and cuisine.
A New Shopping Paradise
While Chinese tourists are famed for their propensity to “shop until they drop” – especially when holidaying abroad, in recent years the country has been seeking to cultivate its island province of Hainan as a domestic alternative to traditional shopping destinations the likes of Paris, Milan or even Hong Kong.
This plan was dramatically stepped up when a new offshore duty-free policy came into effect on July 2020, which more than tripled the duty-free quota from 30,000 Chinese yuan to 100,000 yuan. The effects of this new policy has been immediate, and according to Hainan Free Trade Port authorities, 4.6 million visits were made to the island during the Spring Festival holiday, creating a total tourism income of 5.82 billion yuan. Hainan’s duty-free shops made sales of 1.5 billion yuan in the seven-day holiday.
Mr. Tchou notes that luxury brands have started shifting their focus from other markets to mainland China by opening more stores there long before the rise of Hainan. For instance, store numbers for luxury retail brands in China increased by four percent in the first half of 2020 and those for cosmetic brands rose by eight percent, a report by property consultancy firm Savills reveals.
“As Hainan is thriving due to its strong tourism appeal and duty free status, perhaps in the future, China may consider opening more duty-free markets in the country” Mr. Tchou comments.
The Influence of Social Media
Not only are Chinese tourists for now straying closer to home, but there have also been significant changes in how they decide whether to travel and where to go. Social media is becoming increasingly important in the search for the “perfect” getaway. Travel demand is now being induced by content, often by the posts shared by key opinion leaders (KOL) or key opinion consumers (KOC).
The best performing social media platform for Chinese tourists for making travel decisions is currently Xiaohongshu. The app was created in 2014 and it currently has more than 100 million monthly active users. Through short videos, pictures and notes, users are encouraged to leave honest reviews on products that they have used or places that they have been. It has become the most trusted content sharing platform in China and strongly influences consumer decision-making.
When it comes to digital marketing and promotion through social media platforms in China, Mr. Tchou says that Chinese consumers are nowadays bombarded by new products and services. The key for brands is how to differentiate your experience.
“Think about bubble tea. There was only one type but now there are over 50 types of bubble tea. The fierce competition forces you to innovate and differentiate. If you can be creative, then you will be able to grab market share. But if you can’t, then you’ll be left behind,” Mr. Tchou comments. “For the hotel industry, we still have a lot to catch up. We must learn from social media platforms to find out what the masses want.”
Return to a ‘New’ Normal
Although the ongoing pandemic has made travelling abroad more difficult than ever, Mr. Tchou thinks that eventually, people will get used to the additional health precautions, just as they have adjusted to increased security at airports in recent years. He notes that although Chinese tourists seem to be content with travelling inside the country for now, this does not mean that they would be less likely to travel abroad in the future. What is important for the tourism and catering industry worldwide is for them to understand the evolving Chinese tourist needs.
“For example, breakfast is very important for Chinese tourists. We learnt the hard way that serving only congee and noodles for breakfast is not acceptable,” Mr. Tchou laughs. “We must constantly remind ourselves that this is a group of very sophisticated and discerning customers. Tech-savvy Chinese consumers have incredible spending power, which means that they only want to pay for the best products or services that they can get. So making sure diverse and interesting options are available to them is important.”