15 FEB. 2017
A New Generation of Chinese Tourists: What Should Hospitality Brands Know?
Corporate Branding Team, New York
The consensus has already been established that, in the travel and hospitality industry around the world, Chinese tourists are a major force to be reckoned with.
It begins with the fact that the number of tourists outbound from big cities in China is huge, while the potential tourist activity for people living in emerging cities of China is just as significant. More than 120 million outbound tourists from China traveled abroad in 2015. That number is still growing - 2016 saw the 100 million outbound tourist thresholds stomped in just the first three quarters.
China has “golden weeks” at the beginning and end of that year – that means seven day holidays, once during Chinese New Year in the winter and again during the National Day in the fall. During these vacations Chinese consumers often travel back to their home towns or abroad. 6.15 million Chinese tourists traveled outbound during the most recent CNY holiday – a further 7% increase from last year.
And remember, money talks. Chinese tourists are still spending money relatively freely in comparison to tourists from many other countries suffering from economic slowdown and uncertainty. Chinese tourists are the top spenders in the world, pouring out $215 billion in 2015. That number is expected to rise to $255 billion in 2025, which exceeds the annual economic output of many sovereignties.
Yet the dynamic of this Chinese goldmine is gradually shifting, in a way that requires travel and hospitality brands to take on more creative and innovative approaches to meet the ever-evolving Chinese appetite.
Let’s have a closer look at the important trends and how brands are already tapping into this important segment.
From Tourist Group to Individual and Small-group Travel
More and more younger Chinese tourists prefer travelling on their own or with a small group of family or friends, bypassing travel agencies and the hassle of being dragged around in larger tourists groups. That means more Chinese tourists will have full autonomy over their travel plans and routes, and on flights and hotel booking, which means these processes need to be catered to suit individual needs.
From Sightseeing to “My Experience”
The standard and generic tourist attractions are not as appealing to the younger Chinese travelers. They want something specific to their personal interests. They want to curate a customized experience for themselves - sports games and activities, headline exhibitions, music festivals, concerts, theaters, nightlife, etc. Thanks to this craving for uniqueness, countries that are not traditionally popular among Chinese tourists are also seeing a boom in visits. In Europe, smaller countries like Croatia, Iceland, Poland and Norway are seeing double-digit growth while the United States and Vietnam are the bright spots in their respective continents, according to a research conducted by the China Outbound Tourism Research Institute.
From Maps and Credit Cards to All Things Digital
Chinese wireless companies have already started to offer low-priced international data plans to their mobile phone users, which makes it even harder for the already digitally-savvy and open-minded Chinese tourists to put down their smart phones when travelling abroad. Checking the maps and travel plans, taking pictures and sharing them on social media are just baby steps. The key here is digital services like digital booking and payment, and social media engagement going forward. What is especially tricky is the fact that the Chinese digital ecosystem is almost entirely autonomous compared with the rest of the world. China-originated companies like Alibaba and Tencent dominate the market, and offer different platforms, interfaces and behaviors than commonplace international platforms like Expedia, Facebook and Apple Pay.
In a nutshell, the dynamic of Chinese tourists is shifting from big flocks of cliché shoppers to small groups of cultural and digital savvy individuals craving for unique and in-person experiences - from quantity to quality. And there are brands that are already channeling and keeping up with the shift.
Inside China - Thomas Cook as a Sports Expert
Thomas Cook is the oldest name in travel. But as a newcomer to China’s highly competitive travel booking market dominated by domestic players, Thomas Cook certainly has its challenge. Its market entry strategy focuses on Chinese tourists’ interest in sports, more specifically football, or as they say in the U.S., soccer.
Thomas Cook offers numerous travel packages bundling hotel bookings with tickets of football games of the three most popular European football leagues in China: F.A. Premier League of England, La Liga of Spain, and Serie A of Italy; plus the most prestigious European Champions League. On top of that, Thomas Cook positions itself as the sports expert by selecting the presumably hottest games of the season and using football nicknames adored by the fans in China in its product messaging, calling Arsenal vs Manchester United “The Gunners fighting the Red Devils” and branding Arsenal vs West Ham United as “East London Derby”. Packages with VIP seat tickets are also available for high-end Chinese football fans.
Other sports fans fear not. Packages for tennis, F1 racing and horse racing are also available or coming soon.
Outside China - The LINQ Hotel & Casino Creates Digital Accommodation Experience
The LINQ Hotel & Casino of Las Vegas has partnered with WeChat, the dominant cross-platform instant messaging service in China, to reveal the hotel room of the future, combining IoT and mobile-first functionality to create a seamless hotel room experience. Guests are able to control their lights, blinds and curtains, thermostats, door locks, smart plugs, and more using their smart phones by scanning a room-specific QR code using WeChat once they enter their room. Moreover, the user can personalize their experience by pre-programming several settings into a “scenario” – for example, users can pre-program the “Sleep” setting on WeChat so that once selected, the room automatically switches off the lights, closes the blinds and curtains and locks the door. So long, fumbling around for switches in the dark!
The LINQ has also introduced its very own robot concierge – Ben – which hotel guests can also interact with via WeChat. Ben will respond to guests in real-time via WeChat on any questions pertaining to hotel information and nearby restaurants, events, and show tickets.
Inside & Outside China - IHG Lets Chinese Pay the Chinese Way
IHG, the owner of InterContinental, Crowne Plaza and Holiday Inn, has signed a global partnership deal with Alipay, the third-party online payment platform developed by Alibaba, allowing Chinese guests to pay via Alipay through all of IHG’s online and mobile channels and across its full estate of hotels globally.
The partnership also includes the implementation of a popular digital credit rating system called Sesame Credit, which is a built-in function in the Alipay platform. Hotel guests with high Sesame Credit ratings will be able to make IHG bookings through Alibaba’s travel booking platform without paying a deposit.
In conclusion and in the spirit of new year, all travel and hospitality brands should ask themselves these three questions in 2017:
- What cultural interests of Chinese tourists can I leverage, and can be leveraged uniquely by me?
- What digital platforms used by Chinese tourists can I leverage that I haven’t leveraged yet?
- What is the next big thing in the development of Chinese tourists’ digital landscape?
A little hint, WeChat just launched a new feature that lets users access mobile services and apps without downloading individual apps. Dubbed Xiaochengxu, or “Little Program”, the feature enables users to access specific services provided by apps within WeChat, by either searching for the feature or scanning a QR code. As the details are still being unveiled and waiting for developers to further explore, “Little Program” is expected to have a big impact on the connection between online to offline functionality, as users can move seamlessly from registration to payment within WeChat itself.
In China, there is a saying called “the first person to eat a crab”, describing a person who is brave enough to take risks on something seemingly scary and dangerous. Boy, did that person find something delicious. In China’s digital age, a brand often stands out from the crowd when it innovates and does it right.