China Tourism: What Marketers Need To Know

Fri, 06/27/2014 - 15:51
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Two Chinese tourists using a mobile phone

According to analysts, in fifteen years the Chinese middle class will reach 800 million, up from 300 million today. Over the next five years, affluent Chinese consumers will grow from four million to 20 million.

This has created a new wave of Chinese tourists: young, affluent and travelling independently. In the past Chinese tourists would travel in big group tours, visiting many sites over a few days, following a tour guide’s flag, all with matching red hats.

Today, more than 80% of Chinese travellers research and educate themselves about destinations and brands online. A third are now organising their own travel, spending more and staying longer in each of their destinations.

This new wave of Chinese tourists is sophisticated, knowledgeable, technology-savvy and young.

Nearly one in ten international tourists worldwide are now Chinese. But only around 5% of China’s population owns a passport, and most of those who travel go to Hong Kong or Macau.

The truth of the matter, though, is that 95% of Chinese tourists are unsatisfied with the current travel products and services available to them, both domestic and outbound.

 

China tourism

A deeper look at Chinese tourism in 2013 shows us that the total number of outbound tourists increased to 97.3 million people, up 17% compared with 2012.

In the past decade, domestic tourism has had a continuous increase of around 10% each year. International travel is expected to grow by 17% annually over the next decade.

The World Tourism Organization predicts there will be an annual increase of 43 million of international tourists to China over the next 20 years, and the number will soar to 1.8 billion by 2030. 

In 2013 Chinese citizens could visit just 44 other countries without a pre-arranged visa; Taiwanese citizens could visit 130, and Americans and Britons over 170.

China has increased the number of permitted overseas destinations for her citizens to 150 countries and regions. Popular outbound destinations include USA, Russia, France, Australia, Japan, South Korea, Malaysia, Singapore, Thailand and Maldives.

Places with visa-waiver schemes, like the Maldives, are really thriving: last year the number of Chinese visitors to the islands increased by 45% and reached nearly a third of the 1.1 million total.

Thailand saw the number of Chinese visitors triple after a blockbuster film, “Lost in Thailand”, inspired a generation to go and try Thai beer. 

Mauritius is hoping that “Five Minutes to Tomorrow”, a romance due out later this year featuring Liu Shishi, a popular actress, and partly filmed on the island, will bring it a similar proportion of new tourists.

America has started to interview Chinese visa-applicants online and allows them to pick up their visas at any of 900 bank branches, rather than the American embassy. It saw a 22% increase in Chinese visitors last year.

Canadian ski resorts are training Chinese instructors to help attract their share of the 5 million to 10 million Chinese practising the sport, up from just 10,000 in 1996.

 

Spending on holiday

But why do these countries want to attract Chinese tourists?

Chinese travellers spent US$129 billion in 2013, while making 97 million trips abroad, and are on pace to see 15% growth for 2014. In the same period American tourists spent US$86 billion.

Chinese spending on outbound tourism graph

The Economist

 

More than 80% of Chinese tourists say that shopping is vital to their plans, compared with 56% of Middle Eastern tourists and 48% of Russians. 

Schiphol airport, Amsterdam, has direct flights to seven Chinese cities. Around Chinese New Year airport staff hand out presents to Chinese arrivals and there is a free translation app to point Chinese travellers to its luxury shops, all of which accept Renminbi and Union Pay.

Harrods in London has 100 Union Pay terminals scattered throughout the store.

These two initiatives are just the start of how marketers are beginning to indulge Chinese outbound tourists. The other big area where marketers are starting to change strategy is in hotels.

 

Hotels

A recent report by Brand Karma showed that Chinese domestic travellers far prefer Chinese brand hotels over international brand hotels. For domestic Chinese travellers 48% either only consider or prefer Chinese hotel brands

The big US hotel chains such as Starwood, Hilton, Marriott, and InterContinental have announced initiatives specifically designed for Chinese tourists. These initiatives include adding popular Chinese dishes to full-service restaurant menus, featuring one or more Chinese television stations in the guestrooms, introducing guestroom amenities such as slippers and kettles, and having a front desk concierge who speaks fluent Mandarin.

But why are these big brands taking such big steps to appeal to Chinese travellers?

 

Social media reviews

In the last two and a half years, 42% of all global luxury hotel reviews were written by Chinese tourists. Chinese traveller reviews posted about hotels more than doubled in 2013 to 800,000. There was an overall growth in reviews in China, up 89% in 2013 alone.

88% of Chinese traveller reviews in 2013 were posted on online travel agency sites. The travel booking site Qunar’s review volume jumped 419% and its review share in China reached 5% in 2013, up from 2% in 2012.

Chinese tourists write more reviews than other tourists. And fellow Chinese travellers are guided by what they read on the web. The mobile revolution is impacting traveller reviews in China too: Chinese tourists increasingly post reviews from mobile phones, and that has led to a decline in the number of words per review.

Brand marketers must focus more than ever on cultivating and monitoring internet word-of-mouth on Chinese social media networks before, during, and after consumer interactions

 

What can marketers do?

China is still ‘an emerging economy’ with marketers still unsure of how to target these new consumers. Chinese consumers are at the forefront of tech and digital trends and are greatly increasing their use of the internet and mobile phones to research and purchase travel services.

90% of respondents to a 2011 Forbes survey, which was comprised of more than 300 China-based senior executives, said that digital and mobile marketing are a critical part of the mix for reaching Chinese consumers, especially the younger and affluent demographic.

618 million people or 46% of China’s population is now online. 81% of these people are mobile users. Since Chinese tourists use different search engines and social media platforms from the rest of the world, success largely depends on being blogged about on these networks.

Netizens have increasingly become inspired by social media, internet word of mouth, and traditional media to gain new experiences abroad. This has created a space for innovative marketers to thrive amongst consumers who respond to clever, modern marketing. 

Connecting with Chinese travellers through social media networks is what brand marketers need to do if they want these young, wealthy and open-minded consumers to use their brands when travelling abroad or domestically around China. 

Top image: from Chinese Tourists Flickr

 

Do you have any experience of dealing with Chinese travellers abroad or in China? I’d love to hear your experiences. Please share your thoughts…

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Comments

Good article. It is interesting to see that Chinese tourists are always changing and becoming younger where in the west they are becoming much older or retired.

That's a good point Gary. I have lots of Chinese friends who post a running commentary of their holidays on WeChat in places like Bali and the Philippines and other exotic such places. All have booked the holidays on their own and are in their 20s.

Visiting China would be so much fun with a tour guide!

Hi Dylan
 
Is this a service you currently provide? I'm happy to talk about your ideas in more detail. Just send me an email at misha@nanjingmarketinggroup.com

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