Is there still room for the Chinese market to grow? Is it even possible?
The short answer is yes.
The longer answer is that despite groundbreaking figures from Chinese outbound travellers in previous years, many reports still say that the market continues to grow, albeit a little slower in 2017.
As we enter 2017, growth of the Chinese outbound market continues. Mastercard's Future of Outbound Travel report indicated an average growth of 8.5% each year between 2016 and 2021. China's rising middle class, earning between US$10,000 and US$30,000, is said to spur outbound tourism in the coming years. McKinsey & Company predict that more than three quarters of the population will be considered middle class by 2022.
Cheaper and more frequent flights as well as the easing of visa restrictions is making it easier and more convenient for Chinese travellers to explore the world.
While 2016 saw a decline in Chinese travellers visiting Europe due to safety concerns, 2017 is expected to see much more growth. According to ForwardKeys, numerous bookings were made to popular destinations including Spain, which is also the fastest growing country for Chinese travellers, followed by the UK, Italy and France.
Here are some recent (and growing) trends about the market
1. Chinese travellers are adapting more "Western" travel habits
2017 will witness the Chinese market maturing, showing more interest in "living like locals" and travelling as a lifestyle.
"The desire of seasoned Chinese travellers to experience authenticity and nature is getting bigger," said Wolfgang Arlt, director of the China Outbound Tourism Research Institute, in an interview with China Daily. "Consequently, for many service providers and destinations, the easy harvest of low hanging fruit seems to have come to an end."
This means tour and activity operators need to start developing more sophisticated offerings for a more matured travel market.
2. Less shopping and more experiences
In ITB's World Travel Trends report, Professor Zhang Guangrui, a tourism expert and Honorary Director of the Tourism Research Centre of the Chinese Academy of Social Sciences, said that the "crazy" spending habits of Chinese travellers will slow down "maybe sooner than expected".
Previously, Chinese travellers shopped a lot during their trips abroad because of significant price differences, better product quality and design. On top of that, "some foreign trips targeted at the mass market were priced very cheaply but included “a shopping trap”, resulting in high spending levels. However, the government, working together with destination country authorities, has now cracked down on such unsustainably cheap tours to solve this problem."
Another reason for the decline in spending power abroad is the rising costs in housing and education, which will take a toll on the disposable income of the younger travellers.
Just like everyone else, Chinese travellers are becoming more interested in spending money on exquisite local food, wine and other unique cultural experiences, rather than on things.
3. Growth of independent Chinese travellers
More travellers want to go off-the-beaten-path and many are avoiding massive bus tours that only bring Chinese travellers to "top-sights" and shopping malls. As travel becomes more accessible for the Chinese market, expect more independent travellers to explore a destination in small groups, with family or friends.
Strategic partnerships between Baidu Maps (aka the Chinese version of Google Maps) and Nordic tourism boards will make it even easier for travellers to venture down less popular paths. The partnership aims to allow Chinese-language mapping services in Sweden, Finland, Norway and Denmark. And this is only the beginning.
4. Family travel is gaining momentum
Over the Lunar New Year that took place last weekend, there was not only a surge in outbound travel, but also family travel. "As of December 30, 2016, there was an 18% rise in bookings made by families of up to four members for travel during this holiday season compared to last year," according to Forbes.
Who's footing the bill? On one hand, we've got young and affluent professionals living abroad who are flying their relatives out to spend the holidays; on the other hand, we have travellers older than 55 years who are taking their families on holidays abroad.
"More and more families are also going on self-organised trips, looking for quality time for the whole family instead of enduring without the child the fast-paced sightseeing and shopping frenzy of mass market package tours," wrote Wolfgang Arlt for Forbes.
5. Skiing is becoming more popular in anticipation of the 2022 Winter Olympics
Now that they've won the bid to host the 2022 Winter Olympics, the Chinese government is encouraging more of its citizens to get involved in winter sports.
For snowy European and North American countries, this opportunity to attract more winter sports enthusiasts is one that should be approached with caution. While Canada has begun fuelling non-stop flights between Beijing and Calgary, its European counterparts are struggling to meet the new demands.
In a previous interview with Simon Bosshart, Director of APAC markets for Switzerland Tourism, he emphasised the need for local winter sports providers to streamline the entire research and booking process especially for novice and beginners. This is particularly true for companies who want to successfully work with the Chinese market.
Marketing to the Chinese traveller
The future for the Chinese market is pretty clear: it will become more segmented market with a lot diversity in travel habits. For 2017, we'll begin to see a clear distinction between first-timer travellers and matured travellers. As a tour or activity operator, it is up to you to decide who you want to cater to.
"However, it is important that foreign tourism marketers do not stereotype the Chinese market", said Alastair Morrison, former president of the International Tourism Studies Association and CEO of Belle Tourism International Consulting, based in Shanghai, in an interview with China Daily.
"Morrison said he thinks that there is a lot of labeling of Chinese tourists, such as pigeonholing a particular age group as all liking to shop and demanding to eat Chinese food all the time", continues the article. "I do not think foreign marketers should use stereotypes to portray the Chinese market in their advertising and promotion."
There is one key thing tour and activity operators can do to gain more business from the Chinese, and that is to translate your marketing materials into Mandarin. Bonus points if you can hire a Mandarin-speaking guide.
Finally, while many tourism boards are developing new products to satisfy the evolving desires of the Chinese market and to attract them to their destinations, Wolfgaing Arlt said that growth does not necessarily mean the number of arrivals. Instead, the number of overnight stays and how much each visitor spends is also important.
"Having fewer visitors who stay longer, spend more, have more interest in the country they are visiting is actually better and more sustainable than bringing crowds of package-tour, short-time visitors who look for the cheapest offer and do not really care about what they are taking photos of," says Arlt.
What do you think is the best way to reach the Chinese market? Let us know in the comments below.
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Written by Nicole Kow
Having graduated from the UK, Nicole travelled around Europe before joining TrekkSoft's marketing team. She is now based in KL and regularly blogs about her travels at Next Train Out.