The tourism industry in China developed itself at a fast path but trends are changing. China represents the most important market for outbound travel in terms of population and travel spending. It is important for brands to understand the opportunity of China’s tourism market. Here is a summary of tourism trends of 2018 followed by what trends will be this year.
A summary of 2018
China, the world’s largest outbound tourism market
China is a country full of opportunities. The tourism industry is relatively young but very attractive. With a total population accounting for more than 1.4 billion Chinese in January 2019, China has the world’s largest outbound tourism market. Indeed, more than 71 million Chinese tourists realized an outbound trip in the first half of 2018, 15 percent more than the previous year. This phenomenon is due to different factors. The first one being rising disposable incomes. The middle-class has the means to travel outside China. The second one is an increase in online information with a content of quality. Before selecting a destination, Chinese consumers go online to research for travel information. They mainly go on online travel agencies such as Trip.com and Qunar. They also go on social media and identify where KOLs recently went. Word-of-mouth and recommendations from friends are the most favored source of information of Chinese tourists. The third factor would be friendlier visa policies from foreign governments. With these facts into account, the number of outbound trips is supposed to reach 160 million by 2020.
China, the world’s largest outbound tourism spending
China’s travelers have money and they are not scared to spend it. With 288 billion dollars spent worldwide in 2018, Chinese tourists’ spending represents a quarter of global tourism spending. They usually spend a total of 2000 dollars per trip. This number includes flights and accommodation.
However, a 14 percent drop in travel spending is witnessed. Spending per trip may be decreasing but with the number of tourists growing, overall travel spending should stay constant. Chinese tourists represent the highest spending among global international travelers.
Chinese tourists, a segmented market
The tourism industry in China started with the trend of tour-groups. As Chinese tourist explore the world, their needs are changing. Wealthy Chinese were the first ones to travel. Their consumption preferences went from tour-group to independent trips.
Nowadays, Chinese with less mean are also starting to travel. These two different segments are generating growth in both tour-group and independent tourists. Each consumer behavior is different. Some can be shoppers, culture enthusiasts, landmark hunters, escapists or even adventure-seekers.
What to expect in 2019?
Exotic destinations: the first choice of young travelers
Chinese tourists used to travel in countries not too far away from their homeland. Flights were an average of four hours among outbound Chinese tourists. However, younger generations such as the generation Z or post-90s (born between 1990 and 1999), are traveling more and more. Qualifying themselves as relatively independent and curious, they are looking for an unforgettable traveling niche experience. In order to do so, they are ready to travel a longer distance to find the perfect exotic destination.
Alibaba’s online travel platform, Fliggy, saw a change in its booking destination in 2018. According to its numbers, Azerbaijan, Serbia, The Vatican, Georgia, Croatia, Portugal, Turkey, Ethiopia, Brazil and Peru generated the highest booking growth rates of 2018. This growth in these destinations is in part due to the fact that Chinese tourists like to follow their friends and KOLs recommendations. When a new destination is trendy on social media, a surge in bookings appears. Younger generations revealed their top dream destinations:
- South Korea
- North Mariana Islands
As these trips are further away from home, Chinese outbound tourists’ spending will likely increase.
Increasing diversity among outbound tourits
China has four major cities also called first tier cities. They are Beijing (the capital of China), Shanghai (the biggest city of China), Guangzhou and Shenzhen. They cover the wealthiest population of China thus, highest number of outbound travelers. To give an idea of the importance of this number, we can look at the 2018 figures of China’s National Holiday. They pointed out that 74 percent of outbound tourists during this period were from these four cities.
“New First Tier Cities” is a recent expression used to describe Chinese cities with a rapid urban development. They regroup 14 cities dispersed in 10 provinces and 2 municipalities. They include Hangzhou, Nanjing, Ningbo, Suzhou and Wuxi, all located only a few hours away from Shanghai. The others are: Changsha, Chengdu, Chongqing, Qingdao, Shenyang, Tianjin, Wuhan, Xi’an, and Zhenzhou. Some argue that Dongguan is part of the “New First Tier Cities” which would make 15 of them. To keep the example of last year National Holiday, 17 percent of Chinese outbound tourists came from “New First Tier Cities”.
Even though first-tier cities contain the highest number of passport holders, more and more tourists are rising from “New First Tier Cities”. Their number is growing rapidly highlighting a 3-digit growth. For example, the number of outbound tourists from Xi’an saw an increase of 288 percent from 2017 to 2018. With Chinese outbound tourists concentrated in firsttier and new first-tier cities, companies can target travelers more easily. Furthermore, since targets are geographically concentrated, adapting marketing strategies is also easier. This represent a big change for marketers who have a larger market to reach.
Higher spending from middle aged and senior travelers
Chinese millennials tend to take all the attention. We often forgot people born during the 1960s and the 1970s. However, their impact on the tourism industry is significant. Indeed, they represent 46 percent of China’s total outbound tourists. Furthermore, they spend as much as their younger peers. Indeed, Chinese travelers spend an average of 2040 yuan per day (320 dollars). The post-90s, spend an average of 2000 yuan (314 dollars) which is exactly the same as the post-60s.
As China’s population is getting older, the number of middle-aged and senior travelers increase. Their important number is in part due to the retirement age in China. Depending on their gender and line of work, Chinese people can retire at the age of 50 or 55 years old. Furthermore, middle-aged Chinese and seniors are not bothered by mortgages or credit card debts. All these factors provide an ideal situation for an increase in spending.
How to benefit from 2019’s trends?
Cooperate with Chinese travel websites
Chinese travelers like to go on travel websites to book their flight ticket and accommodation as they can compare prices and review comments. They rarely go on the airline website to realize their purchase decision. The three most famous travel websites are namely Trip.com, 12306.cn, and mafengwo.cn.
Trip.com, previously named Ctrip, was founded in 1999 and had a total of 80 million visits in August 2018. It is China’s most famous and most used travel platform. 12306.cn recorded 14 million visits at the same period last year and Mafengwo.cn 25 million.
These numbers show that Chinese travel websites have an important amount of data generated each day. They can help your firm find customers that fit your brand positioning by doing an analysis of these data. Furthermore, you can also use these websites as a way to advertise your brand. Spreading brand image on these websites is efficient but costly and complicated for foreign companies facing a rude competition from their Chinese counterparts.
Optimize your SEO on Baidu
Baidu can be compared to Google. It is China’s main search engine with 90 percent of potential buyers starting their research on the platform. When it comes to traveling, Chinese people are deeply involved in their research. They start their research process by typing keywords in Baidu’s search bar.
It is important for your company to be present on Baidu as a significant percentage of traffic to travel websites comes from Baidu search engine. For example, 63 percent of the traffic on Trip.com comes from Baidu search engine. This number is 49 percent for 12306.cn and 71 percent for mafengwo.cn.
Find a relevant KOL on social media
If Chinese people go on Baidu to research tickets and flights, they find their destination on social media. Indeed, Chinese travelers are deeply influenced by their friends’ recommendations but also by the KOLs they are following. A lot of trust is given in KOLs’ opinions.
Finding a KOL that fit your brand positioning is important. He will advertise your message, write good quality content about your brand and answer actively followers’ questions. Xiaohongshu.com, translated as the little red book, is a Chinese social media and e-commerce platform. With 150 million registered users and 50 million of them monthly active, this platform proposes numerous travel blogs and lifestyle stories from celebrities and influencers. Readers usually follow their path and reserve the same accommodation.
GENTLEMEN MARKETING AGENCY
Gentlemen Marketing Agency is a digital marketing agency based in Shanghai. We are specialized in developing marketing strategies for companies seeking to establish or strengthen their presence in China. If you are looking for marketing advice related to tourism in China, do not hesitate to contact us.