Let’s have a look at the key trends in China’s tourist market for this year 2022.
Most Chinese want (dream) to travel oversea. The return of Chinese tourists is still unanswered in 2022 in an international destination. A new breed of Chinese tourists is choosing to explore the local culture.
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We might be still watching the strange case of the missing Chinese tourist unfold in different countries as more countries open their doors. This is helping to identify a new Chinese tourist whose domestic travel is increasing the country’s economic growth.
China has its borders closed and continues to follow a zero-Covid policy, even though the rest of the world is moving to an endemic approach to the virus. In 2022, however, the situation is quite different. While 150 million Chinese tourists traveled to foreign destinations in 2019 and spent approximately $255 billion, it’s not the same.
APAC is the favorite destination for Chinese Travelers.
McKinsey Consulting has released a report that predicts key trends for China’s tourism market by 2022. It shows that the desire to travel overseas has returned to pre-pandemic levels, with APAC leading the pack (24%). The most sought-after destinations overseas are Russia, Southeast Asia, Europe, and Japan.
Outbound travel is still far off, as China’s policy announcements continue to delay any international opening. China has now implemented a 14-day quarantine in China and a seven-day home quarantine for most areas. This is enough to stop any leisure travel from China. Steve Saxon, McKinsey & Co. partner, said that no one will choose leisure travel if they spend three weeks in quarantine.
Leisure Travel — The Last Priority
Saxon pointed out that, even if travel returns slowly, outbound leisure tourism would still be the top priority for the Chinese government. This contrasts sharply with the rest of the world, where travel restrictions are relaxed and leisure travelers are the first to travel.
The government does not currently issue passports. Saxon also stated that many Chinese tourists travel internationally with tour groups. This requires government approval. International business travel, as well as visiting family and friends, will all be possible once borders are open. Leisure travel will not be making a comeback.
While international travel is still attractive, recovery seems to be a long way away
Chinese tourists express an interest in traveling, both within China and internationally. Even though international travel is limited and most respondents still consider it unsafe, the survey continues to show strong interest in international destinations. The desire to travel overseas has returned to pre-pandemic levels, with APAC leading the pack (24%). The most sought-after destinations overseas are Russia, Southeast Asia, Europe, and Japan.
There are many factors that influence international travel plans. China’s recent policy announcements are causing delays in international opening. This will make it difficult for leisure travel to continue. The Chinese consumer is looking for zero COVID-19 cases when they travel internationally (86 percent of respondents rated this as a top three factor). This scenario is unlikely to happen as the world adjusts and faces new COVID-19 outbreaks. It looked like Hong Kong might be the next destination, considering its low COVID-19 case count. However, it is hard to predict the traffic impact and recent outbreaks add complexity to border reopening. The removal of quarantine from China upon return is the second most important factor.
The travel patterns of Macau show how COVID-19 and quarantine requirements can have an immediate effect on travel. The COVID-19 situation stabilized, and there were no new outbreaks in Macau or quarantine requirements for tourists from low-risk areas. This resulted in a 50% increase in tourists returning to Macau. Around 1,000 tourists visited Macau each day during the COVID-19 epidemics that occurred in Macau between late September and early Oct 2021. Around 1,000 tourists traveled to Macau each day during the COVID-19 outbreaks in Macau in late September and early October 2021.
These findings have important implications for travel companies, especially in the areas of loyalty, channel, and product.
There are changes in traveler preferences that may persist even during current restrictions. Travelers and consumers are adapting to changing circumstances. Confidence in domestic travel safety tends not to recover quickly after sporadic epidemics. Domestic travel is recovering, although it has seen a few dips as international travel remains restricted. Travel companies should consider new strategies in this environment, such as how they approach channels and products.
Create travel products that match Chinese consumer’s travel goals
To replace overseas travel, new domestic products have been created. Companies could look at ways to adapt product offerings to meet changing consumer travel needs. Survey results show that nearly half of respondents say they would choose to visit new attractions.
However, this is due to changing travel policies. 49 percent of respondents said that a short-haul visit to a new attraction is their top choice, followed by a longer-haul journey to discover a new destination. Respondents prefer longer trips to more exciting sites than shorter trips for revisits
New Chinese Travelers are different
Generation Z and Silver Generation are not the same, but they aren’t as distinct as one might expect.
According to the survey, Generation Z and Silver Generation have many commonalities in terms of travel destinations and key considerations. They also share similarities in how they book trips and where they get inspiration for their next trip.
While the Silver Generation and Generation Z have lower incomes than other groups, they are both important new segments of tourism. Generation Z is becoming the next traveler in the tourism market, and the Silver Generation is increasing their proportion due to China’s aging population and high travel frequency. Between 1990 and 2020, the percentage of Chinese citizens over 55 years old doubled.
The Silver Generation is the largest traveler segment. This generation (87%) traveled more than 60 percent of Generation Z in the last 1-3 months. This is the average travel rate for all age groups. It is 66% A larger percentage of Generation Z respondents had traveled within the last two weeks (94%) at the time of the survey. This is the highest percentage across all age groups, with the Silver Generation at 87% and the average across all age groups at 92%.
Both generations are embracing digital media as a source of inspiration for travel. However, the differences lie in the digital channels. Both Generation Z, as well as the Silver Generation, are drawn to digital ads and promotions. They also enjoy digital channels, including online travel forums and mobile ads.
Silver Generation is inspired more by local mobile ads (11 percent higher than average) and less by online videos (9 percent lower than average). Mafengwo is a local online travel forum that inspires this generation (16 percent more than the average).
Generation Z, on the other hand, is more affected by online video ads (13 percent more than the average for the group). This generation is less affected by local agency mobile ads (15 percent less than the average). Generation Z is significantly more influenced than the average generation by key opinion leaders and key opinion consumers (6%)
Both generations use the same booking channels. Official websites of local online travel agencies are their first choice. A third of Generation Z prefers to book a trip through an official website of a local travel agency. This is followed by 28 percent via mobile apps of local travel agencies and 20 percent via the official websites of hotel chains. Silver Generation: 40% prefer to book a trip through an official website of local online travel companies, followed by 23% using traditional travel agency stores and 21% booking through traditional travel agency customer hotlines. Online travel agencies are relatively rare (17 percent for hotel chains’ official websites and 14 percent for hotlines.
How travel agencies can adapt? Using local partners is the solution
Travel companies can adapt to the unique needs of these market segments by responding to their different ways of seeking inspiration and making bookings. Silver Generation is more open to travel forums for inspiration, while Generation Z prefers short videos. While the Silver Generation is open-minded to digital channels, they still value human interaction in booking travel.
Loyalty beyond loyalty programs:
Companies that travel may have the opportunity to build loyalty. Loyalty programs and brands may not be the defining factor. In making travel decisions, satisfaction and uniqueness will be more important than ever.
Survey results show that non-branded hotels are more popular than branded ones (56 percent nonbranded, 44 percent branded). Although branded hotels remain attractive, 40% of respondents prefer to stay in hotels and brands they have been to before. This loyalty is stronger among high-income, senior citizens, and those living in tier-1 cities.
Loyalty programs were effective in keeping high-income people or the Silver Generation. However, younger travelers prefer to experience over loyalty points or brands. Generation Z is more inclined to stay in local boutique hotels (5%) than the average group, but they are less likely to return to a place they’ve been to before.
There is a growing demand for boutique hotels in local areas and products that work with other companies to reach specific customer groups or provide unique experiences. 22% of the 56 percent who prefer not to stay at hotels are likely to choose boutique hotels with unique or local features.
Non-branded hotels are the most popular choice for respondents of all ages. These include boutique hotels and villas at the beach that offer an authentic experience in a foreign culture or B&Bs and homestays offering a local experience (Exhibit 6)
When China will travel back … the tourism industry can be happy
In 2017, Chinese tourists were more than 140 million over the world, and they spent USD265 billion on their travels. Only 10% of Chinese hold a passport but the number of China’s outbound tourists is increasing by 4.3% every year. In 2018, approximately 162 million outbound journeys of Chinese citizens were registered. In 2019, Chinese tourists spent about 254.6 billion U.S. dollars while traveling abroad. Nowadays, Chinese tourists are traveling differently, and new trends are emerging among these tourists.
The Chinese outbound tourism market
China’s global share of outbound travel, which was only 1% in 2005, will now be estimated at one-fifth of world travel by 2023. The rapid growth rate alone is no longer sufficient to explain the evolution of tourism in China, which is closely linked to the social changes that the country has experienced over the past decade.
The figure for Chinese citizens traveling abroad is expected to reach 192 million Chinese and their total expenditures will reach $458 billion. If outgoing Chinese tourism meets these expectations, this would be equivalent to almost 40% of the total market of outbound tourism for the Asia-Pacific region.
Chinese tourists often go abroad to popular tourist destinations such as Canada, France, the United States, the U.K., South Korea, and Japan. However, Chinese tourism has taken another turn, as the Chinese are now more attracted to destinations like Thailand, Cambodia, the Philippines, or Vietnam.
Top 10 Trends of Chinese Tourists
1. Travelling alone: FIT
There is a reduction in group travel to individual travel, as Chinese tourists are more in search of adventures and unique experiences. According to a survey, 70% of Chinese tourists plan to organize their own travel arrangements.
Moreover, Chinese tourists no longer want a tour guide. Indeed, 17% of them prefer making their own arrangements by preparing the trip and looking on the internet for advice. The new Chinese millennial generation is really complex, to attract this target you will need to use new tools.
They want a unique and amazing experience. Indeed, they want to show their travels to their friends and their family, and they expect you, a travel agency, to make it wonderful and unforgettable.
2. Chinese travelers are interested in local culture and food
A few years ago, Chinese tourists were mainly traveling within a group and tended to eat Chinese food. However, there is a shift in Chinese tourists’ attitudes and mentality, and they now are more and more conscious of local culture and food. Indeed, they want to try local culinary specialties, especially in countries such as France or Italy.
3. China Medical Outbound Tourism
Medical tourism is a global trend and is booming worldwide. Plastic and cosmetic surgery, as well as thermal cures, are the main medical travel purposes.
Many Chinese tourists are choosing countries providing lower-cost medical services, such as South Korea, Thailand, or Japan. These countries have already attracted tens of thousands of Chinese tourists by creating specialized medical services.
4. Getting married abroad – The lucrative Chinese Honey Moon Market
Weddings are very important in modern Chinese society and this is an occasion to show one’s happiness and social status to others. Chinese can spend a huge amount of money on their wedding, so going abroad to get married is a way to show wealth and financial success.
Consequently, the market for weddings and honeymoons abroad is booming in China. France considered the country of romance for Chinese people, is one of the main destinations chosen. Islands and exotic destinations have also been a huge success.
5. Retired Wealthy Chinese Want to travel the world
A recent survey by the National Committee on Aging shows that the number of elderly tourists in China accounted for more than 20% of the total number of tourists in the country, and this group has a stronger desire to travel than the average.
Retired people traveling abroad are more and more numerous and many travel agencies created specialized tours for retired and old people in order to meet their specific needs and expectations.
In this aspect, travel agencies still dominate: this channel of elderly tourism contributed about 70% of the flow of elderly tourists, and traditional travel agency stores are the most important sales channel, accounting for nearly 60%.
Marketing strategies to attract Chinese tourists
6. Video advertisement
The ratio of smartphone users in China has increased tremendously. In 2017, digital ad spending in China reached $40.42 bn, a 30% increase from the previous year’s spending. Ad spending in China is expected to reach over $80 bn by 2020.
The numbers speak for themselves, this is a lucrative arena in terms of spending and return on investment. Chinese people like to watch videos on smartphones and you can develop unique ideas to spread your brand awareness campaigns through effective video messages.
7. Social media: Because every Chinese is super Connected
China is the world’s largest connected country: more than 90% of Chinese people have an account on at least one Chinese social network.
WeChat, with more than 1.2 billion users registered, is the social media most used in China and, regardless of the size of your company, it is an essential medium to develop your marketing strategy in the country.
By promoting your company on social networks, you can build a community surrounding your company, reach your target, get feedback, and create a friendlier company image.
8. E-reputation: because the Chinese do not want to be scammed
Having a good reputation online is essential in China. Public Relations is one of the key points on which any digital marketing strategy should be based. More than attract Chinese travelers to your website, it is important to raise your company’s awareness and make it more visible to Chinese travelers by using online Public Relations.
Chinese internet users spend more than 40% of their spare time on the internet, therefore, you should favor online public relations.
9. SEO on Baidu: The MUST for Travel Players
SEO on Baidu is the key to the visibility of your company in China. Baidu is the most used search engine in China. It is currently ranked at position 4, in the Alexa Rankings among the most visited sites in the world.
Baidu now offers a wide range of services, such as web searches, image searches, music, forums, or a Q&A service. Key SEO strategies include keyword optimization, backlinks, and content sharing, this is the way to generate quality traffic. Compared with SEA, SEO takes more time, but it is a long-term solution in terms of developing a better e-reputation and is ultimately more stable.
10. Challenges and opportunities for Chinese tourism under the COVID-19
At the beginning of 2020, COVID-19 swept China and then the whole world, and it has had a huge impact on China’s and the global tourism industry. Under crisis and changes, challenges and opportunities coexist.
How to “survive” in response to the epidemic is the main theme of the tourism industry. At the same time, in the context of industry and consumption changes, the market is gestating major opportunities. Successfully capturing these development opportunities, companies are expected to take the lead in the market recovery and build a competitive advantage.
Companies still need to respond quickly to public opinions, and this is the best time for interaction with targets. For example, even when users are unable to travel due to the epidemic, Mafengwo – one of the largest tourism social media in China, still actively uses content and community to interact with its users. The platform has developed a wishing activity of “#the place to go after the epidemic”, users can write down the destination they want to travel to on the page and broadcast it in real-time.
In this way, businesses can enhance user stickiness and create leads. Once the frontiers are opened, those tourism companies who have already well-prepared during the epidemic can quickly respond to get those potential targets and work out appropriate traveling plans for their users.
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