Over the past seven years, the economic and social changes in China have been dramatic. Every year more and more Chinese residents travel overseas. In 2017, there were 130 million outbound tourists, 7 per cent more than in 2016 and 85 per cent more than in 2011, when Hotels.com first published its China International Travel Monitor (CITM).
In the latest 2018 edition of CITM, Hotels.com tells us Chinese travelers have benefited this year from a rebound in the Chinese economy and strong results from stock markets in mainland China and Hong Kong, putting more money in the pockets of Chinese travelers through increases in both salary and non-salary income.
In addition to having more to spend, travelers have increased the amount they spend on travel by 40 per cent this year, compared with last year. The increasingly influential millennials are spending unprecedented amounts on travel, with those born after 1990 increasing their travel spend by 80 per cent this year.
(In analyzing their responses, the researchers who prepared CITM divided travelers into four age categories, those born after 1960, 1970, 1980 and 1990, to provide further insight into the choices and preferences of different generations. Those born after 1980 and 1990 are referred to as millennials throughout the report.)
This year’s CITM reveals the far-reaching influence of the younger generation of Chinese travelers: Their growing sophistication and affluence is inspiring them to learn more about other cultures and to travel widely, leaving their footprint across the globe, from Latin America to Oceania and Europe to the Middle East. It is a trend with powerful momentum and next year will see millennials traveling even further afield. Some notes:
—These younger Chinese travelers are also inspiring their parents and other travelers born post 1960 and 1970 to do the same. The number of travelers wanting to travel independently instead of in group tours continues to rise, as does the demand for edgier, boutique styles of accommodation.
—The change over the past decade has been massive, with the per capita disposable income of Chinese urban households increasing by 164 per cent between 2007 and 2017. In the past year, there has been a rise of 8.3 per cent compared with the previous year. This follows a rise of 7.8 per cent in 2016 compared with 2015
—Overall income of the survey’s participants, the majority of whom (86 percent) come from Tier 1 and 2 cities, increased by 30 per cent this year compared with the previous year.
—The income of post 90s travelers in the survey increased by 73 per cent compared with the previous year. This is likely due to many of them entering the workforce upon completing their studies or moving up the pay scale after being in the workforce for several years. These travelers have used their increased income to travel further from home and stay abroad for longer.
—This year travelers extended their trips by an average of one to two extra days compared with the previous year.
—The trend towards long-haul destinations that emerged last year, has grown even stronger this year. Europe, North America, Latin America and Australia were favorite destinations over the past 12 months.
—In the next 12 months, only 49 per cent of travelers plan to travel to Asia. Instead, 60 per cent of Chinese travelers intend to travel to a country they haven’t yet visited.
—North America will continue to be a hot favorite, and Latin America is also emerging as a popular choice, with 26 and 13 per cent of travelers planning a first-time visit to these destinations in the next year, respectively.
Where Markets Could Do Better: The increase in education and income of Chinese travelers means greater demand for more authentic experiences in accommodation, services and activities.
CITM identified key areas where services could be improved. A standout area where Chinese travelers would like better service is payment methods such as payment by mobile phone and QR scan via WeChat.
Spending Power or Power Spending? The data show that:
—Chinese travelers are big spenders. In the past 12 months, Chinese travelers increased their spending by 40 per cent and next year the majority (60%) intend to spend even more.
—Millennials are driving this trend, spending big, seeking novelty, adventure and local flavor wherever they go, and influencing their parents to do the same.
—Millennials have upped their travel spend dramatically, by 73 per cent for those born post 90s and 50 per cent for post 80s. They also spent a larger proportion of their income on travel than other age groups—more than one third (36 percent) for post 90s compared with around a quarter (28 percent) for Chinese travelers overall.
—Post 80s millennials spent 5 per cent more of their income on travel compared with last year. They also spent the most each day when traveling –$346 (¥2204) per day vs $320 (¥2038) for Chinese travelers overall.
Loving Local: When it comes to spending choice, Chinese travelers want local flavor and colorful experiences. Gone are the days when most Chinese focused on their own cuisine when traveling. Tasting local delicacies was a favorite pastime for 69 percent of travelers in the last 12 months, followed by visiting local landmarks (65 percent). Shopping for authentic local items was also popular (43 percent).
The Quest for New Experiences: Chinese travelers want new experiences, not more of the old. They are traveling further afield, staying away longer and spending more money. This trend emerged last year and became even stronger over the past 12 months. Europe, North America and Australia were favorite destinations.
USA Shrinks in Popularity: Six of the top 10 countries where Chinese travelers feel most welcome are in Asia. Japan tops the list, moving up from the number two spot in 2017. Australia comes in fifth, slipping from third place last year. New Zealand in tenth place makes the top 10 for the first time.
Big on Bleisure: Bleisure—combining business travel with leisure—has also become more popular, with 80 per cent of travelers saying they would stay an extra four days after a business trip. This is particularly strong in long‑haul destinations such as Australia and the United States.
—The USA is the most common destination for bleisure.
—The common denominator is novelty. While Chinese travelers still want to visit Asia for the local cuisine (56 percent) and shopping (52 percent), there was a 6 percent decline in the amount visiting Asian destinations. When traveling to Asia they like to visit new cities.
“Out-of-the-Box” is the New Kid on the Block: Chinese travelers are not only looking for more out-of-the-box travel experiences, they are also broadening their accommodation choices. When asked what makes a great travel experience, 56 per cent of travelers said “living in atypical accommodation.”
Over the past 12 months, 68 per cent stayed in a hotel and 48 per cent stayed in a serviced apartment.
—The number of trips this year was 3.9, unchanged from last year but travelers are staying abroad longer. Millennials traveled slightly more, with 4 trips for post 90s and 4.2 for post 80s.
—Traveling further from home means longer trips. This year travelers increased the number of days per trip to 8-9 days, 1-2 days more than the previous year. They visited three cities per trip on average – one city more than last year.
—How long travelers stay is particularly influenced by the amount of annual leave they have (62 percent), the season (50 percent) and what sort of activity they are seeking (50 percent).
New and Improved: New and distant locations are also on the agenda for the next year. Asia is no longer the preferred destination, with only 49 per cent planning to travel there next year. Instead, 60 per cent of Chinese travelers intend to travel to a country they haven’t yet visited.
While new destinations are definitely the focus, more than one third (37 percent) of travelers still intend to visit countries they’ve been to before but will go to different cities. Key locations in Asia are top of the list for these travelers. Japan is the standout, with 46 per cent planning to revisit but traveling to different cities there. South Korea, Taiwan and Thailand are also high on the list.
Digital Dominates as Agencies Decline: Travelers continue to move away from traditional booking methods, preferring digital booking. The most popular booking method for accommodation is through the mobile website of an online travel agency, using a smart phone or tablet (43 percent). More than half of 90s millennials (51 percent) prefer this option versus 36 per cent for post 60s travelers. This is a slight increase on last year. Only 11 per cent of travelers prefer to use a desktop computer to book online.
Using mobile apps of online travel agencies is preferred by 13 per cent, while only 1 per cent book via social media platforms such as WeChat. Visiting a nearby travel agency is a thing of the past, with only 4 per cent of travelers choosing this option.
Notes on Methodology: The report is based on research involving Chinese international travelers, combined with proprietary data from Hotels.com and other research.
Hotels.com engaged Ipsos, a world leader in market research, to conduct interviews during May 2018 with 3,047 Chinese residents, aged 18-58 years, who had traveled overseas in the past 12 months. A computer-assisted web interviewing technology was used for the different-tiered cities.
Chinese cities are classified into different tiers based on population, economic size and political ranking. Tier 1 includes cities such as Beijing and Shanghai, Tier 2 provincial capitals such as Chengdu, Tier 3 medium-sized cities such as Zhuhai and Tier 4 smaller-sized cities.
Travelers were asked about their spending patterns, travel preferences, booking methods, accommodation choices and future plans, along with many other aspects of their travel.
Unless otherwise indicated, the ¥/$ exchange rate used in this survey is $1 = ¥ 6.37, the rate on 20 May 2018, the mid-point of the field research.