The Five Profiles of Chinese International Travelers

Hotels.com has completed its fifth annual survey of Chinese travelers and – among other insights – developed the five profiles of┬áChinese who plan to travel internationally in the coming year. While the resutls show that 92% of Chinese travelers plan to increase or maintain their travel spending in the coming year, the survey also five┬áprofiles of┬áChinese international travelers:

Five Profiles of Chinese International Travelers Revealed

To help the industry cope with these more independent and diverse travelers, the Chinese International Travel Monitor 2016 reveals five travel personas that Chinese travelers fall into.

1. Detailed explorers (25%): Born in the 60s and 70s, they are innovative and optimistic, like to learn and explore and to plan their trips down to the last detail.

2. Cautious connectors (25%): Also born in the 60s and 70s. They come from lower-tier cities and responsible family people and travel to bond with loved ones. They prefer safe, family-friendly hotels.

3. Experience seekers (17%): Tend to be born in the 80s and 90s and be from top-tier cities. They like stylish hotels and professional advice on local cultural activities. They travel to enrich their experience, being independent and ambitious.

4. Indulgers (12%): Most likely born in the 80s, they travel to indulge themselves and to demonstrate their power. They tend to stay at higher-star hotels and go on adventurous local tours.

5. Basic pleasure seekers (21%): Millennials born in the 90s. Unlike other groups, more of them are women than men. They are aesthetically minded and travel for non-material enjoyment, seeking value-for-money accommodation.

 

Chinese millennials spent 27 percent of their income on travel, according to survey data – the highest proportion among all Chinese travellers. The hoteliersÔÇÖ survey showed that the number of Chinese millennial guests (aged under 35) increased 12 percent, slightly more than the median increase of total Chinese guests (11 percent). This trend reflects the growing demand – and opportunity – for hospitality internationally.

The hidden opportunity behind "low hotel occupancy" in China

As hotel companies continue the unprecedented rush to develop properties in China, new analysis shows that the hotel occupancy rate in China to be among the lowest in Asia.

“Hotels in some markets of China are clearly oversupplied in the next three to five years, and they won’t be generating good returns,” said Nigel Summers, Hong Kong-based director at Horwath Asia Pacific, which tracks the hospitality industry. “China has had a very strong demand. The question is whether the increase in demand is going to be big enough to handle all the new hotels.”

Sixty-one percent occupancy is not a strong indicator, however it is must be taken in context. 

According to USA Today, China had 14,100 recognized hotels (those with at least one-star rating) in 2008, nearly double the 7,400 recognized hotels in 2001. By the end of 2012, the number of recognized hotels in China is expected to top 18,000. 

Given the rapid supply expansion and downward economic indicators, it's quite remarkable that the country was able to maintain its 61% occupancy rate so far in 2011 – flat to the previous year.

And therein lies the hidden opportunity behind the "low" hotel occupancy numbers in China.

Hoteliers were able to expand supply at a pace roughly equal to the increase in demand. In other words, expansion in China has done nothing to dilute the market. To the contrary, international brands are reporting 23% growth in RevPAR, with continued upward pressure on both occupancy and rate.

Despite the shock value of "low occupancy" headlining the Bloomberg News report, this RevPAR growth speaks volumes to the hidden opportunity presented by both international and domestic travel in China and why so many are bullish on China. 

 

 

 

 

The State of the Chinese Luxury Market

Affinity China has unveiled some amazing statistics in a recent study of the Chinese luxury consumer that point to not just the growth of the luxury sector in China, but also the global reach of the affluent Chinese. 

Among them:

  • The average age of the Chinese luxury consumer is 20 years younger than consumers in the US or Japan
  • In 2010 there were over 1 million millionaires in China, up from just 300,000 just four years before
  • In 2010, Chinese travelers made 57 million trips abroad. That number is expected to be 100 million by 2015
  • More than 50% of the luxury goods purchased by Chinese are bought while they are traveling overseas
  • On average, Chinese travelers spend $7,000 each when traveling

There are more fascinating factoids contained in this short video overview of the Chinese market. 

 

 

For more on Chinese luxury travel market, including how to target and host this growing demographic at your hotel, please read my previous post "Travel Trends for Chinese Millionaires". 

Travel Trends for China's Millionaires

The Hurun Research Institute has released The Chinese Luxury Travel White Paper, giving insight into the preferences of China's luxury consumers.

The study, which was created from one-on-one interviews with 463 Chinese millionaires and billionaires, sheds new light onto how the wealthiest Chinese make travel decisions.

I found several details to particularly interesting, including:

  • Chinese millionaires average 15 days of vacation annually, including three trips abroad. One-third will take more than 20 days of vacation per year and 20% will travel abroad five or more every year.
  • France is now the top travel destination, followed by the United State (which had been #1 in 2009 and 2010), Australia, Japan, and the Maldives. 
  • 4 out of 5 millionaires consider sending their children overseas for education, with the US, UK and Canada topping the list. 
  • 80% of Chinese millionaires prefer to travel on their own rather than with a tour group.
  • 57% of the ultra-wealthy make their own travel arrgangements using a travel agent or professional website.
  • Only 11% of Chinese millionaires book travel through a hotel website. 
  • When choosing where to stay, brand is the most important factor, followed by service, facilities, and location.
  • The preferred hotel brands of Chinese millionaires are Shangri-La, Hilton, Park Hyatt and The Ritz-Carlton. 

For US hotel companies seeking to gain a toe-hold in the Asian travel market, this study gives actionable insight in how to market to ultra-wealthy Chinese. 

For example, with such a large number of Chinese considering an overseas education for their children, do you think proximity to major universities would be a consideration for the guest? If so, do your professional travel agents have a list of area universities? Is this information detailed on the top-performing international travel websites? 

With such a high percentage of millionaires preferring to travel without a group, is your hotel prepared to host a single Chinese family? Without a group guide as a primary communicator for the guests, are your facilities and staff prepared to service a Chinese guest? For example, do you have community maps and guides printed in simplified Chinese? Are your restaurant and in-room dining menus availble in multiple languages? Do you provide multiple Mandarin television channels? Do you provide currency exhange services? 

I think this study is truly fasciniating. Hotels and brands that implement these insights in their service standards and marketing stand to gain marketshare in this rapidly emerging market.