Where Chinese travellers spend, what they expect

HOTELS are increasingly aware of both the spending power of Chinese travellers and their expectations – 37 per cent of the wealthiest travellers nominate Australia at the top of their wish-list . . .

AFFLUENT Chinese tourists are forecast to spend US$264 billion annually by 2019 – an amount just a few billion dollars shy of the gross domestic product of a small developed country like Singapore.
According to a forecast by Bank of America Merrill Lynch, some 174 million Chinese are expected to travel abroad in 2019, mostly for leisure.  Last year, 107 million Chinese went overseas for holiday – up from 93 million the previous year.
The significance of this large group of travellers and the impact they will have on the global travel industry form the highlights of the latest Hotels.com Chinese International Travel Monitor (CITM).
The global hotel booking website surveyed more than 3,000 Chinese international travellers and 1,500 hoteliers from around the world.
Katherine Cole, Regional Director Australia, New Zealand & Singapore for the Hotels.com brand, says hotels are increasingly aware of the spending power of Chinese travellers, with 61 per cent of the hotels surveyed saying they have seen an increase in the number of Chinese guests.
The monitor highlights three key groups of Chinese travellers — the millennials, who are tech-savvy and travel independently, the top 10 per cent spenders, and top five per cent spenders. The number of Chinese millennials taking overseas trips has risen, with 59 per cent of hoteliers surveyed saying they have seen a rise in Chinese guests aged 35 and younger over the past year.
The trend is especially strong in the Asia Pacific region, where 78 per cent of hotels surveyed experienced an increased presence of this group of tourists, who tend to be independent travellers.
The average spend of the Chinese millenials is US$536 a day on accommodation, food, shopping and entertainment. The monitor notes that younger travellers prefer “independent hotels with local flavour”.
Of the top 10 per cent spenders, the monitor found that each spent an average RMB13,800 (US$2,225) a day when travelling. They seek out a comfortable hotel, spending an average US$439 a night on accommodation alone.
The ultra rich of China, who make up the top five per cent of Chinese tourists, spend an average of US$3,368 a day, including US$575 a night on hotels.  They are likely to stay in international chain and five-star hotels.
A large slice of the spend by the Chinese ultra-rich goes to shopping — in fact, the list of favourite activities when travelling abroad is similar for both the top five per cent and the top 10 per cent of Chinese travellers.
The findings reveal the growing financial muscle of China’s wealthiest consumers, who make a disproportionatelly high contribution to the travel economy. What’s more, 47 per cent of this group of Chinese travellers indicate that they intend to spend more on dining and food while travelling in future, while 50 per cent intend to spend more on entertainment and other such activities.
The CITM results indicate that China’s international travellers, as a whole are still among the wealthiest in their home country, with an average annual household income of US$69,908 this year — up from US$40,000 last year. The comparison in the disposable incomes of these travellers with the annual US$1,000 average per capita income of Chinese households is stark.
The survey shows that the annual income of the top 10 per cent is US$104,810, and that the top five per cent earn US$116,285. As would be expected, almost two-thirds of the top 10 per cent live in the bigger Tier 1 cities of Beijing, Guangzhou, Shanghai and Shenszen.
Among the wealthiest travellers, 37 per cent nominated Australia at the top of their wishlist, followed by France (27 per cent) and the United States (22 per cent).  Perhaps not coincidentally, the largest number of foreign investors in Australian residential real estate are Chinese.
The survey also shows that Chinese travellers like hotels with Chinese-speaking staff, free wifi and tea and coffee-making facilities.
InterContinental Hotels launched its Zhou Dao programme this year aimed at making Chinese travellers feel more at home, with
Chinese-speaking staff at the front desk and acceptance of China Union Pay credit cards. IHG also provides a Chinese welcome pack, Chinese TV channels, free wifi, Chinese tea and a variety of Chinese food and beverage options.
Nearly 100 IHG hotels, including those in Australia, are already participating in the programme, and, by the end of this year, the number is expected to more than double to 250 hotels.  In Australia, Accor has introduced a number of new services, including translation of welcome kits, menus and business cards, and Chinese meals and Chinese utensils in restaurants. Cole says Chinese travellers rank free wifi as a key “must-have” for a hotel.
She says the survey found that 92 per cent of travellers use the internet to stay connected with friends and family, and that 97 per cent of hotels in Asia Pacific (except perhaps for Australia) offer free wifi. The top destinations for Chinese tourists are the 52 countries which offer Chinese visa-free entry.
Air services are another important factor in attracting Chinese travellers. Under a new air services agreement, Australian and Chinese airlines will be able to triple their services between three major Australia gateway cities and Beijing, Shanghai and Guangzhou.
Budget carrier Jetstar recently started operating direct flights from Wuhan to the Gold Coast, with two flights a week providing seats for about 70,000 additional travellers a year.
A growing number of Chinese book their travel and accommodation online, and fewer Chinese now use travel agents to book their trips. Customers are able to use Alipay as one of the payment options on Hotels.com sites in China.