It’s that time of year when airports, train stations and highways
around China are experiencing peak volume, as hundreds of millions of the country’s
citizens travel to celebrate the Lunar New Year Spring Festival.
The Year of
the Pig officially begins tomorrow, February 5, but Chinese people celebrate it
during a 40-day travel rush period known as “Chunyun,” which this year runs
from January 21 and March 1.
During that time the government estimates more than three billion
trips will be made, up 0.6% over 2018, with an 8.3% increase in train trips and
a 12% increase in air travel.
Growth in travel is not confined to this celebratory period,
however. Chinese people traveling year-round have made the country the world’s
largest outbound travel market - and it's only getting bigger.
The data
The China Outbound Tourism Research Institute (COTRI) forecasts an
increase of 11% year-over-year in 2019 to a total of 180 million border
crossings from Mainland China, with 49% of those trips ending in Greater China
(Hong Kong, Macau and Taiwan) and 51% going to other destinations around the
world.
COTRI founder and director Wolfgang Georg Arlt does not
believe China’s latest economic slowdown will dampen those numbers.
“The top 10% of Chinese society, they are the ones with passports.
These are the rich guys," he says. "When they spend money on travel, they aren’t using
their salaries; they are using their wealth - money from the stock market or
from buying and selling real estate. Therefore, this economic downturn is not
really making it impossible for them to spend $5,000 on a trip.
“For the not-so-affluent people who just travel to Hong Kong, it
may be a bit more cautious. But if you want to be somebody in China, if you
want to show you are an important person, you have to have a big car and
apartment, and you have to have travel experience.”
Jackey Yu, associate partner in McKinsey & Company's Hong Kong office, says despite
some macroeconomic issues, the factors that have been driving a surge in travel
in recent years will remain strong.
“The rise of the middle class, the policies from the central
government to encourage tourism as one of the key factors to improve the
quality of life of the Chinese people and then all of the infrastructure is
getting more mature to encourage the travel activity. So I see both the demand
side and the supply side will have support,” Yu says.
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According to IATA’s
20-Year Air Passenger Forecast, released in October 2018, China will surpass
the United States to become the world’s largest aviation market by 2025.
And it is also the fastest-growing: By 2037, the Chinese aviation
market will have to accommodate 1.6 billion travelers, one billion more than
today. To manage that increased traffic, China will build 74 new civil airports
by 2020, bringing the total number to 260, according to a report from the Civil
Aviation Administration of China.
Travel by rail will also continue to rise. According to Phocuswright's China Online Travel Overview, China’s high-speed
rail network will expand from 22,000 kilometers in 2017 to 30,000 by 2020.
Shifting tastes
Chinese people are not only traveling more, they are
also traveling differently.
“Before, a Hong Kong or Macau shopping trip
might be a major part of the itineraries, but now the longer-haul and more
unique experiences are picking up,” Yu says.
McKinsey’s report, Chinese Tourists: Dispelling the Myths, is based
on a survey of 2,000 Chinese citizens. The report states: “After travelers
successfully complete one outbound trip, they often feel empowered to take
another - and go farther. In the years to come, we predict long-haul destinations
such as Australia, Europe and the United States will take significant market
share from destinations in Greater China, eventually representing about half of
the outbound travel market.”
When they visit these new locales, the behavior of Chinese travelers
is shifting, with a decreasing emphasis on shopping and visiting traditional
landmarks and a rising interest in unique, local experiences. McKinsey’s survey
found 61% of respondents want local experiences when they travel.
“If you want to be seen by your friends as doing something great
and spectacular and interesting, to have a selfie in front of the Eiffel Tower
- if you are living in a village maybe people are impressed by that - but if
you are living in a city this is not cool anymore,” Arlt says.
...if you want to be somebody in China, if you want to show you are an important person, you have to have a big car and apartment and you have to have travel experience.
Wolfgang Georg Arlt - COTRI
“The people in the first-tier cities, with more education and more
money, they now say, 'I want something more interesting than yet another
cathedral or Starbucks. I want to live with the locals, I want to have
experiences.'”
But Arlt says tours and activities suppliers also need to understand that
Chinese travelers value punctuality.
“They want to live like a local and have authentic experiences, but
please schedule it so you can rely on the fact that [for example] at 3 p.m. the
lion will appear and that this experience does not take more than two hours,”
he says.
“This is the contradiction: money rich but time poor.”
Quality is also critical. Thirty-four percent of respondents in
McKinsey’s survey say fine dining is the most important factor when deciding
where to travel – an indication travel agencies should use food as a key
attraction when trying to sell packages.
Social influence
Regardless of what Chinese travelers are doing while on vacation,
there is one unifying caveat: Everything must be instantly shareable on social platforms
such as WeChat, Weibo, Mafengwo and others.
“Chinese [people] travel to a big part so they can tell their
friends about it,” Arlt says.
“There is also something called co-presence, [meaning] they will go
to lunch and take a photo of the menu and send it their friends in Shanghai and
ask, ‘What should I order?’ Or a photo of a nice leather jacket: ‘Do you want
me to buy it for you?’"
Yu says travel suppliers would be wise to facilitate this - not only
to make themselves more popular with Chinese travelers but also to tap into the
user-generated marketing potential.
“We see some hotels and destinations
give you a professional photographer to do some of the photo taking for you
and to facilitate you sharing through social media,” he says.
Before, a Hong Kong or Macau shopping trip might be a major part of the itineraries, but now the longer-haul and more unique experiences are picking up.
Jackey Yu - McKinsey & Company
On the flip side, he says, the reliance on social
media also means global travel brands need to manage their accounts proactively,
encouraging people to follow them and responding promptly to inquiries.
“Digital will impact the whole customer journey, whether
in the inspiring stage or research stage or to make a purchase,” Yu says.
When asked what inspired their choice of destination
of their most recent outbound trip, 57% of respondents to McKinsey’s survey
selected family and friends. But that inspiration comes through both digital
and face-to-face communication.
“They use social media where they observe how friends
and families actually go outbound, what itineraries, which countries they went
to,” Yu says.
Chinese travelers are analyzing
these social media posts not just for general inspiration but also to identify
destinations and suppliers that have taken steps to accommodate their needs,
for example by providing slippers and a hot water kettle and accepting digital
wallets such as Alipay and WeChat Pay.
“They will look at what people are saying,
and if they name a hotel and say they know how to deal with Chinese people,
they will go there. They will not look at 20 [hotels],” Arlt says.
“The self-consciousness
of Chinese travelers has increased a lot. They know they are the biggest source
market, and they spend the highest amount of money. And they are demanding that
world tourism is organized according to their needs and demands and behavior.”