4 Key Functions the Travel Industry Should Know about WeChat

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WeChat image

Since it official launch in 2011, WeChat (better known as Weixin in its home country) has been stealing a large share of social media buzz and spotlight. Even taking into account the fact that WeChat is another creation of the 800-pound Chinese social media gorilla Tencent which commands a huge QQ messenger user base, the growth of WeChat – 600 million registered users worldwide and 438 million monthly active users (slightly below Whatsapp’s 500 million) in a span of three years – has been nothing short of phenomenal.

Behind the hype and the confusion about what WeChat is and isn’t, there are a few aspects of WeChat which we feel that hoteliers, operators, destination management organizations (DMOs) and other participants in the outbound Chinese travel market should be aware of. Knowing what it does or doesn’t do would help decide whether this social media channel should be part of the marketing arsenal targeting Chinese travelers.

By the Numbers

In order to decide whether you should consider WeChat, it is instructive to fully come to grip with mobile internet and mobile phone use as it relates to overseas Chinese travelers. Some factoids:

  • There are one billion mobile users in China.
  • With 500 million smart phone users, China is the country with the highest number of smart phone users. Annual smart phone sales in China, also the highest in the world, surpassed that of the U.S. a year or two ago.
  • Over 90% of Chinese mobile users use their phones to access the Internet.
  • Of all nationalities who post on social media about their travels during and after their trips, Chinese travelers are among the highest.
  • Over 90% of smart phone users have a registered WeChat account.

So you can really describe the importance of WeChat in three words: social media + mobility.

Or, the claim that WeChat is THE gateway to Chinese mobile internet is not too far off the mark.

Messaging App

First and foremost, WeChat is a messaging app. Similar to Whatsapp, it has a suite of functions which comes pretty much standard to messaging apps. A few interesting and unique functions include:

  • Hold To Talk – you can use WeChat like a walkie-talkie instead of typing texts. Messages are sent to the other side like voicemails.
  • Video calls – you can make video calls over WiFi or 3G networks.
  • People Nearby – this feature allows you to look around and connect to other users in the area, if they accept your connection requests.
  • Shake – it is a fun feature which, by shaking your phone, you connect with someone anywhere in the world who is also shaking his/her phone at the very moment.
  • Drift Bottle – this is another fun feature which lets you put a digital (text or video) message in a virtual bottle and let it drift in WeChat’s virtual oceans, to be picked up by someone somewhere in non-virtual time.

While there is still much ongoing debate and comparisons amongst messaging app like WeChat, Whatsapp, Line and Viper, the debate is pretty much meaningless, especially from Chinese users’ points of view. As messaging apps, they all have unique functionality and styles catering towards different user experiences. For WeChat, however, this is where the similarities with its competitors end.

As Tencent has built several key capabilities and slowly opened its API to third party developers, an ecosystem has gradually emerged around its core messaging functionality. Some of these capabilities are becoming valuable marketing and customer management tools as it relates to Chinese travelers.

Public Accounts – Marketing and CRM Channels

WeChat allows companies and brands to set up public accounts to interact with their customers and followers. One type of public accounts, called subscription accounts, is typically used by companies as a broadcast channel where company information is pushed to subscribers. Service accounts, the other type of public accounts, have more interactive capabilities allowing for a much deeper relationship with customers. Both accounts require explicit user opt-in registrations, and their messaging frequencies are limited (once a day for subscription accounts and once a week for service accounts) in order to preserve user experience.

Whereas the functionality of subscription accounts, much like the popular Weibo accounts, is limited by design and serves primarily as channels for pushing content, the rich capability of service accounts, which includes mobile e-commerce, customer service, integrated payment platform (see below) and a host of 3rd party mini-sites hosting solutions designed specifically for WeChat, makes them an ideal social CRM channel and allows a company to provide strong one-on-one personalized services to its customers.

QR Codes – Online-to-offline (OTO) Conduits

While the tech savvy and shiny-objects crowd vying for the latest NFC or iBeacon technologies might yawn at this o-so-2010 technology, the good old QR codes have their appeal in a couple of ways within the WeChat context. For one, a QR code scanner is built-in to the app and Chinese users are very used to using it due to its convenience. In China it is more common to see people meeting for the first time to connect with each other by scanning each other’s QR codes than by exchanging business cards.

Another more compelling reason is the simplicity of the technology which connects a customer from a company’s physical world to its online world. Imagine displaying a QR code at an amusement park entrance. By scanning the code, a Chinese tourist is directed to the park’s official WeChat account, and, upon subscribing to the account, becomes a follower of the park and gets instant access to all relevant information in Chinese about the park. There are no expensive IT integrations required which might or might not work with customers’ mobile devices.

Built-in Mobile Payment Platform

Designed as a direct challenge to Alibaba’s Alipay, WeChat comes with a built-in mobile payment system. From hotel and airline bookings, taxi fares and parking meters to utility bills, mass adoption is occurring from public institutions and private enterprises alike. Although the payment system only works in China for now, rest assured it won’t be long before it gets extended beyond the Chinese border, as Alipay has extended its reach to North America with its recent introduction of ePass.

All in all, WeChat opens a new marketing and customer relationship channel for businesses while at the same time further diversifying/complicating one’s choices of Chinese social media tools. How WeChat can be used in conjunction with Weibo and other social media platforms would depend on the types of service one provides within the tourism industry, a topic we will double click as we deep dive into specific aspects of WeChat in future articles.

 

2014 Chinese International Travelers Hotel Survey

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The latest edition of the Chinese International Travel Monitor (CITM) report commissioned by Hotels.com TM contains a wealth of information on the traveling and accommodation booking habits of the Chinese outbound travelers.

Conducted during Apr/May 2014 with more than 3000 mainland Chinese residents who had paid for accommodation on an international trip as well as over 3000 of their hotel partners, the 60-page report provides valuable insights into not only the overall market but also various sub-segments, and is well worth a read in its entirety ( full report here ) especially for those who are in the trade. For those who are time challenged, here is a Readers Digest version for your light read.

Key findings

  • The rising affluence of the growing Chinese middle class will continue to drive towards higher aggregate number of outbound travelers for years to come. There is also growing confidence among these travelers, particularly the young, who have already experienced international travel and are more eager to venture beyond the tried-and-true destinations.
  • There are clear indications that Chinese travelers are moving towards independent travel (FIT) and away from group travel, particularly among the young. This is confirmed by two thirds of those surveyed who say they now prefer to travel independently and collaborated by 60% of hoteliers who experienced a boost in independent travelers in the past two years .
  • Chinese travelers are increasingly going online, particularly via mobile devices, to research and book their travels and then share their experiences via social media. Hoteliers are well advised to have a clear and executable online strategy to stay competitive in this market.

 

Background/context

97 million
traveled overseas from mainland China in 2013.

US$129 billion
total spend while traveling abroad.

618 million
internet users in China.

90%
internet users have at least one social media account.

 

Below are some stats to set the numerical context for the analysis.

  • 97 million Chinese traveled overseas in 2013. The number in the first three months of 2014 was up about 17%, leaving little doubt that the total yearly figure will surpass 100 million this year, according to Tourism Administration of China.
  • Chinese tourists spent US$ 129 billion in total in 2013, pulling significantly ahead of second place United States, according to UNWTO.
  • 618 million internet users in 2013 amounting to 45.8% overall penetration rate, 500 million of whom access the internet via mobile devices and 90% have at least one social media account, according to China Internet Network Information.
  • No more than one in five citizens have passports, hence, the potential for future growth.

Chinese traveler profile

US$ 1086
average daily spend excluding accommodation.

97%
travel for leisure, 49% for business or education.

67%
prefer to travel independently, not with a tour group.

 

Below is an overall Chinese traveler profile.

  • Mean average daily spend per day when traveling abroad, excluding accommodation: US$ 1086
  • 97% travel for leisure; 49% for business/education
  • 58% stay 2-3 nights, 28% 1 night and 11% 4-6 nights according to hotelier reports.
  • 67% prefer to travel independently, as confirmed by hoteliers surveyed indicating a low of 65% (Europe) to a high of 77% (Asia Pacific) of their Chinese guests now travel independently .

 

Companion types of Chinese traveler Types of companions of Chinese travelers

Chinese traveler lengths of stay at hotels Chinese travelers lengths of stay at individual international hotels

 

How Chinese travelers conduct hotel research

When traveling abroad, Chinese travelers are known to conduct thorough research prior to choosing their destinations, consulting almost five sources of information to help them converge on a final decision. Below is a breakdown of where they gather their research information.

Information sources used by Chinese travelers for their hotel research Information sources used by Chinese travelers for their hotel research

Booking channels

53%
book their hotels online.

17%
book using a mobile app.

12%
book using the hotel telephone.

 

Not only do Chinese travelers conduct their research online, an increasing number of them are doing their booking online as well. Again, the smart phone and its mobile apps are quickly becoming the dominant gateway to the internet.

  • 53% now book their hotels online either on a desktop or via a mobile app, either directly with the hotel or via an online travel company.
  • 17% book their hotel using mobile apps, an almost 300% increase from 2013. The percentage is even higher (22%) among those under 35 of age.
  • Booking through a travel agent has fallen slightly to 34% (20% for under-35s)
  • Only 12% book using a hotel telephone.

 

Below shows a breakdown of the types of accommodation booked by Chinese travelers based on Hotels.com’s worldwide booking data. Rounding out the top three are 3-star hotels (29%), 4-star hotels (28%) and 5-star hotels (17%).

Chinese traveler accommodation types Accommodation types booked by Chinese travelers

 

How foods influence their decisions

95%
have a meal at their hotel restaurant.

73%
rate Chinese foods among most important services offered at a hotel.

No. 2
most important activity when traveling abroad.

 

It is common knowledge that foods play a very important part of their culture for Chinese living at or traveling away from home, as evidenced in the survey results.

  • 95% have a meal at the hotel restaurant on their trip. Both travelers and hoteliers agree that restaurants are where most money is spent.
  • 73% rate the provision of Chinese specific foods as among the most important service offered at a hotel, with 37% voting for room service options and 33% for Chinese breakfast. Note also there is also a strong desire to experience local cuisine among the respondents.
  • Dining is rated the second most important activity when traveling abroad.

 

Important hotel amenities

The hotel amenities most important to Chinese travelers are room service options (57%), followed by onsite restaurant (55%). Not so much for bars (8%), however.

Most import amenities to Chinese hotel guests Hotel amenities considered most important to Chinese travelers.

Important Chinese specific products or services

The majority of the respondents say they are fairly open-minded when it comes to hotels not catering to their specific needs. However, their specific preferences are very much defined where there are choices. Below lists the top 10 most important Chinese specific products or services while staying at a hotel on an international trip, and also how these products or services stack up against their expectations.

 

Most important Service/Product Needs improvement
59% wifi Free Wifi 19%
59% Union Pay China Union Pay / Alipay 27%
50% Chinese staff In-house Mandarin speaking staff 39%
48% Chinese travel guides Translated tour guides 29%
38% Chinese hotel website Hotel website in Chinese
24%
37% Chinese room services Chinese room service options
27%
36% Chinese programs Chinese TV programs
26%
33% Chinese breakfast Chinese breakfast
23%
27% translated welcome materials Translated welcome materials 20%
25% Chinese newspapers Chinese newspapers/magazines
18%
Hotel amenities most important to Chinese guests

 

 

Below are the top five Chinese specific products or services most requested by Chinese travelers on an international trip.

Products most requested by Chinese hotel guests

Products or services most requested by Chinese hotel guests

 

Where Chinese travelers pay the most for accommodations

The following lists the top 10 average hotel prices paid by Chinese travelers in 2013 based on Hotels.com’s Chinese website.

top hotel prices paid by Chinese

Top average hotel prices paid by Chinese travelers by country

Where Chinese are top spenders on accommodations

Based on Hotels.com 2013 internal data, Chinese international travelers were the 7th highest spending nationality on hotel rooms with an average rate of US $169 per room night. They were the top spenders in Australia, Japan, the Netherlands and New Zealand.

Below is the list of countries where Chinese travelers were among the top 10 spenders on accommodations in 2013.

 

Country Position
Australia 1st
Japan 1st
Netherlands 1st
New Zealand 1st
France 2nd
Germany 3rd
Thailand 3rd
Sweden 5th
Singapore 6th
South Korea 6th
Switzerland 6th
Canada 7th
Taiwan 8th
UK 8th
Italy 9th
Denmark 10th
India 10th
Countries where Chinese are top 10 spenders on accommodations

 

The critical role of internet

48%
do their hotel research using online websites.

36%
book a hotel online.

91%
netizens have a social media account.

84%
share their experiences during and after their international trip.

 

A recurring theme of this CITM report is how critical a role internet plays in guiding a Chinese traveler’s decision on choosing accommodations prior to traveling abroad and sharing his/her experiences during and after the trip. In particular, the roles of social media and mobile phones before and after the trip cannot be underestimated. A few highlights:

  • 48% research done using online accommodation/travel websites and 47% using online review sites. These two sources are the most relied upon during the selection phase.
  • 36% use online booking method to reserve a hotel, 17% through a mobile app.
  • 59% rate free WiFi in the hotel as very important; 19% feel that need is not met.
  • 91% of Chinese netizens have at least one social media account.
  • 84% of them share their experiences on social media during and after their international trip (93% among the young).
  • 31% of those aged 35 and under share their experiences on travel review sites.

 

The chart below breaks down how Chinese travelers share their trip experiences.

How Chinese share their trip experiences

How Chinese travelers share their trip experiences

Independent traveler profile

67%
prefer to travel independently.

81%
age 35 and under prefer to travel independently.

US$ 1288
daily spend vs $679 for group tour travelers.

 

One key message from the CITM report is the growing importance of the independent travelers (FIT). The report removes any lingering doubt about the significance or maturity of this segment. The favorable attributes of this segment effectively preordains that going after this segment will be the most critical battleground for the hoteliers.

  • 67% of respondents say they prefer to make their own international travel arrangements. The preference is even more so for younger travelers (81%).
  • FIT travelers have a much higher daily spend (US $1288) compared to group tour travelers ($US 679)
  • They take longer trips (1.5 vs 1.3 week) than group tour travelers.
  • Their trip decisions are influenced by: 19% online review sites, 15% friends and families, 15% online accommodation sites.

There are also different nuances amongst other segments covered by the report, including the under-35s, business travelers, female travelers and shoppers, a topic which will be covered in more detail in future articles. Stay tuned.

 

BRIC Countries Dominated 2013 Outbound Tourism Growth

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Chinese taste for outbound travels continued to grow unabated in 2013 with a whopping 26% increase of $27 billion over the previous year. With 98 million outbound trips and a total spend of US$129 billion, the Chinese consolidated its top dog position, a position they took in 2012, and significantly pulled ahead of Germany ($86.9 billion) and the U.S. ($86.2 billion) which occupied second and third place, according to the United Nations World Tourism Organization (UNWTO).

 

Top tourism spending countries in 2013
Date source:  UNTWO

Chinese tourism spending increased almost tenfold in 13 years since 2000.

Besides China, the emerging countries of Russia and Brazil also took the spotlights on outbound tourism in 2013. The three countries accounted for $40 billion of the $81 billion in total international tourism expenditure growth during last year. Russia edged out the U.K. to take over fourth spot, following a 25% growth to $54 billion. Brazil entered top 10 for the first time on the back of a 13% increase to $25 billion.

(Click to see larger image)

Top tourism spending countries since 2009

Data source: UNWTO

European countries further expedite visa applications

More Chinese tourists are expected in Europe in 2014 as country after country tries to simplify the visa application process for Chinese tourists. 3.47 million Chinese tourists visited Europe in 2013, a 11% increase over 2012.

For example, France, already the top destination among Chinese tourists, slashes the travel document processing time from 10 days to 48 hours and further relaxes where travelers need to go to apply for their visas. The U.K., Belgium and Italy are among other European countries working hard to streamline their visa application processes for Chinese tourists.

FIT travel continued to expand among travelers

2013 witnessed further evidence that FIT travels are increasingly popular for Chinese travelers as they spread out from the most popular tier one destinations, cut down the number of destinations during one’s trip, spend more time in a single destination, and diving deeper into the local cultures.

Theme based tours such as wine tasting events, chateau visits, shopping sprees and honeymoon trips are very popular. In France, for example, it is not uncommon for Chinese visitors to spend one or two weeks in a chateau or a local village.

This evolution in Chinese travel preferences is not surprising, as it follows a very similar trajectory as the ones of the Japanese in the 1980s and Koreans at the turn of the century. The only surprise is the relatively short time it has taken for this trend to unfold and the magnitude of the change compared to the experience from the other two Asian countries.

Sources: UNWTO, Hotel-Online.com, Areppim.com

5 Trends In Outbound China Travel Market in 2014

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As businesses in the travel industry have closed their books for 2013 and start to make plans for 2014, industry analysts and pundits alike are pondering over the year that has just transpired, particularly as it relates to the Chinese outbound travel market. For sure, 2013 has been a notable year again for the Chinese overseas travelers. But, more importantly, what lies ahead for this tsunami of travelers in 2014, and, as usual, the perpetual question – is the trend going to last?

Chinese outbound tourists

*2013 estimate

While the official statistics for the entire year are still being tallied up, the numbers based on the first three quarters of last year are pointing to the expected growth trend. The total outbound overseas Chinese travelers are projected to grow by 18% over the year before to 98 million, according to a recent report released by the China Tourism Academy. The same report projected the total dollar amount spent at US$118 billion, smashing yet another previous record of $102 billion established in 2012 which propelled China to the top spot, edging out Germany and U.S. (see $102 Billion – China takes global outbound tourist spenders top spot ).

The continued outpour of Chinese overseas travelers is not a unique trend within the Chinese travel theme. Domestically, the Chinese had also been on the move. An estimated 3.3 billion tourists traveled and spent $430 billion within China’s borders in the past year. Little wonder every step along the Great Wall was filled with people and highways turning into kilometers of parking lots during peak tourist seasons inside the country.

As for the upcoming year, the China Tourism Academy, among other industry experts, is predicting another year of growth in the mid-teens (16% – 18%) for the Chinese outbound market. The prediction would put the total number of outbound travelers to solidly beyond the 100-million milestone.

While no drastic change of course is expected in 2014, barring any black swan event knocking over the apple cart otherwise known as the New Normal global economy, our crystal ball is offering the following five evolutions to watch out for.

1.    Continued expansion of the free independent travelers (FIT)

The first prediction is an easy one. As more and more Chinese having already traveled overseas return for more trips, these repeat travelers are more confident than ever and willing to venture beyond what they had experienced in their first trips. If the evolution of the Japanese tourists in the ‘80s and that of the Koreans in the ‘90s are any indication, the size of the independent Chinese travelers will continue to expand. The only difference with the Chinese is the time scale (much more compressed) and magnitude of the numbers involved relative to the two other Asian groups before them.

Another factor causing this trend to accelerate is the new travel regulations which came into effect last year. The law forbids the sale of below-cost tour packages – a common practice by many domestic travel agencies who herd their group tourists through designated shopping outlets from which they earn commission to offset the cost of the trips. The side effect of this new regulation is reflation of package tour prices, in the process eroding the perceived economic advantage of package tours and further tilting the price-value equation in favor of FIT packages.

2.    Going deeper and narrower

Whereas the bragging rights for the travelers back a few years ago used to be doing selfies in front of iconic symbols such as the Eiffel Tower or Coliseum, what is cool now might be having themselves and a group of buddies being helicoptered to the top of a pristine mountain to have lunch on a glacier, or a luxury boat and cycling tour along the Rhine where they stay in castles and vineyards along the route.

What this means is that the pace of their trips will slow down.  Instead of five cities in seven days, the number of destinations might narrow to one or two, allowing them to smell the flowers, so to speak, along the way. Complementing the must-see’s at destinations, more and more time will be spent on theme based activities which better reflect an individual’s tastes and desires for certain types of immersive experience. Multi-day cycling tours, museum tours, hikes along famous trails and other participatory itineraries will become increasingly popular and sought after.

3.    Spreading beyond tier-one destinations

As a group, the ‘been-there-done-that’ repeat overseas tourists are younger, better educated, more affluent, and are eager to venture beyond the standard tourist traps at tier-one destinations. The direct beneficiaries of this emerging trend are the tier-two and tier-three countries and destinations which have been so far left out by the first wave of Chinese tourists.

By definition, non-tier-one destinations are lesser known as less information about them is available. Such is especially true for the amount of information in Chinese. Therefore, the first challenge for these destinations is to raise their profiles so that they are part of the Chinese travelers’ vocabulary and appear as markers on their travel maps.

Along with prediction #2, these two trends will point to further diversification and fragmentation of the travel segment, and which leads us to our next prediction.

4.    Intensified competition among destinations

The expanding FIT travel segment, increased sophistication and maturity of the repeat travelers, and continued diversification of vertical travel themes all mean that destination marketing organizations (DMOs) will need to innovate in order to capitalize on these emerging trends. Amongst the DMOs and industry participants, the next battle will be waged trying to win the hearts and minds of the FIT travelers, the prize of which will be better margins over those from packaged tours as well as economic benefits distributed more evenly across regions.

As most commonly known in the high tech industry, being early and on the bleeding edge of innovation can be detrimental to one’s wallet. On the other hand, being late to the game often means fighting over crumbs amongst many other me-too’s.

Destinations late in catching the initial Chinese trend will be fighting in an increasingly competitive landscape trying to position themselves for the next wave of FIT tourists. Some of them might still be weighing the pros and cons of the first wave of Chinese tourists arriving in tour buses on margin-challenged tour packages and wonder if the market is sustainable or worth going after. In the meantime their more innovative and forward looking counterparts are busy marketing themselves to the next wave of FIT travelers whose experience and preference for luxury occupy significant weights in their travel budget calculus.

2014 will witness further widening of the gaps between the have and have-not destinations and individual operators.

5.    Increased sophistication of social media marketing

It is well known that the rate of internet user participation is high in China and social media plays an important role when Chinese travelers do their travel research. If these two factoids fail to convince you, the fact that a staggering 91% of Chinese respondents indicated they interacted with social media on their travels, according to a study by hospitality company Accor Hotels, should remove any lingering doubts that social media should be a vital part of your Chinese marketing strategy.

2013 is also the year when WeChat matured from puberty into an 800 pound gorilla. With 500 million users and 90%+ Chinese mobile users having this app installed on their smart phones (incidently, China outsold the U.S. in smart phones last year; another first), WeChat has gone beyond its messaging root and morphed into a full blown one-to-one social network, mobile payment system, social CRM and online-to-offline platform.

The jury is still out on exactly how dominant WeChat will be and exactly what roles it will play, as the platform and its ecosystem of apps are still evolving and mutating at a breakneck pace. The fact that WeChat will be a dominant gateway to mobile internet and a major social media force, however, is now clear and undisputed.

Microblogging, or Weibo, on the other hand, will see its growth moderated, now that it has to share the social media space with WeChat. Does it mean Weibo will fall out of favor any time soon? Not likely. Taper? Maybe.

The question of WeChat replacing Weibo is not quite a valid one as the different nature of the two platforms means that they are designed for different purposes. In fact, social media strategies using both platforms in an integrated and orchestrated manner has been a hot topic in 2013 and will continue to be one this year.

 

Sources: China Daily , Skift Want China Times , Forbes

Chinese tourists in your own backyard?

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chinese_touristsWhile the tourism industry worldwide is scrambling to take advantage of the global mega-trend that is the rise of the outbound Chinese tourists, a less obvious but nonetheless significant nuance is the demographics of ethnic Chinese who have emigrated and lived in these host countries in the past decades. These expatriates exhibit a similar travel behavior as outbound tourists from the mainland. Absent the long-haul flight and a time compressed schedule, they are more inclined to go deep and explore beyond the first tier destinations. For suppliers within large metropolitan areas where new immigrants typically settle in, this represents a segment they cannot afford to ignore.

Below is a glimpse of the Chinese demographics living overseas. Although a more detailed survey is done on Canada only, similar extrapolations can be made for other popular immigration destinations of choice including the U.S. and Australia.

Canada

In this country of diverse ethnic origins, some 20% of the population has a mother tongue other than the official languages of English and French. The largest minority groups are Chinese, South Asians and Filipinos, in that order. The majority of Chinese (over 70%) live in the country’s biggest cities of Toronto and Vancouver.  Chinese is the third most common mother tongue spoken in the country.

A sample of Chinese population statistics (based on last census in 2006):

  • total: 1.3 million
  • the vast majority of them live in Toronto (436,000, 9% of the city’s population) and Vancouver (425,000, 17%)
  • 72% were born outside of Canada
  • the majority of them arrived recently: 52% arrived in the the past 10 years, 25% arrived in the ’80s. (Note: this is based on 2001 statistics. The percentage of recent arrivals would be even higher now)

Below are the Chinese population distributions in other Western countries.

United States:

Top 10 states with the largest Chinese population (2010):

  • California 1.25 million
  • Metropolitan New York: 665,000
  • Texas: 157,000
  • New Jersey 134,000
  • Massachusetts 123,000
  • Illinois 104,000
  • Washington 94,000
  • Pennsylvania 85,000
  • Maryland 69,000
  • total: 3.6 million

Europe:

  • Russia: 1 million
  • France: 700,000
  • UK: 500,000
  • Netherlands: 77,000
  • Germany: 71,600

Australia: 670,000

Sources: Statistics Canada, Wikipedia, Chinese Canadian Profile

2.2 million Chinese outbound tourists during Golden Week holiday

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great_wallT he number of Chinese tourists taking advantage of the Golden Week holiday in October to go overseas continues to rise. During this past holiday week, an estimated 2.2 million people left the country, a 10% increase over 2010. These outbound tourists are estimated to have spent USD $2.1 billion with an average spend of USD $950, according to the China Tourism Academy.

In addition to the strong Renminbi relative to other depreciating foreign currencies, one key reason cited by outbound Chinese tourists was to get away from the crowds which usually flood all tourist hot spots inside the country during this holiday period.

Not surprisingly, the countries which are in closer proximity to China naturally benefit the most from the influx of these tourists. Hong Kong, for one, expects RMB 4.2 billion (USD $663 million) from these tourists during this short seven day span. Among the chief local beneficiaries are the luxury goods, cosmetics and electronics retailers.

Farther away, the increase in Chinese inbound tourists is also catching Australia’s attention. The country experienced a 23% increase in visitors from that country in the past year, contributing USD $3.26 billion to the country’s economy.

Chinese outbound tourists will increase by 13% and collectively spend a record USD 55 billion overseas in 2011, according to the China Tourism Academy.

Sources: Want-Daily, China Tourism Academy, Xinhua.org

Chinese New Year on the Las Vegas Strip

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A contingent of about 800 Chinese tourists, who joined the “Group of 1000 – Las Vegas” Chinese New Year event organized by tour companies in California, swept through Macy’s department store on the Strip, and, in the ensuing two hour shopping frenzy, devoured a large quantity of high end merchandise.

Mrs. Hong who came from Guangzhou spent over US $1,700 on skin care and cosmetic products from such brand names as Estee Lauder, Lancôme and Dior. As she walked out the door, her hands were also full with four to five additional gifts offered to her by the happy store manager. According to her, American name brands such as Estee Lauder cost more than double in China. At these bargain prices, she was more than happy to stock up for herself and her friends back home. As for clothing, Mrs. Hong planned to buy American name brands such as Calvin Klein and Levis in factory outlets in Vegas.

The Huo’s, a newly wed couple from Beijing, took advantage of the Chinese New Year to go on their honeymoon trip in Vegas. The wife spent close to $500 on Origins skin care products and Bulgari perfumes, of which she is a devoted fan. The husband jokingly said that he served a dual purpose of being the bag carrier and credit card swiper, and that the Macy’s excursion is only the appetitizer. The couple did not have a shopping budget in mind at the time.

The Xi’s from Guangzhou had been on a shopping spree since embarking on their American journey starting in Hawaii. By the time they reached their second stop of Vegas, they had already converted over $7,000 into three large suitcases full of purses, shoes, cosmetics and health products. Mrs Xi only spent $700 on a watch at Macy’s, and, like Mrs. Huo, did not have a hard budget in mind.

Mrs. You spent $900 on a watch and some more on cosmetics. She indicated that she would not be as easily lured into buying as she would have been in the past, as most of the attractive models available there can be purchased in China these days.

Macy’s would not disclose any sales figures for that evening, but department manager Tracy Anderson estimated roughly four to five thousand visitors from China came through the door during the Chinese New Year week.

Outside of Macy’s, the Strip casinos also rolled out their red carpets for the Chinese visitors during the festive season. According to Greg Shulman, vice president of international marketing for Bellagio, Chinese New Year is important to the casinos financially, maybe not in terms of overall visitor count, but clearly for gaming volumes, especially baccarat. He also said that Chinese New Year typically attracts high end visitors from Greater China (Mainland China, Taiwan and Hong Kong) who typically stay longer and spend more than the average visitors.

 

Chinese Tourists And Their Global Impact

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I nbound Chinese tourists are increasingly becoming a key source of revenue for many countries all over the globe. Amidst the economic woes in many developed countries throughout 2009 and 2010 in the wake of the financial crisis in 2008, which saw a global decrease of 6 to 9% in tourism related revenues, spending by Chinese tourists remained a bright spot along with other BRIC (Brazil, Russia, India and China) countries with a 21% increase over the previous year.

In 2009, Chinese outbound tourists registered 60 million person-trips, surpassing Japan as the largest tourist exporting country in Asia. According to the World Tourism Organization, Chinese tourists collectively spent 43.7 billion US dollars in 2009, earning them fourth spot after Gemany (80.8 billion), the U.S. (73.1 billion), and the UK (48.5 billion). The same organization also predicts Chinese tourists will reach 100 million by 2020 and that China will become the largest tourist exporting country.

In the U.S., an average Chinese tourist stays 23 days and spends $7,200 USD, significantly higher than the overall average of $4,000 USD spent by all tourists.

In Canada , the country is expected to benefit from the passing of the Approved Destination Status (ADS) agreement with China with a 50% increase in tourists into the country by 2015. In August, the province of British Columbia registered a 42% increase in Chinese visitors over the same period last year following the signing of the agreement.

Data from other parts of the world seem to indicate the Chinese tourism trend is broad based and secular in nature. Among them:

United States – indications are Chinese tourists to the country will reach over one million in 2010 (a compound growth rate of 33% for the past few years).  An average Chinese tourist stays 23 days in the country and spends $7,200 USD, significantly higher than the overall average of $4,000 USD spent by all tourists. The U.S. Travel Association predicts that China will become the number one inbound tourist country within 10 years. In fact, it would not be surprised to see the Chinese will outnumber those from all other countries combined by then.

Australia – 360,000 Chinese visited the country in 2009, making it the fourth largest country of origin after New Zealand, the U.S. and the UK. These visitors brought in $2.8 billion Australian dollars of tourist revenues, representing the highest spend per visitor among all countries.

Japan – thanks to a recent loosening of visa requirements, visitors from China is expected to reach 1.5 million in 2010, a 50% increase over last year. Surveys indicate that the main purpose of Chinese visiting Japan is shopping instead of sightseeing.

Korea – following a similar easing on visa requirements as in Japan, Korea experienced an explosive growth in Chinese tourists with 1.2 million visitors in 2009.

Thailand – the country was visited by 91,000 Chinese visitors in the month of July, an 88% increase over the same time last year.

(source:  Web Lite Translation Corp. )

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