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.

 

What the latest Google Room 77 deal means for hotels

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In a move to foray further into the hotel booking business, Google just announced a licensing deal with Room 77, a hotel booking platform which aggregates rates from major online travel agents (OTAs) including Orbitz, Kayak, Expedia and Priceline and allows users to book from those sites or through Room 77.

This latest deal is one in a series of efforts by Google to make itself a serious player in the travel booking industry. Steps taken by Google in the past include its US $770 million acquisition of travel software company ITA several years ago, the introduction of its own Flight Explore and Hotel Finder and the inclusion of Zagat ratings and pricing information in Hotel Finder. Despite such efforts, Google has yet to make a serious dent into the competitive hotel booking business.

That might change. The Room 77 licensing agreement would allow the search engine giant to benefit from not only the extensive hotel database from Room 77 but also its ability to provide in-depth details on specific hotel rooms including the size, layout and amenities inside the rooms.

With the Room 77 addition to its arsenal, Google aims to provide a richer search experience while at the same time getting itself much more closely integrated into the booking process. Google’s move would potentially put itself in competition with the major OTAs which, ironically, are also Google’s biggest advertisers.

What would the new Google hotel search look like?

To see the current Google hotel search features and what they might look like after the Room 77 software has been integrated, let’s use a search on “Los Angeles hotels” as an example.

downtown LA Google hotel search

At the top of the search results are the sponsored ads followed by the top search results – Trip Advisors and Expedia in this case. Below them is a list of downtown L.A. hotels surfed up by Google, each of which comes with Google reviews and a room price. Mousing over the room price would cause the detailed hotel info to appear in the right hand column, and clicking the same room price would result in a popup/dropdown containing check-in and check-out date input fields and a set of links from booking sites. More importantly, it also includes a link to the website of the hotel itself.

What it means to hotel operators

By further integrating reviews, room rates and booking details into their search results, Google is trying to carve out a bigger role for itself in travelers’ searching and planning for accommodations. By making a more visible path for travelers to book through the hotels’ websites directly, it is providing hoteliers a smoother booking path as an additional alternative to the traditional online booking sites which charge commission of up to 25%.

Hotel operators might want to re-evaluate their Google click ads strategy as the integration of travel search and hotel booking further develops as a result of the Room 77 deal.

Thanks to Google’s effort in bringing hotels closer to their potential booking customers through its search engine, it is also imperative upon hotel operators to strengthen ways to engage potential customers whose preferred language is not English.

downtown Vancouver Google hotel search in Chinese

As an example, a search on “Vancouver downtown hotels” in Chinese shows Shangri-la Hotel prominently, even higher than booking site heavyweights such as Agoda, Trip Advisor/Daodao and Booking.com.  Again, displayed also on the first page is the list of downtown hotels by Google.  From there, clicking through to the hotel website with a choice of the visitors’ language would substantially enhance their experience and the chance of closing the deal for the hotel.

By the numbers

Below are some context background data.

  • Lodging revenue was US $208 billion in the U.S. in 2010, according to the U.S. Commerce Department. An estimated 31% of U.S. hotel reservations were made online (PhoCusWright).
  • The top 5 search sites on Google Adwords in the travel category are, in order, Kayak, Priceline, Orbitz, Trip Advisor and Cheapoair.
  • Priceline Group and Expedia will likely spend $1.5 and $1 billion, respectively, on Google advertising, together accounting for up to 5% of Google’s ad revenue in 2014, according to RBC Capital Markets.

 

Sources: Wall Street Journal, Search Engine Land, Google Inside Search

 

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