• Chinese travelers spend more on new experiences , but shop less

    Ramesh Tiwari
    July 13, 2017
    Chinese travelers spend more on new experiences , but shop less

    TravelBizNews Online —

    Hong Kong : The number of trips by outbound Chinese Traveler is expected to reach 150 million this year, but while average trip spend is on the rise (up 3.5 percent 2015-2016), surprisingly shopping spend declined both in absolute and relative terms, to 33 percent of trip spend in the same period, according to a report released by Oliver Wyman, a global consulting firm.

    The findings of the report, ‘Prepare for Turbulence: The Chinese Traveler of Today and Tomorrow,’  reveals that shopping dropped from second biggest motivation for traveling to third, behind sightseeing, recreation and entertainment. The decline was mainly driven by decreased shopping for resale – ‘daigou’ – which fell from 8 percent to 3 percent year-over-year.

    “Chinese Traveler continue to shift their spending towards more meaningful experiences such as exquisite dining, extraordinary cultural journeys and even adventurous sports,” said Hunter Williams, Oliver Wyman partner and author of the report.

    “At the same time, cross-border e-commerce has grown rapidly, overseas travel has democratized, and there is greater availability of products at home, meaning there is less need to for buying overseas for resale”

    Travelers who rank shopping as the main reason to travel are generally from lower income brackets than those who rank shopping as the second and third motivations to travel. Therefore, the most “intent shoppers” are not the biggest spenders in either shopping or total travel spending.

    For example retail spend as proportion of overall trip spend in the United Kingdom went down from 42 percent to 33 percent despite the weakness of the pound following Brexit. A particular fall was seen in daigou spend, which dropped from RMB1,800 to RMB1,000 per person from 2015-2016.

    Similarly, retail spend in the United States dropped from 41 percent to 28 percent with only 5 percent of respondents ranking shopping as number one reason to go to the country.

    The report reveals the major shifts in the tastes of Chinese Traveler, who are becoming more independent as they become more sophisticated. “Cookie cutter” holidays have greatly declined in popularity as a result – fewer than 1 in 40 holidays were mostly planned by travel agents in 2016 vs. more than 1 in 7 in 2015. They are also staying longer in distant locations, traveling more with their families and even spending less on shopping. They now travel more with immediate family and especially children, resulting in growth in average group size from 2.9 to 3.1 travelers per group.

    In terms of travel duration, Chinese travelers are making shorter trips to Asia and significantly longer trips to long-haul destinations. Hong Kong remains the most popular destination .

    South Korea has slipped from its position as the top destination. Japan has continued to rise, again being the fastest growing destination  to visit in 2017.

    The report also reveals that twice as many trips were made domestically last year compared to 2015, with over 90 percent of respondents making at least one domestic tourism trip in the past 12 months. On the consumption front, they are much less interested in shopping when traveling domestically and also more price conscious, with 47 percent of respondents seeking value/price compared with 40 percent for overseas destinations.

    With long-haul destinations becoming more popular among Chinese tourists, Oliver Wyman expects that a greater proportion of spend will be allocated to accommodation, dining and entertainment, while shopping spend as a percentage of overall travel spend is likely to continue to decline moving forward.

    July 12, 2017

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      2017 in review -Top stories

      January 1 : New year nightclub attack leaves 39 dead in Istanbul
      January 20 : Republican billionaire Donald Trump sworn in as 45th US president
      January 23 : Syria peace talks begin in Kazakh capital Astana
      March 29 :United Kingdom officially launches the Brexit process
      April 4 :Syria launches chemical attack killing 90 people
      April 6 : US cruise missiles destroy Syrian air base
      April 9 : Bombings at two churches in Egypt kill dozens
      April 16 : Refugee death toll passes 1,000 in Mediterranean
      April 16 :Turkey says YES to presidential system
      May 6 :Emmanuel Macron elected French president defeating Marine Le Pen
      May 19 :Iran’s President Hassan Rouhani wins re-election
      May 22 : Terrorist attack kills 22 at Manchester concert
      June 5 : Gulf nations severe ties with Qatar
      June 7 :Suicide bombers attack Iranian parliament killing 13 people
      June 14 :London fire kills 71 in the 24-storey Grenfell Tower
      July 4 :North Korean leader Kim Jong-un’s missile ambitions
      July 28 : Pakistan’s top court disqualifies Prime Minister Nawaz Sharif from office
      August 5 :US withdraws from Paris climate change pact
      August 17 :Storms cause record damage in Caribbean and southern United States
      August 25 :Muslim Rohingya start fleeing Rakhine state in Myanmar
      September 15 : NASA’s 13-year Saturn mission ends
      September 20 : Earthquake kills more than 200 in Mexico
      September 24 : Germany’s Chancellor Angela Merkel wins fourth term
      September 26 : Saudi Arabia lifts ban on women driving
      October 1 : Gunman opens fire on Las Vegas music festival killing 59 people
      October 14 : Massive bombing in Somalia’s capital Modadishu kill more than 500 people
      October 24 : China confirms the elevation of President Xi Jinping to the same status as the nation’s founder, Mao Zedong, and Deng Xiaoping, by enshrining ‘Xi Jinping thought’ in the party’s constitution at the 19th National Congress of the Communist Party of China
      October 27 : Catalonia declares independence from Spain
      November 4 : S audi Arabia detains 11 princes, four ministers and ten former ministers in a corruption probe
      November 12 : Iran-Iraq magnitude 7.3 earthquake kills more than 500
      November 15 : Argentine navy submarine disappears with 44 crew on board
      November 21 : Robert Mugabe resigns as Zimbabwe’s president after 37 years in power. His former deputy Emmerson Mnangagwa will become president.
      November 22 : Bosnian Serb army commander Ratko Mladic convicted of genocide in Srebrenica during the 1990s Bosnian War
      November 24 : Gunmen kill hundreds at Sinai mosque in Egypt
      December 4 : Houthi militants assassinate Yemen’s former President Ali Abdullah Saleh
      December 5 : Russia banned from 2018 Winter Olympics for state-sponsored doping
      December 6 : US President Donald Trump recognises Jerusalem as the capital of Israel
      December 17 : Price of one bitcoin reaches a new high of $19,783.06 dollars
      December 21 : Yemen’s cholera outbreak
      December 22 : Syria peace talks in Astana (compiled)

      Top ten most visited cities

      Between January and August 2017, destinations worldwide welcomed 901 million international tourist arrivals (overnight visitors), 56 million more than in the same period of 2016 .The top ten most visited cities are:
      CityVisitors
      HONG KONG26.6 million
      BANGKOK 21.2 million
      LONDON19.2 million
      SINGAPORE16.6 million
      MACAU15.4 million
      DUBAI14.9 million
      PARIS14.4 million
      NEW YORK12.7 million
      SHENZHEN12.6 million
      KUALA LUMPUR12.3 million

      Source: Euromonitor International

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