Chinese travelers abroad will be spending less on shopping: But that does not mean that they won’t be spending less overall. This is the key takeaway that one received after hearing Yiling Pan, senior editor of the authoritative Jing Daily, tell delegates to Connect Travel’s recent RTO Summit East in New York City, identify four trends that “destination marketers 
and travel groups have to understand” if they want to bring more Chinese travelers to the U.S.
Almost all of what follows in INBOUND’s distillation of Pan’s remarks is in her own words.
The Four Trends
- Customization: There is an increasing need for customized travel tours, especially important to the high-end traveler from Chinas … those people who are rich and wealthy who want to get a luxury experience from their trip abroad. Data from HURUN (a Shanghai-based research and media company) indicate that high net worth respondents from their survey told them that they are truly looking into spending their money on customized and experiential travel abroad. And, according to another recent report published by a Chinese research firm, they said that the customized travel industry in China is still in its early development stages, and the online sales for such tours remain very low. So, it means there is significant room for growth. The market system has been around in China since 2000, but only 7.9 percent of customized tour revenue came from online booking in 2017. It means that there is room for a company to think about growing the business there.
- The Rise of Cultural Tourism: We think this trend starts from China’s millennium and Gen B generation who are young, who want to understand culture and the arts. But this trend has quickly spread over to older people as well. So, we see visiting cultural institutions—no matter if it’s a museum, art gallery or exhibition—is a must for Chinese visitors nowadays when they plan their trip. They especially to visit places that allow them to take great pictures—“Instagramable” pictures—so that they can share them on social media platforms in China.
Another thing related to this is that more and more young Chinse people are becoming micro- influencers on the social media. One of the things that they really like to share with people on their social media channel is their travel, including visiting the trendiest and the chic-est museums and art places abroad. So, we think this micro-influencer thing is actually reinforces people’s interest in cultural tourism here (in the USA).
- A Growing Need for Educational Tours: In Chinese families, the parents believe that to invest in their kid’s education is probably one of the most important things in their lives. When it comes to travel, they hope to take their kids abroad to be on a tour that can benefit them culturally and educationally. So many universities are super popular, hot destinations among Chinese families, Chinese parents, Chinese travelers.
For example, at Columbia University in the United States—I graduated from the school—I have noticed that each summer and winter, during vacation time, a lot of Chinese parents bring their kids there. They go there either individually or in a very small tour, in order to look into the University … so that their kids can see how it looks like to study in a school like this. The hope coming out of this tour is that they hope that their kids can someday study at Columbia—given the experience that they have had at the school. In the UK, a school like Oxford or Cambridge is constantly accepting requests for tours from Chinese families so that the families can check what the university is offering.
- Chinese Travelers are Spending Much Less on Shopping … especially on luxury goods. Normally, the United States is mostly more expensive than the luxury markets in Europe. One reason is that many luxury brands are originally from Europe, so it’s less expensive there. Recent data from the global management consultancy Oliver Wyman shows that shopping accounted for only 32 percent of the travel budget of Chinese travelers in 2018—a significant decrease from 41 percent in 2017. This trend is definitely going as we expected (and will be) more in the future.
People will spend much, much less in the future. However, we don’t think it’s bad news for the travel industry here. While it’s true that shopping is no longer the priority for them to be here (in the U.S.), but it doesn’t mean that they’re not spending on travel or spending anything less while abroad. It means that they’re looking for something new spend their money on.
Like for example, when looking for luxury services, they might want to stay at the top-notch luxury hotels here to get different experiences. They might want to enjoy fine dining at some great restaurant that they can never get in China—things like that. It’s no longer just material goods. They’re more looking into services and experiences.
