Thursday, 5 October 2017

EyeforTravel's Chinese Travel Consumer Report 2017-2018

The following is the introduction EyeforTravel's Chinese Travel Consumer Report 2017-2018, which is available for EyeforTravel On Demand users now ...
In 2016, the Chinese international travel consumer finally looked vulnerable. In line with expectations from the start of that year outbound growth fell, with the rate of growth plunging from 13.8% Year-on-Year (YoY) from 2014 to 2015, down to an estimated 2.7%. A jumpy stock market, diminishing growth, a falling yuan, and a government focus on corruption all helped to dampen the market. However, 2017 is seeing the travel consumer return with a roar. Destinations from Europe to Japan to Vietnam to the polar regions are reporting big jumps in the number of arrivals and the desire to spend has returned as consumer confidence bounces back from falls in 2015 and the first half of 2016.

The story of prolific spending is changing, however. No longer is the Chinese outbound traveler primarily a shopping machine. Traditional shopping destination South Korea plunged in 2017 and across 2016 and 2017 the emphasis has shifted towards the experience. Tours and activities, accommodation and new, more adventurous destinations are benefitting from this trend.

The story isn’t just outside China as well, domestically the travel market continues to thrive and be just as mind-blowingly vast as the rest of China’s statistical repertoire. Our survey found that more than two thirds of respondents reported their last trip was made in China and the China National Tourism Administration that 4.44 billion domestic tourism trips were taken in China during 2016 (China Travel News, 2017a). Spending estimates for 2017 Chinese domestic travel run from around RMB4 trillion up to RMB 6 trillion. In just the Spring Festival holiday alone, 344 million domestic trips occurred.

Capturing this consumer’s booking can be challenging, however, particularly from the perspective of travel suppliers and Western companies.

We found the Chinese consumer is smartphone driven and app-happy, as opposed to the still desktop-driven West. The smartphone comfortably beats out desktop and laptops for research, with 60.3% using it as their primary research device, rising to 65.5% of 18-35s. Although smartphones are slightly less important for booking, they still beat out desktops and laptops, with apps the number one channel. At its most extreme, for the vacation rentals market we found that a 100% of our sample used an app. Part of this is down to the WeChat phenomenon, with the Tencent’s juggernaut beating even Facebook for time spent and monetization.

Whatever the device though, Online Travel Agencies (OTAs) are winning out. Both on the web and in apps and for accommodation and flights, they take more than 70% of digital bookings. At the forefront with popular apps are Qunar and Ctrip. This trend has even pushed the Chinese government to pressure the big airlines to try and capture more direct bookings.

For travel brands looking to attract the international Chinse consumer they need to move with this digital ecosystem, creating localized apps, tapping into Chinese social media, and building payment methods that can work with Alipay and WeChat Pay.

It is a unique market, reversing many of the norms and changing our entire industry. So, please read on and I hope that this report helps you to navigate this already formidable and rapidly expanding market.

Alex Hadwick

Head of Research, EyeforTravel Ltd