The Rise of Chinese Millennial Travelers
04 Sep 2015|Added Value China
It is predicted that by 2030, Chinese travelers will be spending around $700 billion USD on outbound travel and a growing proportion of this is expected to come from the estimated 300 million Chinese millennials. The Chinese outbound tourism market has been boosted in recent years by a number of key factors including the rising numbers of young people travelling, high disposable incomes, ongoing urbanization and the relaxation of visa arrangements. In order to succeed, travel brands, and in particular airlines and destinations targeting Chinese travelers, need to continually adapt their marketing strategies in line with the new demographics and changing consumer profiles.
Today, Chinese millennials (post 80s and post 90s) represent 22% of the Chinese population and are fast becoming an important segment of the travel industry. They typically travel four times a year, have white collar professions and often make more money than their parents. Millennials are digitally savvy, dependent on technology and are rapidly redefining the travel industry and brands need to take note quickly.
Alluring the Chinese millennial traveler presents some unique challenges. They are looking for brands that not only enhance their self-image, but also deliver an immersive experience. In China, Internet connectivity and smart phone use have the highest penetration rates in the world. Digital and mobile media are constantly evolving to keep pace with millennials as they increasingly use online channels to search for travel information, read reviews and make purchases. They aspire to be inspired, taking interest in destinations with personality and being attracted by opportunities to experience local culture.
Traditionally, Hong Kong and Macau were favoured destinations for Chinese tourists but the dynamic is changing. Chinese millennials are now more inclined to travel further afield and spend more money as both their appetite for adventure and disposable incomes grow.
Data from CTR China National Resident Survey (CNRS-TGI),
Multiple choice question. #Sample size<15; *Sample size<30
South Korea in particular is experiencing an influx of Chinese millennials. According to Skift.com, Chinese visitors accounted for 43% of South Korea’s inbound tourism market in 2014 and under half of all 20 to 40 year old visitors came from China. This significant growth that South Korea has experienced as a destination for millennials can be attributed to a number of factors, especially the impact of Korean culture in China. From cosmetics and duty-free items, to soap operas and pop music, Korean products have become enormously popular among the Chinese youth.
Despite the fact that China is increasingly becoming a lucrative market for the global travel and tourism industry, companies need to innovate and revamp their marketing strategies to claim a share of the market. International airlines and destinations are still struggling to understand Chinese culture and the traveler mind-set. For example, Air China, China Eastern Airlines and China Southern Airlines all ranked 70% and above in overall awareness among Chinese consumers, compared with less than 40% for international airline brands showing that current awareness of local airlines is considerably higher than that of international carriers. Brands that can better understand and cater to the needs and desires of Chinese millennial travelers will stand out in the market; one way to succeed in this area is to dig deeper into Chinese culture.
Cultural Insight offers an alternative perspective. Using different methods of cultural analysis from semiotics to anthropology, this approach enables brands to look through the lens of culture, rather than consumers. It enables brands to understand how meaning is produced within specific cultures and how meanings evolve. Inviting fresh outlooks and inspiring brand thinking, allows us to recognize things consumers are unable to express. A Cultural Selling Proposition (CSP) encapsulates such a shift in branding and will enable brands to activate culture and establish deeper and more meaningful relationships with consumers.
Travel brands need to keep pace with the rapidly changing trends and consumer profiles in the China market. The relationship between brands and consumers is constantly renegotiated to fit new conditions. Consumer insights and culture play a crucial role in this process if a brand hopes to stay relevant and capitalize on China’s fast growing travel market. Today, the market is wide open, presenting enormous opportunities for forward thinking industry players aiming to build their brands and gain the loyalty of Chinese travelers.
Written by Panos Dimitropoulos, Account Director of Cultural Insight, with support from Sam Woollard, Client Development Director and the Added Value China team.
*All data collected from: CTR China National Resident Survey (CNRS-TGI)
Contact: Added Value Shanghai Office
T: +86 (21) 3612 6666
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