Trade bullish on Chinese outbound travel growth

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Guangzhou International Airport. Credits: 123rf

DESPITE a contraction in Asia’s biggest economy in July and August, coupled with the global economic slowdown, the Chinese outbound market is expected to remain bullish and grow as travel becomes a necessity in China.

Speaking at the Global Tourism Economy Forum (GTEF) 2015 in Macau, Billy Ng, managing director and head of Asia gaming, lodging and leisure, global research at Bank of America Merrill Lynch, said: “Outbound tourism is on track to hit 135 million in 2015, and we are not seeing a slowdown because of various factors like rising disposable income and the increase in middle-class households to 300 million by 2020.

“There is presently a low penetration as only seven per cent of our citizens have passports to travel. If you look at the overall population, only eight per cent in China have travelled, versus 20 per cent in the US and 100 per cent in Germany.”

Desirée Bollier, CEO, Value Retail Management, said: “The Chinese used to rely on tour operators who had a lot of influence five years ago. Today, savvy Chinese travellers use their mobile devices to (check out) destinations, then they’d tell the tour operator what they wish to do. This prompted us to invest more in the digital sphere, such as on websites and apps.”

Chinese travellers are exhibiting more sophisticated preferences too, observed Bollier. “Brands are no longer just a logo. Chinese travellers like to know the brand heritage; they also crave new brands that are not seen in their country. Behaviour-wise, this can be reflected in hotels taking large numbers of Chinese who previously would have stayed in two to three-star hotels,” she added.

To drive higher spending among Chinese travellers, who currently spend only 10 per cent of their expenditures on lodging, Winnie Chiu, president and executive director, Dorsett Hospitality International, said: “We need to analyse travellers’ behaviours and translate that back to our departments and to the role we play. We need to adapt to their needs.”

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