Rich Chinese millennials show spending firepower but Asia stands to lose


RICH Chinese millennials have an average household travel spend of 420,000 yuan (US$65,000) per year and are set to go on more trips in the next three years, but Asia as a destination overall stands to lose as their reasons for travel have changed.

Hurun’s report on The Chinese Luxury Traveler 2016, done in conjunction with Marriott International, surveyed 525 rich Gen Ys aged 18 to 36 years old with an average personal wealth of, get this – 38.8 million yuan – from sources including investment returns (42 per cent), personal salary (23 per cent) and inheritance (20 per cent). Over half (55 per cent) were male, 77 per cent married and, of that, 75 per cent with one child.

The just-released report shows leisure travel has dropped as the major motivator for travel, with 68 per cent citing this as the reason for travel in the next three years, compared with 82 per cent in 2015.

Exploring the world has jumped as reason for travel in the next three years (50 per cent, from 40 per cent in 2015), along with adventure travel (35 per cent from 23 per cent), cruises (28 per cent from 26 per cent), polar exploration (22 per cent from 16 per cent) and road trips (21 per cent from 12 per cent).

Travel for celebrations and events, study and golf has also dropped.

Because of the shifting trend, interest in neighbouring countries such as Japan (ranked the most memorable travel destination in 2015), South Korea, Hong Kong, Macau and Taiwan have dropped. Longer haul countries such as the US, the Pacific Islands & Oceania, Africa, the Middle East and the North & South Poles have seen more interest, increasing by 27 per cent, 49 per cent, 179 per cent, 129 per cent and 73 per cent respectively.

WeChat emerged as the primary source of travel information for these travellers, however, 73 per cent said they had tried personalised travel services offered by a travel agency. The three most important factors that influenced their choice of agent were personalised travel services (70 per cent), expertise (57 per cent) and itinerary planning (54 per cent). But what they found poor most about agencies were their ability to book flights (28 per cent), plan an itinerary (27 per cent) and make food arrangements (27 per cent).

The top 12 outbound luxury travel agencies in mainland China 2016 are My Tour, Ctrip, 8 Continents, HH Travel, Zanadu, Imperial Tours (first time in top 12), CITS, CITS Amex (first time in top 12), Diadema, CYTS, Wild China and CTS, while American Express is considered the best outbound agent in Macau and Taiwan. This was based on a survey with 56 respondents from senior hotel management during April-May 2016.

At a media conference, when asked what Asian destinations could do so as not to lose out to longer haul destinations, Rupert Hoogewerf, chairman and chief researcher of Hurun Report, told TTG Asia e-Daily: “In terms of frequency of travel, there is still going to be the trips to Japan, South Korea, South-east Asia, etc, because of the geographical advantage – four hours and you’re there.

“But in terms of aspirations, this generation wants to go farther. It strikes me how different they are; I have friends in the UK or Europe, we may go to Italy, Greece, maybe Thailand, but rarely do we see the younger people just travelling absolutely anywhere in the world, which is the case for China. And some of the remote or experiential places are pricey. They could well be US$20,000 per person.

“So I see they will travel two or three times within Asia and longhaul becomes the annual trip. It’s not really a threat to Asian destinations but a demonstration of young Chinese travellers wanting to go further afield.”

Peggy Fang Roe, chief sales & marketing officer Asia-Pacific of Marriott International, agreed there was no threat. “In Asia-Pacific, we operate in 12 countries. With China as the largest and fastest-growing source in every single market except India, everyone is just trying to figure out how we can look after demand than worry about demand being small.”

From the latest findings, Fang Roe said Marriott took away three lessons in particular that it would use: that these travellers want more personalised service, more digital interactions and more adventurous trips.

– More reports to follow

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