Understanding the shift in purpose for travel
With the middle class in China growing larger than ever, it has allowed for more focus to be placed on quality of life, and in turn, people are increasingly willing to spend on travel and shopping. A study conducted by Kantar TNS Australia showed that the Chinese are no longer just tourists, they are travellers looking for wonder and thrill.
- They are motivated by experiences that differ completely to everyday life with an opportunity to learn about different customs, cultures, languages, cuisines, scenery and activities.
- They seek out the exotic, and want curiosity-satisfying experiences that are ‘brag worthy’ and unique to share with friends and family back home.
The days of taking in the sights from the safety of a tour bus are coming to an end. They are world travellers, eager to embrace and engage in new experiences.
China’s growing appetite for ‘free, independent travel’
Although group travel has traditionally provided a safety net for the Chinese, the trend is slowly shifting towards travellers seeking the spontaneity, adventure and flexibility that comes with free, independent travel (FIT).
- The pure Chinese FIT is for the most part, a product of younger demographics.
- They are keen to plan their holiday themselves and enjoy venturing solo beyond the cities into regional Australia.
- There is a middle ground within the semi-FIT segment of Chinese, whereby although they are also eager for flexibility to explore and discover something on their own, they are not opposed to some aspects of travel to be organised.
The take away from this is that while group travel does still hold appeal (particularly for those travelling with elderly companions or children), the Australian travel industry needs to understand the increasingly positive opportunity to be had within Chinese FIT and semi-FIT travellers. Therefore, they need to be able to respond and create appropriate packages with pre-booked accommodation and flights but flexible itineraries.
Embracing the share economy
Another way that Chinese travellers will be influencing Australia’s business will be via the share economy. China is leading the way globally with share economy adoption, which in 2015 was worth US$299 billion and is expected to grow 40% by 2020. Share economy accommodation already accounts for 13 million travellers, about 10% of Chinese outbound travellers each year.
- Traditionally, accommodation was provided by businesses such as hotels or tour operators. However FIT (and semi-FIT) Chinese travellers in particular have found a new approach: stay at a stranger’s house for the night(s)!
- While seemingly weird, it in fact is a great alternative to traditional accommodation! With it, Chinese travellers are able to book in the moment from the comfort of home or spontaneously while on the road as opposed to having to book ahead.
- This provides not only ease (and often times can cost less compared to staying at a high end hotel) for these tourists, but also encourages them to interact with the locals and offers the chance for new experiences.
Life for these travellers is more convenient with the share economy, which is viewed as better value for money. Speaking of convenience, given the trend in China toward a cashless society, Chinese travellers are well-accustomed to online bookings and will appreciate acceptance of payment through UnionPay, Alipay and WeChat (to name a few).
The direct influence of the share economy on Australian businesses
All in all, the popularity of the share economy is great news, especially for the smaller towns and communities across Australia.
- Having people share their homes brings in the potential of greater numbers of travellers.
- This brings in good business, not just for the individual hosts, but also for the community at large as travellers explore restaurants, cafes and touring services.
With that being said, how will this affect traditional accommodation providers? While the threat of the share economy is undeniable and will without doubt leave profit margins dented in the coming years, they [traditional accommodation] can still come out on top. To do so, they will be required to better communicate the value of services that share economy providers cannot provide, such as:
- Room service
- On-site restaurants
- Concierge services
- Laundry services
- Health clubs
In the coming years as the levels of Chinese tourism rise and share accommodation with it, the key to success amongst the two types of providers (traditional and shared) will lie in their abilities to emphasise upon their respective strengths.
What should Australian businesses do in face of the growing influence of Chinese travellers?
With Chinese travellers being more socially engaged than ever before, digital platforms along with word of mouth will be highly influential on holiday decisions. In fact, more than four in five share their holiday experiences on WeChat as they travel.
With this in mind, having a cohesive and greater presence on social media and apps like WeChat, Weibo and Ctrip will help make Australia AND your business more relevant. Chinese travellers are no longer your average tourists, but instead world-class travellers eager to explore the unknown and seek new adventures. It is a necessity for businesses to understand this, and the more we can develop our offer to meet these needs, the better.
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