Pictured left: Taming the Dragon

Almost every other company or individual wants to do business in China to tap its huge potential of 1.3 billion population. And everyone wants to go after the Chinese outbound traveller. But to tap this segment you have to first understand what the Chinese travellers like to do when travelling and how to best meet such needs.

Hao Wu, general manager, Daodao, shared some of his insights gleaned from working with the Chinese version of the world’s largest travel website, TripAdvisor.

• They are relatively young, between 15 and 30, have disposable income and are value conscious.

• Currently online penetration is low. “However it’s growing fast and may reach between 40% to 60%.”

• When travelling to other countries, they like to share rooms in four star or five star hotels, which are of good quality.

• When travelling within China, they prefer three star and budget hotels

• There is a growing segment of young FIT travellers who prefer chic boutique hotels.

Pictured right: Daodao’s Wu

A fundamental change is also taking place in the shopping style of Chinese travellers. Where before most just go for leisure shopping in their travels, there is a growing class of Chinese who do “purpose-driven shopping” on their travels.

Explained Mildred Cheong, Abacus International’s director for channel management, China, “For example early this year a group of Chinese travellers came to the newly-opened Louis Vuitton shop in Singapore and cleared out the whole stock in just three hours!”

Similarly a group went to Hong Kong to select properties and bought the whole building. Then a group went to Malaysia to look at office space and ended up with a whole street of offices. And a growing number of Chinese are going to the US to shop for universities for their children.

Pictured left: Abacus’ Cheong

“If you want to tap this market then you will have to find ways to accommodate and receive travellers with special shopping purposes. For example, you could work with a property agent to give value to those looking for properties.”

Jens Thraenhart, president of Chameleon Strategies Inc. and co-founder/executive partner and chief strategist of Dragon Trail, China, however pointed out a downside to the shopping habit of Chinese travellers. While the purpose-driven shoppers form a new market segment, the middle- and lower-income travellers’ shopping could destroy some destinations.

“Some tour companies compete on prices and don’t pay commission to the tour guides. So they bus tourists around Europe or the US to shop. They end up not liking the destination.”

Bobby Ong, regional VP sales and marketing-China for Kempinski Hotels S.A. pointed out that shopping is an evergreen activity among Chinese travellers as it is a trend among Chinese to buy gifts for family and friends when they travel. This is a segment that can be continually tapped.

“There is a growing class of middle income Chinese travellers who want to see the world and they want to shop. This is because things are expensive in China due to currency exchange and luxury taxes. As the RMB is strong, the rich Chinese love to go to Paris or Hong Kong to shop.”

Ong, however, said that one area the Chinese was not spending on is hotels. The challenge is to find a way to make them spend on five stars hotels.

“First-time travellers depend on tour operators to book their hotels. They want to visit a new destination, discover its sights and shop. They don’t want to spend five days lying in the sun in a five star hotel.”

Pictured left: Kempinski’s Ong

He reiterated that the leisure traveller would follow the pack and stay in two star to three star hotels, while the five star hotels are for big ”incentive groups, trade missions and those going on municipalities meetings.

Despite this trend Kempinski is still building hotels in China to educate the Chinese about the company’s brand. If a high-end traveller goes to Paris, for instance, he would know about the Kempinski brand and make the effort to book in a Kempinski hotel.

Ong said his company is doing what hotels did years back when they wanted to tap the Japanese market – appoint Chinese guest relations officers and Chinese-speaking sales managers who are based in Kempinski properties outside China. This move has led to an increase in bookings from Chinese travellers. Within a year, bookings increased from 0.3% to 4%.

“If you want to increase your business this is the way to do it,” he stressed.

Opinions varied on the suggestion of education for Chinese travellers from session’s moderator, William Bao Bean of Softbank China and India Holdings, China/Hong Kong.

Abacus International’s Mildred said that one should refrain from educating especially among the young travellers. “They are media savvy and will check for information on sites like Daodao.”

She suggested instead working with industry partners like hotels to publish relevant information into their system, so it is available anytime to potential travellers.

Pictured right: Dragon Trail’s Jens Thraenhart

Kempnski’s Ong said that education on certain aspects of a foreign country’s culture was good. For example, tipping policy and observation of “Wait to be seated” signs in restaurants.

Whatever the trend and the habits of the Chinese travellers, one thing is for sure – the Dragon is waiting out there to be tamed.

Featured image credit (ancient Chinese architecture): Ockra/iStock