Navigating the New Era of Chinese Tourism

January 8th, 2023, marked a significant turning point for China, as it ended its stringent COVID-19 measures. This unexpected shift had global implications, especially for the luxury goods market. However, the reopening was not without challenges. Despite the immediate surge in confidence, a shortage of flight capacity and delays in passport renewals and visa applications have hindered the full recovery of international travel, with projections extending to the second half of 2024.

Golden Week Boom and Destinations in Demand

China’s National Day holiday coincided with the Mid-Autumn Festival, creating an eight-day ‘Super Golden Week.’ During this period, domestic tourism trips reached a record 896 million, with a staggering 138% year-on-year increase in revenue. Early bookings for outbound travel highlighted popular destinations, with cities like Taipei, Macau, Seoul, Singapore, and Tokyo topping the list.

Diverse Consumer Typologies and Luxury Market Resurgence

The Chinese traveler landscape has evolved, presenting diverse consumer typologies. From independent millennials and Gen Z “Sea Turtles” to affluent 60+ “Silver Splurgers” and clout-driven HNW Gen Z & Millennials, brands must adapt to these varied consumer groups. Despite the disruptions caused by the pandemic, the luxury market is experiencing a resurgence, with Chinese consumers expected to drive 60% of total spending growth on luxury items by 2030. Affluent travellers are making a cautious return, emphasizing experiential travel and allocating nearly half of their travel budget to shopping.

Tax-Free Shopping Impact and Changing Trends

The removal of tax-free shopping in the UK had a profound impact on Chinese tourist spending behaviour, with over half diverted their spending to other European destinations. Additionally, there’s a notable shift in Chinese tourism trends, with the rise of independent travellers seeking unique experiences. The focus is moving away from traditional sightseeing to more personalised, experiential journeys.

Emerging Demographics and Consumer Shifts Post-Pandemic

New trends are emerging in response to evolving pressures. The “Run Philosophy,” reflects a desire for exploration, long-term vacations, and remote working. Students, a demographic often overlooked, play a crucial role in travel decisions, both as spenders and influencers. Post-pandemic, Chinese consumers seek experiential travel, celebrating milestones, and exploring a range of interests, from culture and history to health and wellness.

In navigating this dynamic landscape, brands should adopt a multifaceted approach. Understanding and catering to diverse consumer profiles, adapting to changing preferences, and aligning marketing strategies with the newfound interests of the Chinese traveler are crucial steps toward success in this evolving era of tourism.

Digital Transformation of the Customer Journey

In China, the digital customer journey has evolved into a dynamic and interconnected wheel. The journey begins on various social commerce platforms, weaving seamlessly between stages within specific channel ecosystems. This customer-centric model emphasises user-generated content, reviews, and influencer engagement, placing a greater focus on entertainment and engagement rather than simple exposure through paid advertising.

Technology's Integral Role in Luxury Travel

Digital Channels and Direct Engagement

In the digital realm, Chinese travellers are more direct in terms of booking and brand engagement. Online Travel Agencies (OTAs) like Ctrip and Qunar dominate outbound trip planning, making it crucial for brands to audit and maintain a strong presence on these platforms. Alibaba’s Fliggy emerged as a standout success during the pandemic, leveraging livestreamed tours to reach millions. WeChat remains a vital channel, and the importance of review sites built on UGC cannot be overstated.

Key Platforms: RED and Douyin

Two standout platforms in China’s digital landscape are RED and Douyin, especially for travel inspiration and planning. Douyin, China’s counterpart to TikTok, has become a major source of inspiration for younger travellers, with an increase in searches for travel-related content.

Daka Tourism and Cultural Connections

The rise of Daka Tourism is reshaping travel trends. Social media platforms like RED and Baidu play a crucial role in this trend, emphasising unique, trendy, and Instagrammable locations. Brands can capitalise on this trend by collaborating with influencers and creating PR-worthy installations, aligning with the desire for immersive and shareable experiences.

Live-Streaming and Immersive Experiences

Live-streaming has become a powerhouse in China’s digital landscape, with millions tuning in and billions transacted through livestreams. Platforms like Douyin and Fliggy have excelled in this space, partnering with a variety of institutions to create engaging content.

Strategic Brand Engagement

Brands seeking to engage Chinese travellers must adopt a proactive approach. Leveraging social media platforms, engaging with influencers, and creating captivating content are essential. The focus should extend beyond national holidays and cyber holidays, with an emphasis on gifting, self-gifting, and personal fulfilment. Consistent campaigns throughout the year are vital for deepening engagement with high net-worth individuals.

In navigating China’s digital travel landscape, brands should embrace the interconnected, consumer-centric nature of the journey, leveraging advanced technologies, and strategically engaging with key platforms and influencers.