China’s Tourists to Overtake Japan’s: How the Chinese Traveler is Being Underserved in Western Markets

13 April 2011

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Assistant Editor's Note: The following excerpts and discussion are based on an article by Alexandra Stevenson which was originally published in beyondbrics, a blog about emerging markets in the Financial Times. The article draws upon information from a new report by Boston Consulting Group (BCG), entitled Taking off: travel and tourism in China and beyond.

The BCG report reveals that about 25 million Chinese take their first overnight leisure trip annually - a number that will double in the next nine years, bringing the Chinese market to a valuation of $590 billion by 2020. These Chinese travelers are beginning to buck stereotypes and spend more of their income on both domestic and foreign travel. Domestically, experts say that China's domestic travel market will quadruple in size by 2020, and accommodation demand will double. By the same year, Chinese travelers will outspend Japan's, making it second only to the US in the travel industry.

That’s because Chinese travellers are already willing to pay 8 per cent of their annual income on a single domestic trip. This is more than any other emerging market and much more than what a traveller from a developed country is willing to spend (on average 2 per cent of yearly income).

Chinese interest in international travel, while still comparatively small, will increase 17 per cent annually over the next decade.

The BCG report posits that Chinese travelers' preferences are unique and currently undeserved internationally, providing real opportunity for profit to foreign companies who seek to understand and adapt to these preferences. Chinese travelers:

  • Tend to travel in larger groups
  • Are younger than the average U.S. and U.K. travelers
  • Plan their trips on much shorter notice (39%  of US travelers polled by BCG said they began planning 3 months ahead, compared with 4% of Chinese)
  • Put a high priority on baggage delivery from airport to hotel, a service that does not even make the average top ten priorities in the US
  • They value the exclusivity of priority lounges and priority security lines
  • Are generally dissatisfied with travel and tour options, citing complex online booking systems as a top complaint
Stevenson says:
A few companies have addressed these concerns and in return have reaped the benefits. China’s leading travel website Ctrip, which offers online booking and ticket delivery, allows customers without a credit card to pay cash. Club Med is also gaining loyal customers by putting emphasis on building relationships with their customers.

This is just the tip of China’s tourism iceberg. Those interested in tapping the market should pay close attention to a continually changing sector.

Read the entire article, China's Tourists to Overtake Japan's