Pierre Gervois: “Chinese Millennial Tourists in the U.S. might prefer to read travel-related content in English”

Chinese Millennial tourist - Gervois magazineThey speak English now (Just in case you didn’t notice).

They are the millennial Chinese travelers in the United States.

They are the Chinese tourists coming to discover the United States of America and to buy high quality Made in USA products.

They are the Chinese businessmen and businesswomen coming to invest in American companies and create U.S. jobs.

They are the smart Chinese millennial entrepreneurs coming to America to create start ups and contribute to America’s leadership in future technologies.

They are the Chinese guests fed up to be disrespected in luxury hotels when asking if they really can afford to pay for a suite when they ask for one and are offered first the cheapest room available.

They are the Chinese businessmen walking into a bespoke suit company in New York City and asking for a hand made in America suit because they also deserve to wear the finest clothes. (No, they are not only interested in “I Love NY” Made in China T-shirts)

They are the Chinese travelers annoyed to be depicted by U.S. marketing agencies as using only Chinese social media networks such as Weibo and WeChat, when they are actually using Instagram, Twitter and Facebook to stay in touch with their U.S. friends and freely discover the world.

They are the tourists who have spent $40Billion in the U.S. in 2016

They are the LGBTQ+ Chinese travelers wanting to be as respected as any other tourist and find safe places to just be who they are.

They are the Chinese shoppers who find utterly ridiculous when Western luxury brands add a dragon or a Chinese symbol on a watch or a handbag and expect that they’ll specifically want to buy this model.

They are the Chinese tourists who are grateful for the warm welcome they have received by American people when they were doing horseback riding or cowboy shooting. (Yes, they are not only obsessed by shopping in large shopping malls but want to discover the various aspects of America’s culture and heritage).

They are the Chinese travelers who are proud of their Chinese cultural heritage and Chinese language, but who also speak English and prefer to read in English original stories about the United States.

They are the Chinese travelers who are fluent in English and understand exactly what some people say about them when they are traveling overseas.

Actually, they are exactly the same as any other traveler in America.

By Pierre Gervois, Founder of Gervois Hotel Rating, Publisher of Gervois Magazine, Hospitality & tourism keynote speaker and expert about marketing to outbound Chinese tourists.

 

U.S. Retailers now more widely accept WeChat Pay and Alipay, China’s leading mobile payment solutions

WeChatPay - China Elite FocusCitcon, the integrated payment and marketing platform, announced a strategic partnership to enable brands in North America to accept WeChat Pay and Alipay.

WeChat Pay and Alipay are the most popular and convenient payment options for Chinese consumers to purchase goods and services. Adding these payment options to retail point of sale allows brands to now tap into an even larger revenue stream from Chinese consumers who are the largest spender, and fastest growing traveler segment to the North America. The platform enables brands to optimize revenue growth without the costs and hassles of establishing a business entity in China.

WeChat Pay is a fully integrated payment solution within WeChat, the world’s most popular mobile social communications service with 936 million active users and Alipay is a super lifestyle app run by Ant Financial Services Group with more than 450 million active users. Together these platforms jointly account for 90% of China’s mobile payment market share. Both super apps allow users to book a trip, hail a taxi, order food, purchase movie tickets, pay for water and electricity bills, manage investments, perform transactions on e-commerce websites and more to create a cashless society.

“China is changing fast. Mobile payment is the new frontier of commerce and China is leading this trend. By providing an integrated and easy-to-use payment solution, Citcon is creating a future that takes payment and marketing to the next level, empowering global merchants to drive business growth with millions of Chinese consumers.”said Chuck Huang, Founder and CEO of Citcon

As the first payment partner of WeChat Pay and Alipay, in addition to major credit cards such as UnionPay, MasterCard, Visa, Discover and American Express, Citcon is a one-stop shop for merchants to connect with Chinese consumers and accept payments anywhere. Citcon’s stand-alone mobile point-of-sale (mPOS), easy-to-integrate API and software products empower merchants to optimize growth both online and offline, with an easy and affordable rate compared to credit card processing. In addition to the convenient payment solutions, merchants will also be able to gain in-depth consumer behavior insights, manage business performance, run marketing campaigns, guides users to merchants stores while saving their shopping preferences for future visits and manage lifetime customer loyalty programs.

“Accepting WeChat Pay is a smart move for U.S. Retailers. That will definitely help with the category of budget-conscious Chinese travelers who choose to travel in groups. But they must keep in mind that the most affluent categories prefer to pay with their international credit cards, who show their status when traveling overseas and offer more perks in terms of miles and reward points.” commented Pierre Gervois, CEO of China Elite Focus Magazines LLC, a media group specialized in luxury travel publications for very affluent Chinese outbound travelers.

Source: Citcon

Wealthy Chinese travelers favor boutique hotels when traveling overseas

STC Display 2016Among the biggest trends among China’s luxury travelers is the growing popularity of boutique hotels, according to the ILTM Asia event in Shanghai.
With 60 percent of High Net Worth Individuals (HNWIs) reporting that they spend over 3,000 RMB (US$441) per night when they stay at hotels, the future looks bright for luxury hotels catering to China’s growing number of high-end travelers. While large luxury chain hotels remain dominant on the list of HNWIs’ preferred accommodation providers, the report finds that HNWIs now increasingly favor boutique hotels—a clear significant shift from the trend just a few years ago.
For wealthy Chinese travelers, The Ritz-Carlton was the most popular hotel group in 2016, followed by the Banyan Tree, the Four Seasons, Mandarin Oriental, Fairmont and the Peninsula. The luxury boutique hotel group Aman also broke into the top 10, and Chinese HNWIs’ favorite boutique hotel brand, Banyan Tree, keeps climbing on the list of hotel brands preferred among luxury travelers. Hilton, while not topping the overall list, still remains the preferred business hotel for survey respondents. Ritz-Carlton, which tops the list, also has the by far most popular membership scheme among overall luxury travelers and millennial luxury travelers alike at 33 percent and 31 percent membership rates respectively. In comparison to airline membership schemes, hotel membership rates remain low among China’s wealthy. Nevertheless, Ritz-Carlton’s jump in membership rates by 19 percent compared to the year prior indicates that there is substantial interest in membership schemes among luxury travelers given the right incentives.

Advertisement Tower - Gervois Hotel Rating May 2017 featuring Pierre GervoisAccording to Pierre Gervois, Expert in marketing to affluent Chinese outbound travelers and Publisher of the prestigious STC magazine, “High Net Worth Chinese outbound travelers’ behavior pattern is now exactly the same as other HNWI travelers from the U.S. and Europe. They want sophistication, exclusivity, and experiences that money only can’t buy”
Among the biggest trends among China’s luxury travelers is the growing popularity of boutique hotels. With 60 percent of High Net Worth Individuals (HNWIs) reporting that they spend over 3,000 RMB (US$441) per night when they stay at hotels, the future looks bright for luxury hotels catering to China’s growing number of high-end travelers. While large luxury chain hotels remain dominant on the list of HNWIs’ preferred accommodation providers, the report finds that HNWIs now increasingly favor boutique hotels—a clear significant shift from the trend just a few years ago.
For wealthy Chinese travelers, The Ritz-Carlton was the most popular hotel group in 2016, followed by the Banyan Tree, the Four Seasons, Mandarin Oriental, Fairmont and the Peninsula. The luxury boutique hotel group Aman also broke into the top 10, and Chinese HNWIs’ favorite boutique hotel brand, Banyan Tree, keeps climbing on the list of hotel brands preferred among luxury travelers. Hilton, while not topping the overall list, still remains the preferred business hotel for survey respondents. Ritz-Carlton, which tops the list, also has the by far most popular membership scheme among overall luxury travelers and millennial luxury travelers alike at 33 percent and 31 percent membership rates respectively. In comparison to airline membership schemes, hotel membership rates remain low among China’s wealthy. Nevertheless, Ritz-Carlton’s jump in membership rates by 19 percent compared to the year prior indicates that there is substantial interest in membership schemes among luxury travelers given the right incentives.

While authentic and unique experiences are highly sought after by China’s luxury travelers, the same applies to a much lesser degree in terms of accommodation. Only 25 percent of HNWIs interviewed for the report had even considered Airbnb-style accommodation options, and instead preferred private boutique hotels and yachts when considering options other than brand hotels. In fact, only 30 percent of respondents said that they have the impression that Airbnb-style rentals allow them to better experience local life—arguably defeating the purpose of rentals for travelers that put little importance on cost-effectiveness. “I think that in a close future the category of luxury Airbnb’s will attract the youngest generation of Chinese HNWI. Now is the right time for Airbnb owners to promote themselves in China”, Pierre Gervois added.
Instead, boutique hotels seem well-positioned to benefit from Chinese HNWIs’ lust for authentic and unique travel experiences. With accommodation cost of little concern for these travelers, boutique hotels certainly have an exciting future ahead of them in China’s luxury travel market.

Source: ILTM Asia / Skift / Jing Daily / Ritz Carlton

U.S. Retail brands too much focused on Chinese Mobile payment systems and forget to create an emotional connection with affluent Chinese millennial travelers

The growing purchasing power of affluent Chinese travelers is making it more important than ever for luxury brands to adopt marketing strategies to target them. With Chinese third-party mobile payment systems like Alipay and WeChat Pay beginning to set up shop in popular global tourist destinations, catering to this traveling consumer is becoming easier to do, but it’s not a brand’s only option.

Digital intelligence firm L2’s recent report “Cross-Border and Travel Retail: Connecting Digitally with China’s Shoppers” discusses ways brands can be targeting consumers online both during their journey overseas and before they set off.

“[Luxury brands] are under-serving the traveling Chinese consumer, whether it’s through their own brand site and its functionality and capability, their WeChat acShanghai Travelers Club - Bloomingdale's - Jacky interviewcount, or from leveraging things like WeChat Pay and Alipay,” said Danielle Bailey, head of Asia Pacific Research at L2. “It’s a huge missed opportunity for them to not engage on these platforms that Chinese consumers are using all the time. Their phone is their number one travel accessory.”

Brands that do engage consumers digitally abroad with an omnichannel approach are using platforms like Alipay’s “Overseas Travel Channel (支付宝境外游)” to give travelers exclusive gifts, better exchange rates, or let them find deals near where they’re going, all within the app on their mobile device. WeChat’s website within an app feature gives consumers the opportunity to reserve a product online to pick up in a store and access store locators in their own language that they can hand to a taxi driver en route.
But about half of Chinese travelers are doing research on what they want to buy abroad before they leave, and luxury brands have been adopting strategies to target these consumers, according to L2.

In a dissent opinion, Pierre Gervois, Publisher of the STC magazine, a digital travel media in Chinese Mandarin, said “The most important for retailers is not the way Chinese shoppers are going to pay. It’s a technicality. Chinese Customers who want to make a purchase have plenty of options: Cash, credit Cards or WeChat Pay.  The really important thing to do is to convince them to choose a particular retailer”
“Too oftenly, we see U.S. retailers being obsessed by Chinese mobile payment systems when their strategy should be focused on branding their image to Chinese millennial travelers, and create an emotional connection with their future customers, based on their brand values”, Gervois added.

A good starting point is to provide an international store locator on their official online store in China, a strategy about 72 percent of brands employ. However, brands can also take it a step further by adding a Chinese-language travel retail site that let shoppers research the products, compare prices, read reviews, view maps that direct them to duty free shops, and even let them purchase the product online in advance so that they can simply pick it up at the airport if they’re in a hurry.
To help consumers find these pages, brands are paying for search term generated Baidu ads. L2 lists the efforts of beauty brands as an example—many brands pay for cosmetics-related key words, while others, like Lancôme, are taking a more travel-centric approach, targeting consumers researching phrases like “South Korean vacationSTC Bloomingdales 05.”

Some high end retailers, such as Bloomingdale’s, choose a more qualitative approach, and advertise in luxury digital travel publications about the U.S., like the STC magazine, available for mobile but also in digital inflight entertainment.

While maintaining an engaging physical presence in airports and shopping malls is always important for marketing to the Chinese shopper abroad, brands that understand how to make the most of China’s digital sphere are likely going to more efficiently connect with Chinese travelers who are in the process of creating their luxury goods shopping list for their next overseas vacation.

Source: Jing Daily / Skift

Kering Group is struggling with Chinese consumers

Kering, the French luxury group, is adapting its sales approach to better cater for increasingly sophisticated Chinese customers, according to group managing director Jean-François Palus.
“We’ve changed the way we conduct our business in China and the way we address Chinese clients when they’re abroad,” said Mr Palus at the Financial Times luxury conference in Lisbon on Tuesday.
“We learnt that a very serious risk is to become complacent, to think that it’s an easy business, an easy customer base, easy to open stores with good products and then people will come in. That was true for a moment but Chinese customers have become sophisticated and highly demanding and we need to adapt.”
Chinese consumers account for more than 30 per cent of global luxury consumption, according to consultant Bain, which is forecast to increase to 35 per cent by 2020.
How much of global luxury consumption Chinese consumers account for, according to Bain, a figured set to rise to 35% by 2020
In the past, luxury houses relied on rapidly opening up stores in China to fuel growth amid rampant Asian demand for their products, but this approach has been undermined by an economic slowdown in China.
In the final quarter of last year, Chinese consumers showed signs of returning, although notably shopping more in mainland China, while tourism in Europe has slowed in part owing to recent terrorist attacks.
In China, Kering is retraining shop assistants and replacing email communication with WeChat, China’s most popular social media platform with more than 800m daily users.
Mr Palus said: “The way the Chinese treat very important clients is different — they have a very candid approach to wealth.”
He pointed to a recent visit to a Gucci store in Beijing where the store manager told him he had hired the daughter of a billionaire to work with clients in the shop “because to talk to wealthy people in China, you need to be wealthy”. He added that bad feng shui in a shop can hurt client traffic.
According to Pierre Gervois, the Founder and Publisher of the STC magazine, a luxury travel publication for High Net Worth Chinese global travelers “HNWI Chinese clearly signaled about  five years ago that they wanted to purchase luxury goods outside China, to enjoy the full experience of the iconic flagship stores in London, Paris or New York”
“This new trend has not been immediately recognized by luxury conglomerates such as LVMH and Kering, that led to an inflation of store openings in China in the years 2010/2015, with little customer traffic, insufficient staff training, and in some cases damaging consequences in terms of brand image.”, Mr Gervois added.
Kering posted a 31.2 per cent rise in revenues to €3.57bn in the first three months of 2017, lifted by a 34 per cent jump in sales from luxury activities.
Among its brands, Gucci led the way, posting record revenue growth of 51.4 per cent for the three months — the latest sign of improvement under creative director Alessandro Michele. Other Kering brands such as Brioni and Bottega Veneta were doing less well than the likes of Saint Laurent.
Mr Palus said: “The market has become more difficult and the pace of growth has slowed down. In this environment you need to take market share from the competition.”
Kering was not looking at acquisitions, added Mr Palus. “We have so much on our plate with helping our existing brands tap their potential . . . we don’t have enough time to think about M&A.”
He said that Kering was also still adapting to digital platforms. “We need to open ourselves to what’s happening in other industries and other countries. Our industry needs to become less product-centric and become more customer-centric.”

Source: The Financial Times.

Mastercard Report Forecasts Exponential Boom in Outbound Travel from Asia Pacific’s Emerging Markets

Mastercard Bank of China - Gervois Hotel RatingAccording to the Future of Outbound Travel in Asia Pacific (2016 to 2021) report, Asia Pacific markets are expected to grow by 6 percent annually from 2016 to 2021.

Not surprisingly, the largest outbound travel market in 2021 is expected to be China with 103.4 million trips – constituting 40 percent of all Asia Pacific outbound travel, nearly four times that of the #2 and #3 markets being South Korea (25.6 million) and India (21.5 million) respectively.

Eric Schneider, Senior Vice President, Asia Pacific, Mastercard Advisors, commented, “The burgeoning middle class is driving the growth of outbound travel in Asia Pacific, along with other trends such as the emergence of the Asian millennial traveler and on the other end of the spectrum the senior traveler, as well as new technology and infrastructure developments. Asia Pacific travelers will continue to fuel global tourism growth in years to come, providing vast opportunities for businesses to benefit through the development of products and solutions that seek to improve their overall travel experiences.”

Woman reading Gervois magazine in a coffee“The United Sates is durably installed as the #1 outbound destination for Mainland Chinese travelers, for years to come.  With a multiple entry independent leisure visa easier to obtain for Mainland Chinese tourists, They see the U.S. as a leisure destination of choice”. said Pierre Gervois, Founder & President of Gervois Hotel Rating. “I’m pleased to see a growing number of Chinese travelers relying on Gervois ratings to choose their U.S. hotel prior to make a booking on Chinese hotel booking websites”, he added.

Myanmar is projected to be the fastest growing outbound travel market with a 10.6 percent annual growth rate over the next five years, followed by Vietnam (9.5 percent), Indonesia (8.6 percent), China (8.5 percent), and India (8.2 percent). Among developed Asia Pacific markets, the fastest growing are South Korea (3.8 percent), followed by Singapore (3.5 percent), Australia (3.5 percent) and New Zealand (3.4 percent).

According to the study, outbound travel is forecast to grow faster than real GDP. Outbound travel growth tends to be higher than real GDP growth for emerging markets compared to developed markets (except for Japan) where outbound travel growth is much closer to their forecasted real GDP growth. Emerging markets such as Myanmar (10.6 percent vs. 7.7 percent), Vietnam (9.5 percent vs. 6.2 percent), Indonesia (8.6 percent vs. 5.7 percent), Thailand (4.8 percent vs. 3.1 percent) and China (8.5 percent vs. 6 percent) are expected to grow faster than real GDP.

By 2021, all developed markets in Asia Pacific (except for Japan) will have a ratio of over 100 percent for outbound travel trips to total number of households. Households in Singapore (693.6 percent), Hong Kong (248.9 percent) and Taiwan (232 percent) have the highest propensity to travel abroad.

Among emerging markets, Malaysia is expected to record the highest ratio of 198.7 percent by 2021, whereas India (7.3 percent), Bangladesh (7.4 percent), Myanmar (14.6 percent) and Indonesia (15.4 percent) are among the lowest, indicating strong growth potential for outbound travel in these markets over the next ten to twenty years, assuming an increasing propensity to travel is combined with a healthy increase in households.

Mastercard, www.mastercard.com, is a technology company in the global payments industry.  We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories.

Gervois Hotel Rating, www.gervoisrating.com is a New York based hotel rating system for United States hotels publishing guest experience centered reviews and unbiased ratings. Gervois Hotel Rating is independent from hotel chains and hotel groups and is not affiliated with any hotel booking company.

Chinese travelers want personalized service

Chinese wealthy gentleman - China Elite FocusChina’s outbound luxury travelers spend $65,000 per household on tourism per year, including $34,000 on travel shopping, according to a new study from Marriott International.

Chinese outbound tourists have long been a high-priority group for luxury brands, but the demands and habits of younger travelers are changing quickly. The digital natives aged between 18 and 36 years old want a more personalized experience, including superior guest services and smart device integration.

China’s young luxury travelers go abroad between three and four times a year on average, primarily for leisure. While France remains the most popular destination in Europe, Japan is the preferred shopping destination given its proximity and favorable exchange rates, while Australia is the preferred leisure destination.

Australia has long been a developed economy, but it is less commonly seen as a haven for growth than North America, and luxury’s home in Europe has also pushed Australia to the back burner for many brands aiming to capitalize on China’s growing tourism rates. A strong presence in Australia could entice wealthy vacationers to make a purchase.

Moreover, western brands should be aware that summer travel is less common in China. National Day Golden Week travel in the early fall and travels for Chinese New Year are nearly two and three times as likely, respectively.

As with North America’s millennials, China’s young travelers get most of their travel information digitally, largely from official WeChat accounts, underscoring the platform’s importance. C-Trip, Qunar and Tuniu are also popular third-party platforms on which hotels should strive for good placement.

While the above generation is more closely defined by a desire for material goods, a reaction to globalization and advertising in the wake of China’s emergence from poverty, its young travelers strive for more adventurous travel. Hotels and retailers alike should tailor messages to these consumers to emphasize experiential components and offerings.

More specifically, over the next three years global travel is expected to increase 25 percent, while polar exploration grows 32 percent, adventure travel by 52 percent and road trips by 75 percent.

However, personalized service is still the biggest consideration in traveling for luxury travelers. Besides a liking for amenities, being able to choose pillows of different firmness and having a butler or personalized service through digital channels are also important. Seventy-three percent demand WiFi while 55 percent want smart TVs, while unique art and design are also high draws.

With luxury growth stalling around the world and quarterly earnings being largely at the mercy of Chinese tourists and which markets they enter, the country remains the top concern for marketers. As it transitions to a consumer-driven economy, China’s growth has fallen below the double-digits that were beginning to feel normal, but it still offers enormous opportunity.

Chinese residents will make 90 million outbound trips in 2020, with that number increasing by an additional 36 million over the following decade, according to a report by Euromonitor.

Outbound trips have increased on average by an impressive 13 percent since 2000, helping China overtake Japan as the second largest consumer market in 2011. With the significance and size of the Chinese tourist market only projected to swell, brands will need to develop a more nuanced understanding of the market in order to reach consumers. In particular sophisticated native advertisement campaigns in influential digital travel publications catering to China’s super-rich, such as the Shanghai Travelers’ Club (STC) magazine, give good results to reach China’s elite.

However, as brands cater to Generation Y consumers and look to the future, they must be as aware of generational differences in China as they are in the West.

In a reversal of the more materialistic tendencies of their parents, almost 95 percent of Chinese Generation Z consumers say it is essential for brands to be sustainable and environmentally conscious, according to a report by RTG Consulting.

The continued growth of China over the next several years will ensure that its consumers remain prime targets for brands for the foreseeable future, as even a slowed China exceeds the growth rate of western nations. As a result, brands will need to make a connection to this group, the first born in a fully modern China, in the interest of long-term success

Source: TheTopTier