Hurun Report has cooperated with ILTM Asia to publish The Chinese Luxury Traveler 2013. This report attempts to calculate the number of Chinese luxury travelers, evaluates their consumption patterns, travel habits as well as key market trends over the last year. In addition, this report analyses the purchase of luxury products and examines the impact of Chinese wealth overseas.
Chinese luxury travelers are going overseas less, down to an average 2.8 trips a year. The frequency of travel is slightly higher in First Tier Cities. The internet and magazines are the main sources of information when deciding travel destinations. Chinese luxury travelers are going overseas in smaller groups, most often in a group of three to ten people. Expenditure on hotel rooms is higher than the global average and Chinese tourists are the largest travelling nationality in the world for the third year running – and have widened the gap with second place.
Alison Gilmore, Event Director, ILTM Portfolio, said: “ILTM events are trade-only hubs created exclusively to develop the business of bespoke luxury travel. Agents and buyers attending ILTM Asia from across the region will have the opportunity to ensure they’re ahead of the game in meeting their clients’ increasing demands during three days of face to face pre-scheduled appointme nts, educational seminars and business networking.”.
Pierre Gervois, CEO of China Elite Focus and Publisher of the Shanghai Travelers’ Club magazine said “The new generation of luxury Chinese travelers is changing the game in the luxury hospitality industry. They are now very experienced international travelers, with the most important purchasing power compared with any other nationality. Influencing their choices of hotel brands and destinations is critical for luxury travel and tourism marketing executives.”.
According to statistics provided by the National Tourism Administration, the number of Chinese outbound tourists in 2012 was a staggering 83 million, an increase of 18.4% year on year. China’s outbound tourism market is now larger than that of Germany and the United States, putting it firmly on the map as the world’s largest outbound tourism market. It is expected that China’s outbound market will continue to grow throughout 2013 with numbers reaching 94 million, which translates to a year on year rise of 15%. A key reason for the increase in the number of luxury travelers is the increase in Chinese HNWIs. At present, there are 2.8 million US$ millionaires in China, a year on year increase of 4%.
One hundred HNWIs were asked about their travel habits from the period of March and April 2013. Most of those surveyed are from Shanghai and Beijing, with 80% being male and an average age of 37 years. Data collected also includes B2B data through investigating domestic travel agencies and international hotels from ILTM’s database.
The Decision Making Process The internet and magazines are the most important media channels for seeking out travel information. 60% of HNWIs will make the decision themselves, usually traveling with family or friends for the purpose of sightseeing, but increasingly for business. The most important factor when choosing a hotel is the location and brand.
Bookings are made by the HNWIs themselves or by a family member and the logistics are taken care of by an assistant through third party online booking sites. Business travel is mainly scheduled through local business partners.
Destination Inspiration: Internet and magazines main channels
83% on the internet every day
91% are in the habit of reading monthly magazines
Travel Formulation Trends
Destination decision:Themselves 60%
Travel companions:Family 40%;Friends 20%
Travel Purpose:Sightseeing 45%;Business 43%
Hotel selection:Location 61%;Brand 58%
Hotel bookings: HNWIs themselves 38%;Secretary/assistants 30%
Personal travel hotel booking:Third party online booking sites 22%
Business travel hotel booking:Local business partners 24%
Although Spring Festival and the October holiday are still popular travel times, there is not one particular time when Chinese HNWIs do most of their traveling; rather they tend to stagger their trips in order to avoid peak periods.
Most package tours last for 9.8 days on average and most consist of between three to ten travelers (53%). 43% of travel groups contain over ten individuals. Trips overseas last for an average of 7.4 days with 63% in the five to eight day travel time bracket. On each overseas trip, Chinese travelers visit one or two countries and the preferred destination is France, followed by the US. Family, friends, and the entrepreneurs themselves control the booking process. The deciding travel factors are shopping, culture, cuisine, and finally business potential. 43% of Chinese travelers spend over US$5,000 (excluding flights) per trip, and 11% of them spend over US$10,000.
Tour group sizes are generally smaller for luxury travelers who are spending over US$10,000 (excluding flights). On average there are 7.1 people per group and only 16% of tour groups are larger than ten travelers. For big spending travelers, trips are usually longer, all over five days and half over eight days, with the average trip time being 9.6 days. Most fly business class and inChina prefer Air China and internationally Singapore Airlines. Their preferred destination is France, followed by Switzerland. Most travel with family but also with alumni associations and private clubs.