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The Chinese Luxury Traveler - How destinations are decided and bookings made.
Friday, 13th June 2014
Source : Hurun Report
 

Background: Chinese outbound tourists in 2013 increased by close to 18% to 98 million, according to the National Tourism Administration, making China’s outbound market now the largest in the world;

Within this big picture, the number of Chinese luxury travelers has also grown to record heights based on the growing number of Chinese millionaires. 

Today there are 2.9 million dollar millionaires in China, a year on year increase of 3.6%, according to a recent report by the Hurun Research Institute.

Travel is still the most popular leisure pursuit for Chinese HNWIs; they are busier than ever with business trips. They were on the road an average of 7.5 days per month, half a day more than last year. For the Top 10% richest, they were on the road 12 days per month, 3 days more than last year. This has resulted in slightly less time for leisure travel.

The report found that for those luxury travelers who have been to 40 countries or more, they spent 36 days abroad last year, half for leisure travel.  Driving tours within China are becoming increasingly popular, with 43% replying they went on a driving holiday last year. 66% consider medical tourism. The Caribbean is the most popular destination for luxury cruises, although Antarctica and the North Pole are fast-growing.

4Hoteliers Image LibraryRupert Hoogewerf (right), Hurun Report Chairman and Chief Researcher said: "Experiential travel rather than just shopping tours are becoming more popular now that the Chinese luxury consumer has traveled more widely.”

Alison Gilmore, ILTM’s Senior Exhibition Director commented: ”The pace of the growth in this region is remarkable, not just in the numbers that are able to travel, but also in the numbers that want to travel. Where they want to go and what they want to experience is the key question.  ILTM Asia 2014 will profile those that are shaping the next generation of global travel and the diverse demands of the new Asian traveler.  We are delighted to be once again working with Hurun Report in highlighting these important Chinese high net worth consumer trends.”

Paul Hicks, GHC Asia CEO, said: “As a leader in providing public relations and marketing services to the luxury travel industry in Asia and beyond, GHC Asia is proud to collaborate once again with Hurun Report on this year's white paper and to provide research support in this important sector of the industry.”

How destinations decided and bookings made for ‘My Best Trip’

The report found that for luxury travelers who have been to 40 countries or more, their best trip for last year was inspired by word of mouth (45%), followed by family recommendations (20%) and luxury travel agencies (16%). For this trip, they traveled with friends (49%) and family (46%); sightseeing was the main purpose. They travelled for 12 days in a group of five people. 34% flew business class.

58% of the destinations are decided by themselves; hotels are booked via a friend (37%) or by themselves (34%). Hotel bookings were mainly through travel agents (50%) and third-party online booking sites (28%).

Destination Inspiration

  • 58% made the decision on their destination themselves, with word of mouth recommendations most important, 45%; family suggestions, 20%; travel agencies, 16%
Planning the Route
  • Planning the route with a travel agency was most popular
  • Travel agencies, 31%; online research, 28%.
  • Travel purpose: tourism, 29%; cultural experience, 15%
  • People accompanying: friends, 49%; family, 46%;
  • Itinerary: Private customization, 43%; own plan, 42%
Making the Booking
  • Hotel booking: friends, 37%; themselves 34%
  • Booking method: travel agencies, 50%
How destinations decided and bookings made: Chinese New Year
Luxury Traveler
The report found that for luxury travelers who have been to 40 countries or more, 54% traveled overseas during Chinese New Year 2014, a 7% increase over last year. Short-haul destinations such as Thailand, Bali and Cambodia, and long-haul travel destinations such as the United States, Australia and Dubai were popular choices. One in ten went on a driving holiday.

72% were accompanied by family members, averaging four, and they mainly traveled for 10 days. One in two flew business or first class.

More than half decided on their destination by themselves, and 37% were decided by their family. Half booked the itinerary and hotels themselves, with 20% booked by their family. On-line booking was the main booking method accounting for 42%, whilst booking via travel agencies, hotel web-sites and locals was most common for hotel booking.

Destination Inspiration
  • Family advice is the most important travel motivation factor
  • 52% comes from family suggestions; friend’s referral, 23%
Planning the Route
  • Source: Internet, 44%; travel agencies, 33%
  • Destination decision making: self-made, 54%; family, 37%
  • Travel purpose: tourism, 25%; cultural experience, 14%
  • People accompanying: family, 72%; friends, 24%
  • Itinerary: own plan, 68%; Reference guide, 12%
Making the Booking
  • Hotel booking: own, 50%; family, 20%
  • Booking method: third party online booking, 42%; travel agencies, 28%
(Source: 2014 Survey on China’s High-end Tourism by Diadema and Hurun Report)

Hotels: Location, Brand and Price

Geographical location, hotel brand and room rate were most important for the Chinese luxury traveler, followed by hotel facilities, restaurants and service.

Shangri-La is the preferred hotel brand for the tenth year running, pipping a strong performance from the Ritz-Carlton.

Table: Preferred Hotel Brands of the Chinese HNWI
4Hoteliers Image Library
Source: Hurun Report Chinese Luxury Consumer Survey 2014

Medical Tourism

66% now consider medical tourism. Of those, 47% chose to go to Europe and the US. The first choice is Switzerland (59%), followed by the US (22%). Of the 28% choosing Asia, the first choice is Japan (44%), followed by Hong Kong (24%). Within China, 16% make Beijing their first choice (25%). Another 9% chose to go to the seaside for convalescence, and of these 72% chose the Maldives.

Convalescence was their main reason for medical tourism (39%), and 34% for medical checkups. 21% went for anti-aging reasons, mostly female.

For the health of their parents, 25% chose to send their parents travelling. Some 20% choose to give health care products to their parents, and 19% help parents contact doctors.

Top 10 Chinese Outbound Luxury Travel Agencies 2014

This year’s Top 10 are (in alphabetical order): 8 Continents, Caissa, CITS, Ctrip, CTS, Diadema, Farers International, HH Travel, My-Tour, Zanadu.

In April 2014, Hurun Report and GHC Asia, a leading PR agency, surveyed 35 senior global hoteliers to compile this list of leading Chinese outbound luxury travel agencies

Must-Do

In terms of travel themes, adventure travel and self-drive tours led the way.

When asked their ‘must-do’ travel plans for the next three years, South America (especially Bolivia) took 36% of the vote, followed by Polar trips 34%, Africa, Cuba and Mexico.

Luxury cruises to the Caribbean

26% want to go on a luxury cruise, of with 48% want to go the Caribbean, followed by the Mediterranean at 43%; and the Arctic and Antarctic on 32% and 29%.

Space Travel

7% claim to want to travel to space within the next three years. 44% want to see earth from space, followed by the thrill of being an astronaut 18%.

Travel is Still the Preferred Leisure Pursuit for Chinese HNWIs

Travel is still the preferred leisure activity for Chinese HNWIs, whilst swimming and golf continue to be the most popular sporting activities. Jogging has risen to 3rd place, resembling more the Western concept of fitness regimes, whilst for female HNWIs yoga continues to be most popular. (Source: Hurun Report Chinese Luxury Consumer Survey 2014)

Preferred Luxury Travel Destinations: Australia fights off France

Australia replaced France to top the list of preferred international luxury destinations. France has been top for the past 3 years. Dubai jumped from 8th to 3rd, whilst the Maldives rose to 5th place.

Domestically, Sanya has been the most popular domestic tourist destination for 4 consecutive years. Although it remains in 1st place, the proportion of HNWIs choosing to travel there has decreased somewhat. Hong Kong maintains its rank at 2nd place while Macau rose 2 places and is ranked 5th this year. Yunnan made the top 3 for the first time.
4Hoteliers Image Library
Source: Hurun Report Chinese Luxury Consumer Survey 2014

Travel Retail: Chinese widen gap on second-placed Russians

Mainland Chinese are the biggest shoppers for luxury for the fourth year running. They widened the gap with Russians.  Indonesia jumped to third place. Fashion purchases jumped significantly. (Source: Global Blue statistics on Chinese Traveler’s Tax Free Shopping Spending 2013. Global Blue is a leading tax-refund organization; data does not include tax-free shopping at airports and data only represents spending by Global Blue members.)

Travel Gift Vouchers

Gifting is the number one factor driving Chinese travel shopping.

For men, red wine and watches are the preferred choices for gifts under RMB 20,000, with imported spirits, such as whiskey and cognac, up two places into 3rd place. For women, the preferred choices are jewelry, fashion and watches. Travel vouchers rose fastest, ranking 4th this year. When selecting gifts for the elderly, more than half of all individuals chose healthcare products, followed by travel vouchers and houses. For children, consumer electronics ranked top, followed by clothing. The super-rich had a tendency to gift travel vouchers to women.

For the first time, Louis Vuitton has lost its crown as the preferred brand for gifting by men, losing out to Hermès. Chanel continues as the preferred brand for gifting by women. Moutai is – for the third year running - the only Chinese brand that made it to the list, but it has fallen one place to 14th. Whilst leather accessories proved most popular overall, jewelry brands had a bad year in the gifting market. (Source: Hurun Report Chinese Luxury Consumer Survey 2014)

Overseas Study and Immigration Drive Outbound Travel

Millionaires send their children abroad to study at an average age of 18 years old, whereas among the Top 10%, the average age is 16. For pre-university education, 28.7% say UK is the destination of choice, whilst the US remains at the top for post-graduate education at 36%.

The number of high net worth individuals who have emigrated, or are planning to do so, rose from 60% to 64%. It is worth noting that of the 64%, only 15% are looking to give up their Chinese nationality, with the majority looking to a permanent residency overseas.  (Source: Hurun Report Chinese Luxury Consumer Survey 2014)

Hurun Report and Luxury Travel

Hurun Report is proud to be the official media partner of ILTM Asia in Shanghai for the eighth year and ILTM in Cannes. Hurun Report presents annual awards to the best hotels and best new openings within China and its important cities. The Hurun Presidential Suite Awards recommends the best presidential and chairman suites of hotels.

In 2010, Hurun Report hosted a photo exhibition entitled The World at Their Fingertips: Ecotourism Through the Lenses of China’s Entrepreneurs, showcasing works from six Chinese billionaire entrepreneurs with a passion for ecotravel.

In March 2014, Hurun Report published its second report promoting yacht charter: The World’s Fastest Charter Yachts 2014, following on from The World’s Largest Charter Yachts 2013

Read the full report HERE

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