How to attract 300 million Chinese millennials
They’ve been called “the most important demographic in the world today”. They make up around 2/3 of Chinese outbound tourists and by 2020, they will number 300 million. This growing force in Chinese outbound tourism is travelling far and spending big – but who are the Chinese millennials and how can you attract them to your destination, hotel or visitor attraction? We look at the characteristics of Chinese millennials, how they plan their travel, and what attracts them.
Who are Chinese millennials?
Chinese millennials are commonly defined as those Chinese born in the 1980s and 1990s, so they range in age from 17 to 37. Thanks to China’s one child policy, they are the beloved focus not just of their parents, but also of two sets of grandparents, whose financial and emotional resources are concentrated on this single child. By comparison with older generations, Chinese millennials are privileged and indulged. They are also more outward-looking than their parents, and some have studied overseas or at foreign schools in China. Indeed, 74% feel they have more in common with their age group globally than older Chinese.
Money to burn
Some, but not all, Chinese millennials are from wealthy families, and there are two key reasons why they have more ‘money to burn’ than their North American and European counterparts. Firstly, they have no student debt – tuition fees and living expenses are paid for by their families. (Contrast this with the USA where more than 7m student borrowers are already in default). Secondly, many Chinese millennials have no housing costs. Around 90% of Chinese households own their homes, and about 80% do so without mortgages or other loans, partly because Chinese culture takes a dim view of borrowing.
This young, middle-class group are, however, happy to take on non-student debt. Far from saving a portion of their income like their parents, they are China’s first generation whose need for instant gratification is driving them to (short-term) debt. They pay using credit cards and extended credit deals from platforms such as Alibaba and JD.com – and even peer-to-peer loans via WeChat. They are sometimes known as the Moonlight Generation, because their bank accounts are always light at the end of the month. But most know that their parents will bail them out if they need more cash.
Independent travellers seeking authentic and unique experiences
Millennials are in the vanguard of change in the Chinese outbound tourism market. Second generation travellers, they are less interested in the group trip ‘tick box’ tourism of their parents’ generation, and are instead travelling independently and seeking out authentic experiences.
According to a recent Trip Advisor survey, 9 in 10 Chinese millennials had booked their most recent trip in components. More than 3.5 million have used Airbnb outside China. 47% are interested in natural, cultural and historical attractions.
Chinese millennials are more confident about travelling overseas than their parents. They are exploring by train, visiting historic houses, touring the countryside, staying in boutique hotels and buying heritage goods. 100,000 Chinese tourists visited Edinburgh Castle in 2014.
They’re travelling far and wide too; Morocco saw a tripling of Chinese tourists after it removed visa restrictions in 2016. India is rising up the popularity charts, and polar cruises have recently been in vogue.
Shopping, eating and drinking
While Chinese millennials rarely make a choice of destination based on shopping options, they will still include time for shopping in their itinerary. Luxury and heritage goods are a big draw, with Chinese millennial luxury travellers allocating US$34,000 on holiday shopping. Additionally according to research conducted by MasterCard, about 2/3 of Chinese millennials favour Western brands over Asian ones. Therefore, shopping is highly appealing for Chinese millennials visiting Europe.
What do millennials choose to eat when travelling? On the one hand, young Chinese tourists like to try the local cuisines of their chosen destination – being more curious and open-minded than their elders. This is mixed with familiar foods with a traditional Chinese hot pot being highly regarded. However, unlike older Chinese tourists, a buzzing social life means Chinese millennials rarely spend more than one hour dining.
Experiential and luxury travel
Chinese investment of US$40million has been earmarked to build a luxury base camp on Mount Everest, aiming to capture a millennial market which increasingly prizes experiences. Unique or truly unusual experiences are attractive for their scarcity – and even more compelling if they provide great content for WeChat or Weibo. Experiences ranging from underwater hotel rooms and restaurants in the Maldives to short breaks to Iceland have proven popular recently.
And for Chinese millennials, experiential travel does not have to be cheap. WildChina ran a ‘luxury hike’ up Mount Kilimanjaro in 2015. There were 10 customers, 72 porters and 7 chefs.
Trends in Chinese millennial travel
Research for Melia hotels in 2016 found that hotel choice is very important for this segment, with millennials looking for room condition, service, location, high-tech facilities, and design and style in that order when deciding where to stay. Unsurprisingly, speedy Wifi is vital; this group spends 27 hours/week online on average.
Top destinations in 2016 included Seoul, Bangkok, Tokyo, Paris and the Maldives, with London and the UK sprinting up the popularity charts thanks to the favourable exchange rate in the second half of last year. In more familiar destinations, Chinese millennials are discovering new regions and cities driven by a search for novelty, authentic experiences and a desire for compelling content for WeChat and Weibo.
Recent years have even seen the emergence of ‘lung cleansing trips’ as millennials sought fresh air destinations from exotic Thai islands to chilly Iceland to escape China’s noxious smog levels.
The future of Chinese millennial travel
Over half of Chinese millennials plan to holiday for longer periods and spend more money on travel in the future. A recent study by the Singapore Tourist Board estimates that Chinese millennials will soon spend upwards of US$14,000 on travel annually. Luxury millennial tourists already average around US$65,000 on travel annually.
Millennials want their families to share in their international travel experiences too. ‘Family reunion’ and multi-generational trips are on the rise as children want to spend quality time with their families on overseas holidays. Unsurprisingly, these large family groups form very attractive prospects for destinations, hotels and visitor attractions.
Are you ready to attract 300 million Chinese millennials to your destination, visitor attraction or hotel? In next week’s blog, we will discuss some of the best ways to market to them.
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