24 Aug 2018
Words Glenn Millar
The Chinese Millennial Traveller
I travelled to China for the first time recently. Naturally, I wanted to visit the iconic sites. But I was also eager to see for myself what is so widely reported in the media – China’s growing world influence and the impact the burgeoning chinese middle class will have on tourism in Australia.
What an eye-opener it was. Naively, I expected China to be less progressive than I found it. In particular, it was apparent today’s younger generation is a new breed that will have a significant effect on our tourism sector.
In discussions with our two tour guides, it became apparent the most important rising market for Australia is the Chinese millennial. So, who are these future travellers, and what do they want?
International industry consultants China Travel Outbound* tell us, because of China’s past ‘one child policy’, they have been treasured not only by their parents, but two sets of grandparents, whose entire financial and emotional resources are concentrated on a single child.
This means, compared to older generations, Chinese millennials are privileged and indulged. They are also more adventurous and worldly than their parents, and well educated. There are more than 100 universities in Beijing alone, and many study in foreign universities worldwide.
Research suggests more than 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 (AUD$18,500 approx.) each on travel annually. Last year, luxury millennial tourists were already averaging around US$65,000 on travel annually.
Reports describe Chinese millennials as “the most important demographic in the world today.” Hard to argue with when you know they already make up around two-thirds of Chinese outbound tourists and, by 2020, are expected to number 300 million.
So, this growing force in the Chinese outbound market is travelling far and spending big. But what are their characteristics and wants, and how can you attract them to your establishment?
In conversation with our millennial guide, who at 27 years old had already visited 10 countries, we learned these millennials are far less interested in the organised tour-style holidays favoured by their parents’ generation.
Instead, they want to travel independently and are seeking out new and authentic experiences.
So, perhaps it is time to reassess any preconceived ideas we may have about the Chinese market. Rightly or wrongly, our views tend to be based on the past and even current wave of Chinese travellers.
These groups have concentrated their activities in capital cities and coastal hot spots like the Gold Coast and Far North Queensland. They take side trips to headline attractions, perhaps the Great Barrier Reef or Australia Zoo, and they stay in traditional hotels.
Their itineraries have often been organised by tour operators with the goal of seeing as much as possible in the shortest time, a practice that often manifests in behaviour Australians might perceive as pushy, impatient and demanding.
Perhaps it’s a product of growing up under Mao Tse Tung and the ‘cultural revolution’. For much of their lives they were subject to tight restrictions and a lack of freedom or opportunity. So, now they’re making up for lost time.
The first significant rise in international inbound tourism to Australia began most famously with Paul Hogan’s ‘shrimp on the barbie’ campaign. Since then we’ve seen various markets surge – the Japanese in the 80s, Middle Eastern travellers in the 90s.
China has been our latest and greatest growth market. In fact, for the first time in April this year, China overtook New Zealand as our largest inbound visitor market. (Source: Australian Bureau of Statistics (ABS)
We saw a record 1.39 million Chinese visitor arrivals for the year ending February 2018, an increase of 13.2 per cent on the previous year.
But consider this, that figure represents only 0.1% of China’s total residential population, and Australia receives just 1.5% of all Chinese tourists travelling abroad.
Still China has been our most valuable inbound tourism market since 2011, with visitors spending a record $10.4 billion in the year ending December 2017. Under Tourism Australia’s strategic plan, that figure is set to jump to $13 billion by 2020.
Trade Minister Steven Ciobo says China's increased prosperity is forecast to fuel another trebling of visitor numbers over the next decade to 3.9 million by 2026-27.
But, in contrast to the Chinese travellers we’ve known to date, these will be more independent, adventurous and affluent. Priorities are shifting, with many Chinese tourists now preferring leisure, adventure and eco-tourism to shopping.
So, in this regard, I believe we are entering a new phase in the growth of Australian international inbound tourism.
According to Hotels.com’s annual Chinese International Travel Monitor (CTIM), Chinese travellers have embraced the ‘more’ mentality: they’re travelling more, spending more time on travelling, travelling to more locations, having more exotic experiences and, inevitably, spending more.
For post-90s millennials, Australia is still viewed as an exotic destination that offers experiences they can’t find at home, with many nominating beaches, the Great Barrier Reef, farms the Outback, and quokkas on Rottnest Island as must-do experiences.
This means exciting prospects for the management rights and serviced apartment industry and operators of smaller regional accommodation who have been largely unable to compete in the bulk tour market.
Now, there are definite opportunities to forge new pathways to maximise opportunities arising from this emerging next-generation Chinese market.
But the resources necessary to promote our unique offering and build equity in regional tourism are not insignificant. It is a challenge, should we choose to accept it, that our industry will need to pursue collectively.
Still, that doesn’t mean you can’t take your own steps to capture a slice of this massive market. As part of this feature, I’ve included a case study from one Noosa operator who cleverly tapped into another niche market – the education visitor.
The success they’ve enjoyed, with a relatively small but targeted effort, should inspire other small and independent accommodation operators to give it a go.
* ‘How to attract 300 million Chinese millennials’, by Helena Beard, chinatraveloutbound.com