Saturday, July 13, 2024

Chinese travelers increasingly using apps, social media for trip planning, led by Gen Z women

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When it comes to learning about destinations and planning trips, Chinese travelers are increasingly using travel applications like CTrip and Qunar and social media sites like Xiaohongshu and Douyin, the Chinese counterpart to TikTok.

That’s one of the findings in a new report from China Trading Desk, which polls 15,000 Chinese quarterly about their overseas travel plans.

Its first quarter survey found that while 40% of all Chinese travelers plan trips using these sites, there is a clear preference among travelers aged 18 to 29 for Xiaohongshu, which has been called “China’s Instagram.” When it comes to booking, CTrip is the clear favorite for travelers of all ages.

“This digital integration extends into the realm of shopping, where platforms like Xiaohongshu and Douyin play pivotal roles in shaping travel itineraries and experiences,” said China Trading Desk founder and CEO Subramania Bhatt. “Our report shows that travelers are not just using apps and social media to plan trips but also plan shopping excursions once they reach their destinations.”

Part of the digital integration may be due to the demographic makeup the consumers from China who are driving a post-COVID resurgence in travel. The new survey “showcases a market that is not only rebounding but also redefining itself through the lens of its travelers,” the report stated.

That lens is displaying a youthful set of travelers. The survey showed that two-thirds of outbound travelers were under the age of 30, and nearly that many were women, while those ages 40 and above accounted for just 9% of outbound travelers.

“China is home to a new generation of digital nomads in search of culturally meaningful experiences, and they are bringing China’s outbound travel business to life,” Bhatt said. “These young travelers use social media to learn about destinations, and then they book without excessive planning. A large number are young, female and educated. And many are traveling solo.”

China’s turn at “revenge travel”?

Before COVID, China sent more travelers into the world than any other country, with 1-in-9 international visitors carrying a Chinese passport in 2019. While three years of a zero-tolerance approach to the pandemic all but snuffed out China’s international travel, the China Trading Desk report suggests 2023 signaled a turnaround that’s likely to escalate.

That reinforces many of the projections in the Phocuswright report, “China Travel Market Report 2022-2026,” which said total gross bookings in China wouldn’t exceed pre-pandemic levels until this year.

“It will take time for China’s travel industry to overcome the supply-side effects of three years of isolation, even as demand for travel is unlocked,” according to the report, written by Gary Bowerman, a Phocuswright research analyst specializing in the Asia-Pacific region.

China’s prolonged zero-tolerance approach to COVID meant that while much of the rest of the world was enjoying a “revenge travel” spree, total gross bookings in China nosedived in 2022 to $90 billion, barely half of its pre-pandemic level of $174 billion in 2019, according to the Phocuswright report, which projected bookings of $185 billion this year.

Ironically, the term “revenge travel” emerged on Chinese social media in the second half of 2020 when young people discussed traveling again after COVID, Bowerman said.

“Circumstances in China prevailed against revenge travel becoming a reality until the start of 2023, and there has been a phased unlocking of travel demand ever since,” he said.

Yet Bowerman believes the phrase has become dated and less relevant in China.

“Pre-pandemic, travel had become integrated into the ideal of a modern lifestyle among urban Chinese – and, after a slow start in 2023, we are seeing that re-emerge and redevelop,” he said. “Travel demand patterns are unlikely to fully ‘normalize’ in 2024, but by the end of the year we will have consigned ‘revenge travel’ to history.”

Gen Z and younger millennial women are driving much of that demand. The new report found 62% of outbound travelers were female, while 39.5% were between the ages of 18 and 24 and 27.4% were between the ages of 25 and 29. And nearly 70% of travelers booked tickets less than a month in advance, indicating a move toward spontaneity.

China’s domestic travel also likely to boom

While the demographics promise continued growth for international travel from China, it will be competing with the lure of domestic travel in a continent-sized country with the world’s second-largest aviation market and the world’s longest high-speed rail network.

Bowerman called that one of the key trends to watch this year, as domestic travel and tourism in China have evolved and diversified considerably over the past four years.

“Chinese destinations have become more adept at understanding the aspirations and expectations of Chinese travelers who want to see more of their own country,” he said. “High-speed rail and self-drive travel are more widely available and more smartly marketed via social media as intrinsic elements of the domestic trip experience. They also give travelers more control over their own itineraries.”

Yet the sheer vastness of the market leads Bowerman to conclude demand will be great enough to see strong growth in both domestic and outbound travel this year. The only question is where will those travelers go?

Quote

Pre-pandemic, travel had become integrated into the ideal of a modern lifestyle among urban Chinese – and, after a slow start in 2023, we are seeing that re-emerge and redevelop.

Gary Bowerman – Phocuswright

The China Trading Desk report had some ideas.

Its first quarter survey found that Singapore maintained its title as the top destination for Chinese travelers, with more than 15% of all outbound travel. Thailand was next with 13.6% followed by South Korea at 12.4%. The proximity of the most popular destinations didn’t surprise Phocuswright’s Asia expert.

“Chinese [online travel agencies] talk about a ‘four-to-five-hour flight radius’ as the primary market for flight sales, and that makes absolute sense – given the majority of Chinese travelers take relatively short trips [less than a week] often focused around public holidays,” Bowerman said.

He also noted that Southeast Asia countries promote visa-free access for Chinese travelers — something they lack when trying to visit the United States or Europe. That contributes to the muted interest in travel to the U.S., where only 4.2% of outbound travelers visited in the first quarter, according to the China Trading Desk report. Europe saw 10.6% of outbound travelers.

“Geopolitics has certainly impacted the flight capacities [both ways] between China and the U.S., but we have seen some expansion as the summer holidays approach,” Bowerman said. “A major issue in 2023 for European travel was backlog in processing visas for Chinese visitors. Gradually, both issues will ease, as travel is recognized globally as a vital driver of economic activity in a fragmenting and fractured world. That said, it would be a major surprise if the U.S. or [European Union] were to offer visa-free access for Chinese travelers.”

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