Young Chinese outbound travelers are changing norms by traveling farther distances, booking and shopping via mobile, and shying away from escorted group travel, according to data from Phocuswright.
GLOBAL REPORT—Young travelers are changing China’s outbound travel market with more preference for mobile booking and shopping, and have an interest to travel farther distances.
“We’ve watched (China’s) travel market more than triple just since 2008, and the online market go from almost nothing to about a third of travel bookings,” said Maggie Rauch, senior research analyst at Phocuswright, during a webinar titled “China unbounded: The rapid rise of China’s outbound in millions.” The company has been tracking the Chinese travel market for nearly 15 years.
Chinese travelers took 120 million outbound trips in 2015 and spent $207.5 billion on outbound travel in 2015. The average amount spent per trip for outbound leisure travelers was 17,490 Chinese yuan ($2,657.51) in 2015, according to Phocuswright data.
Here are five things to know about China’s outbound travelers based on information presented during the webinar.
1. Many travelers are first-time outbound travelers
A total of 47% of Chinese travelers took outbound leisure trips in 2015. For 23% of travelers, it was their first trip outside of China, according to Phocuswright data.
The top five visited countries among Chinese outbound travelers include: Thailand, South Korea, Japan, Singapore and Malaysia.
“All of the first five (destinations) are in Asia,” Rauch said. “They’re easier to get to; they’re often more affordable; sometimes there’s a shared language; and sometimes there is shared culture or history.”
Beyond those destinations in Asia, the United States was the most popular destination, according to Rauch. France, Italy and the United Kingdom followed in popularity.
Rauch said Phocuswright asked travelers about their future travel intent to outside destinations, and there was strong interest in countries lower on the list, such as Germany and Canada.
“There’s an incredible need for information about these destinations,” she said. “There is a high level of curiosity, and a lot of desire to visit and a lot of need for information.”
2. Young travelers are changing the norm
Travelers ages 18 to 24 are changing outbound travel norms in China.
“They are adventurous. They are traveling farther distances. They’re experiencing different modes of travel, different travel products,” Rauch said. “And as they catch up or adopt habits seen in more mature markets, such as independent travel, participating in the sharing economy, etc., their tech-savvy, mobile-loving habits are going to have more and more influence on online travel and innovation growth globally, making this a group that no one can afford to ignore.”
3. Online bookings dominate
A total of 62% of Chinese outbound travelers booked at least part of their last trip online, according to data from Phocuswright.
Desktop is the preferred platform for online shopping, but mobile dominates bookings in almost all travel sectors, except for airlines, according to data discussed during the webinar.*
4. Chinese travelers prefer paying via mobile wallet
Nearly 60% of travelers ages 18 to 24 are accustomed to paying for travel via mobile wallet, according to Phocuswright data.
“In China and some other areas, there’s really no such thing as alternative payments,” Rauch said. “If you referred to mobile wallet-based payments (as alternative) in China, it would be very confusing because they have become really, really widespread.”
She said it’s the second-biggest form of payment in China after credit cards.
“I don’t think that even captures the preference among Chinese travelers to use these,” Rauch said. “They may not always have the options to use these at hotels internationally, but they are using (mobile wallet payments) quite widely.
“Chinese travel providers are the only ones accepting this form of payment consistently, and for the most part, when you look at international travel suppliers, they do not accept those forms of payment. That is one more reason to stick with a homegrown (online travel agency) when traveling abroad.”
When it comes to booking through OTAs, Rauch said Chinese websites are used the most by the country’s travelers. Global OTAs, such as Expedia, rank way outside the top 10.
5. The sharing economy hasn’t caught on—yet
Airbnb made its way into the Chinese market about a year ago. Airbnb clones in China exist but haven’t become popular yet, Rauch said.
“We saw pretty low rates of use of shared accommodation or peer-to-peer lodging in outbound travel,” she said. “(The sharing economy) hasn’t really caught hold, and there is a belief out there that it won’t. When I say out there, it’s something I hear anecdotally a lot that Chinese travelers won’t do it. They just don’t feel comfortable with the idea of traveling and staying in a stranger’s home and paying a person.”
She said, however, that the sharing economy is more popular among younger travelers.
“I do think that the potential is there, and as Airbnb becomes more active in the Chinese market, and maybe some local companies go in a different way, then we might really start to see that (market) grow,” Rauch said.
*Correction, 2 June 2016: Previous versions of the story misstated booking versus shopping trends.