Travel Marketers Aren't Prepared for Flood of Affluent Chinese Tourists
Global hotel chains, airlines and luxury retailers can expect tens of millions of new customers from China in the coming years, but few Western companies are prepared for this influx or have a clear understanding of exactly what Chinese tourists require and expect for their yuan.
The growing number of affluent Chinese travelers "will completely change the face of tourism," especially in hot destinations such as New York, Las Vegas, London and Paris, said Pierre Gervois, president-CEO of China Elite Focus, which specializes in affluent Chinese outbound tourism. "There will be an influx of wealthy travelers."
China will overtake Japan as the world's second-biggest tourism market by 2013. Sixty-six million Chinese will travel overseas this year -- a 15% increase over 2010 -- and that number is expected to reach 100 million by 2020, according to the World Tourism Organization.
Just a few years ago, few Chinese went further than shopping excursions to Hong Kong or gambling junkets to Macau organized by budget tour group operators. Today, Chinese tourists are more likely to be affluent independent travelers looking for customized experiences along with the comforts of home.
"Everyone stands to benefit because the Chinese market is growing so fast," said Bruce Ryde, general manager of InterContinental Hotels' Hotel Indigo Shanghai on the Bund, who appeared on this week's episode of "Thoughtful China," a video program produced in China.
But the global travel and tourism industry doesn't understand these travelers yet. "The biggest issue is language," Mr. Ryde said. "The Chinese traveler appreciates and needs a certain amount of translation [when] it comes to menus, hotel information and just general conversation. There needs to be some preparation."
"The most important thing the hotels need to be thinking about is understanding and tapping into the cultural differences, and ensuring they understand what's important to Chinese travelers," said Gary Rosen, who recently resigned as senior VP and head of global operations for InterContinental Hotels Group.
Some hotel and retail chains have started to tap into this market. This summer both Hilton and Starwood introduced touches aimed at Chinese travelers such as stocking instant noodles, Chinese teas and tea kettles in mini-bars, offering Chinese TV channels and slippers in guest rooms, and serving congee (hot rice porridge) and dim sum at breakfast.
Food is especially important. Don't be surprised, Mr. Gervois said, if Chinese tourists, both rich and poor, prefer instant noodles in the room over local cuisine.
Hilton and Starwood have also translated corporate websites, welcome letters and local sightseeing information into Chinese and hired dedicated front desk staff fluent in Mandarin.
The goal is to make them feel at home the same way Western hotel chains cater to Western travelers in Asia, said P.T. Black, "Thoughtful China's" senior creative director in Shanghai. "If a hotel can provide Americans with a hamburger in Hanoi, then Chinese should get noodles in Nice."
Luxury retailers and top tourism destinations such as the Louvre in Paris have followed suit. Many Chinese still don't have Western credit cards, for example, so Harrods in London brought in 75 UnionPay machines "so Chinese can use their own local cards to get money out," said Chloe Reuter, a luxury retail specialist based in Shanghai.
While Western companies struggle to adapt to Chinese travelers, Asian firms are trying to expand, such as Hong Kong-based Shangri-la Hotels & Resorts, which recently opened a five-star property in Paris.
"All the luxury hotels in Paris are really scared," Mr. Gervois said. Their owners realize Shangri-la "knows exactly how to talk to wealthy Chinese travelers, what kind of food they expect, what kind of service they expect. I think Chinese bands with a lot of quality and content will really have big success expanding abroad."
Foreign companies should also be working harder to provide online product information and reservation options in China, which has over 400 million internet users, Ms. Reuter said. There's a missed opportunity for a global travel portal that curates news and information, she said. "Chinese spend hours, if not days, searching for information about where they want to go [but] no one is telling people, here's your Chinese-language app for where you need to go shopping in Paris."
Normandy Madden is senior VP-content development, Asia/Pacific at Thoughtful China, and Ad Age 's former Asia editor. See earlier episodes of Thoughtful China here.