HONG KONG: Wanderlust, not shopping, is propelling China’s second tourism boom. Chinese travellers are eschewing shopping malls for beaches and other experiences, recent data show.
Offshore luxury retailers could lose some customers. But as younger members of China’s middle class take more trips abroad, there are bound to be more winners.
Government think tank China Tourism Academy estimates around 127 million Chinese people will travel overseas this year. Last week more than six million citizens flew abroad for the national“Golden Week” holiday, according to a joint report from the CTA and online travel site Ctrip.com.
That figure still pales compared to those who vacation at home. But big shifts in behaviour are becoming evident. For one, as younger tourists venture abroad for the first time, they are shopping less.
During the recent week, for example, one-fifth of Chinese travellers went to Thailand, reflective of a wider shift away from shopping-centric destinations.
The priciest Golden Week holiday booked on Ctrip.com this year, for example, was a 600,000 yuan (RM382,600) journey to Game of Thrones filming locations across Iceland.
Consultancy Oliver Wyman reckons that average spending per trip increased just 3.5% annually to 20,000 yuan (RM12,753) last year, with non-shopping expenditure now accounting for two-thirds of the total. Shopping dropped eight percentage points of total spending share since 2015. This is partly due to the broader “reshoring” of luxury sales back to the People’s Republic, where Louis Vuitton bags and other items often retail for far more than in Paris, London or Tokyo. But thanks to recent tax cuts and other incentives to boost domestic consumption, that gap has narrowed. At the same time, the next wave of Chinese tourists are more likely to splurge on fine dining and cultural experiences.
The windfall from more Chinese tourists abroad is huge and growing.
Analysts at Bernstein estimate that while average spending per trip will grow in low single digits, that still translates into US$411bil (RM1.7 trillion) of additional spending by mainland visitors by 2025.
Domestic outfits like Ant Financial are already catering to shifting habits. Ant and Alipay mobile wallet, for instance, offers users abroad discounts and coupons for local services in addition to shops. Western hotels, airlines and bespoke travel agencies should benefit too. China’s tourism 2.0 will create far more winners than losers. — Reuters