6 trends for appealing to emerging Chinese travel market

Since the reopening of China on January 8, there have been numerous surveys published on what to expect from this most consequential of travel markets and how the world should prepare for it.

But nothing beats hearing firsthand from those who are in-market or at the forefront of what is possibly the most significant travel event of the year, as the close to 200 attendees at the China Arising event, run by WebinTravel in partnership with Travel Daily China and Accor did, last week.

As Charlie Li, founder of Travel Daily China said, “The whole world has been waiting for it.”

Here are the key takeaways on what changes have taken place in the travel tech landscape and what you can do to market to the emerging Chinese traveler.

Air capacity remains the main constraint

All the data points to instant surges in searches and bookings. Data from Atlas, the aggregator of low-cost and domestic airline content, shows searches on major online travel agencies such as Ctrip, Trip.com, Qunar and Fliggy, shooting upwards as soon as restrictions were lifted. Two weeks after reopening, Bangkok, Hong Kong, Seoul, Singapore and Macau were the top five destinations in terms of searches for international flights and by the eighth week, Tokyo had replaced Macau in fifth position.

Boon Sian Chai, managing director and vice president of International Markets for Trip.com Group, said the OTA saw an immediate 250% growth in bookings after January 8, and between January 1 and March 15, its bookings grew 1000% versus the same period in 2022.

Singapore and Thailand were the top two spots, with air capacity having a big part to play in the surge. “There is definitely a strong demand for bookings, and it’s related to where there is air capacity,” said Chai.

While the initial recovery has been led by Chinese carriers, airlines like Singapore Airlines and Scoot have been quick to restore capacity, boosting Singapore’s chances of capturing the first wave of pent-up demand.

According to aviation analyst, Brendan Sobie of Sobie Aviation, based on Official Airline Guide schedules data, Singapore-China seat capacity in March 2023 is at 37% of March 2019 levels while overall Singapore capacity is at 78%. Singapore Airlines Group is at 34% and Chinese carriers were at 44% in March.

The good news is, SIA Group is targeting to reach 80% to 90% China capacity restoration by end of August.

Consumers looking for emotional value and comfort

Calvin Chu, managing director and head of international vacation business for Fliggy, said it was seeing strong growth across all categories – flights, hotels and visa services. “There is a sharp trend in consumer desire. In a campaign to promote outbound travel, nearly 200,000 travel products were sold – flight packages, pre-sale of hotels and resorts, theme parks, cruises island vacations.”

Unique experiences and once-in-a-lifetime opportunities are also trending such as “the sheer magnificence of wild animal migrations in east Africa” and “exchanging wedding vows in Semporna, Sabah.”

“Semporna means ‘perfect’ so I suppose couples hope they will have the perfect marriage in such a location,” said Chu.

Nordic and Mediterranean destinations were also trending, as is themed and entertainment-focused travel. He noted that the LinaBell packages at Hong Kong Disneyland were sold out within the first 20 minutes. In Hong Kong, memorial concerts of the late pop icon, Lesley Cheung, were snapped up within a minute of sale.

After living under the zero COVID strategy, Chinese consumers are mentally weary and stressed and need to get out and experience the world – that sentiment came across loud and clear during the two-hour event. For Chu, for instance, it was his first trip since the pandemic to Singapore, and he spoke of the joy he felt to see the city thriving and to be connected again with friends and colleagues.

“The consumer psychology is, they are looking for emotional value and comfort in travel,” he said.

Live-streaming is taking off in Asia

Chai said Trip.com’s “Boss Live Show,” which chairman James Liang started and has since run 100 live shows, had shown great results domestically and the OTA was seeing similar success in external markets.

“In January, we ran one in Thailand and saw $6m [gross merchandise volume] in bookings in three hours. It ran from 8 p.m. to midnight and we had 10-15 requests for room top-ups from hotel partners. It looks like live shows are still there, and we will drive it as long as our partners and consumers want it.”

Chai said it also uses Key Opinion Leaders (KOLs) and platforms such as Wechat and Baidu, as well as offline advertising. “We go across different marketing channels to drive demand for overseas products. We try different ways to stimulate travel – for example, Trip Moments, in which we encourage users to post photos and videos in the app, and Trip Trends, where we share travel data points with our consumers.”

Chu said that during COVID, consumers were watching live streaming “with hope,” since they couldn’t travel.

“Now they see more benefits where they can interact real-time with live stream hosts for real-time advice and recommendations. Before they had to go to an offline store, now they can do these things online. Seeing is believing and live-streaming is an effective tool. For a lot of new merchants, live streaming is also an effective way to jumpstart a new business.”

Chu said Fliggy has 400 million users and 1 million live streamers on its platform. “We are doubling down on marketing resources to help heavily impacted merchants.”

Competition is good for innovation

Across the different sessions, one social media app’s name kept coming up – Little Red Book/Xiaohongshu, that is taking the country by storm. It allows users to find and share information about local businesses and its target demographic is mostly urban women aged 18 to 35 years old. Invested in by Alibaba and Tencent, latest data shows it has 202 million monthly active users, with 72% post-90s and 50% distributed in first-tier cities or larger areas such as second/third-ranked townships.

Cinn Tan, chief sales and marketing officer for Pan Pacific Hotels Group, said that when its newly opened Pan Pacific London decided to try Little Red Book to engage customers for its restaurants, “for the first two months, 90% of its customers came from this app.”

The hotel group has now launched a Little Red Book store – similar to its stores on Fliggy and Wechat – and “it’s been a pleasant surprise from the moment it launched,” said Tan.

Tan, who used to head up marketing and sales for Jin Jiang International Hotels, said deep localization was key to winning in the Chinese market, and Pan Pacific has spent more than three years building an e-commerce ecosystem in China.

“In 2018, we said we would build a Wechat platform to help our hotels. Most hotels have an official Wechat account, and that’s more for communications. We wanted our customers to complete the whole journey. They can search within the mini program, but then how do they book? Then we looked at calendar booking functionality. We then started a Wechat mall to capture vouchers and coupons. It took us two years to build these functions. We did the same with Fliggy.”

Duoyin is also enjoying similar growth domestically as TikTok is doing internationally. As Chai observed, “If there was anyone who hadn’t heard of TikTok before, they would have by now,” referring to the recent publicity surrounding the congressional hearing in which CEO Shou Zi Chew had to defend his company’s relationship with China.

The Bytedance-owned apps are seeing strong growth in travel-related content, and its short-form videos are becoming sources of inspiration for a younger set of customers in South-east Asia. Both have become strong alternatives for customer acquisition beyond the traditional search channels.

Chai cited Trip.com’s new TripGen, its chatbot built on OpenAI ChatGPT, in saying competition helps companies innovate. “We have been around more than 20 years and we are where we are because of competition.”

Chu responded that it was good to see the trending of travel-related content on social media platforms. “It shows optimism in travel. Travel tech companies like us innovate to create differentiated value – outbound travel has high unit prices, and there’s a long process involved in the selling of it. What we want to innovate in is high quality fulfilment.”

The four S’s ruling customer behavior

Chai listed the four S’s that Trip.com uses to explain changes in customer behavior stemming from the pandemic. “For the last three years, it’s been about safety, and that’s still top of mind. Booking windows are still short and we expect that to stay till capacity picks up. We also see smaller groups – friends and families traveling together – and we have asked our hotel parties for friendlier child policies. And, last but not least, sustainability – you will be surprised but Gen Z customers want to support the environment.”

Trip.com, McKinsey & Co. and Accor recently released a report titled, “The path toward eco-friendly travel in China,” which showed that tourism accounted for an estimated 6-8% of mainland China’s total carbon emissions. Accommodation generated 60% of domestic travel emissions, mostly due to high energy consumption. Though only 1 percent of domestic trips involved a flight, aviation was the top emitter in the transportation sub-sector. Accommodation is also responsible for the majority of water use from showers, bathing and laundry. Waste is generated at all points in a journey.

Data from a recent McKinsey sustainable travel survey reveals that Chinese travelers are concerned about climate change and are starting to seek out sustainable options. But they are unwilling to pay more for sustainable travel solutions. Chinese tourists believe that climate-friendly travel is a shared responsibility, looking to the government and industries to make tourism more sustainable.

Chai said the report showed that by “by making smarter decisions, and with the help of incentives from travel providers, travelers could reduce 10-20% of their environmental footprint on a typical trip.”

Trip.com has a partnership with climate-tech company Chooose to offer travelers the option to calculate and offset their flight’s carbon footprint.

Local giants want to grow global wings

The desire by Chinese travel brands to expand globally started before the pandemic, but the last three years have certainly made it even more imperative, given the tough conditions at home along with intense competition at home. Indeed, 2023 will be the year Chinese brands double down on global expansion, and this was evident at ITB Berlin when players such as Dida Travel, PK Fare and Flightroutes24, among others, were there in full force.

We will see both geographic expansion as well as sectoral. Chai said Trip.com was expanding into trains in the United Kingdom, Europe, Korea and Japan, as well as tours and activities and events such as concerts. “Our ambition is to offer travel products for all consumers around the world.”

Chu said Alibaba has been a global business since the beginning and, as such, Fliggy should be global too. “We started as a platform, enabling our partners and merchants with a gateway to serve 1 billion customers. Our high priority is within a four-hour flight circle.”

Trip.com led the charge way before the pandemic, with its acquisitions of Skyscanner and Travelfusion, as well as MakeMyTrip. How the others catch up remains to be seen.

Meantime, the gates are wide open for the Chinese traveler, ready to explore the world again. Ready, get set, go.

*This story originally appeared in WebinTravel.