CHINA’S YOUNG TRAVELERS EMERGE, DEMANDING PERSONALIZED LUXURY AND DIGITAL INNOVATION
New report from forefront of the industry says bespoke experiences,
digital services key to winning the loyalty of China’s young luxury travelers
(30 May 2016, Shanghai/Hong Kong) – Marriott International, Inc. (NASDAQ:MAR) and the Hurun Research Institute are delighted to release the Chinese Luxury Traveler 2016 today. This inaugural study marks the first-of-its-kind collaboration between an international hotel company and a leading authority on Chinese luxury travel.
Findings at a glance:
China’s young luxury travelers go abroad every 3-4 months, mainly for leisure
They spend RMB 420,000 (US$65,000) on tourism per year and RMB 220,000 (US$34,000) on travel shopping
They demand personalized luxury experiences, Wi-Fi, and next generation guest services on smart devices as standard
Japan is the top destination for shopping, France is the most popular destination in Europe and Australia is the top destination for leisure
The report’s key findings reveal a shift in travel habits among this younger generation of travelers, aged 18 to 36. The research shows that they want a more personalized luxury experience and added value throughout the entire hospitality ecosystem – from planning a trip, to requesting guest services, to selecting which loyalty program to join.
The report reaffirms that when it comes to services and information, China’s young luxury travelers prefer to do it digitally. Interactive guest services on smart devices are far more popular than traditional guest services, and travelers also expect this smart technology to record and manage their personal preferences.
Not surprisingly, China’s young luxury travelers conduct their research on digital platforms. WeChat emerged as their primary source of travel information, obtained from official WeChat accounts and the accounts of friends and professional travel advisors. Third-party apps are also important information channels and popular platforms include C-Trip, Qunar and Tuniu.
Diverse in their travel motivations, China’s young luxury travelers are seeking a wider choice of unique and novel travel experiences. They are interested in adventure travel, polar exploration and road trips that take them further afield to a wider range of destinations around the globe.
With greater opportunities at their fingertips, this group of young luxury travelers feel underwhelmed by loyalty programs, many of which are seen as low value and not unique.
“This is a key focus area for Marriott,” said Peggy Fang Roe, Chief Sales and Marketing Officer, Asia Pacific at Marriott International, which in the first quarter of 2016 saw a 7% increase in domestic travelers in China and a 25% increase in Chinese outbound travelers.
Fang Roe continued, “We are responding to the desire for personalized luxury and services by evolving our loyalty program Marriott Rewards, which goes far beyond hotel-level perks. Elite Member benefits now include tailored VIP access to rewarding experiences such as culinary demonstrations, concerts and catwalks, the NBA Global Games in China, and lots more. We are also piloting a new hospitality program called “Li Yu” (礼遇) which is tailored specifically for our Chinese guests, with Mandarin speaking personalized assistance and service across our hotels to make them feel at home, wherever they go.”
Rupert Hoogewerf, Hurun Report Chairman and Chief Researcher, said, “Despite the economy slowing, the impact on outbound travel from high net worth individuals seems to have steadily grown. The young luxury travelers has developed significant spending firepower, minted on the back of the recent boom in Chinese entrepreneurship, together with a growing class of second generation ‘rich kids’.”
KEY FINDINGS FROM THE CHINESE LUXURY TRAVELER 2016
Experienced Travelers With High Spending Power
This year’s report focuses on young, luxury travelers born after 1980. Relatively wealthy, these Generation Y travelers spend an average of RMB420,000 (US$65,000) on tourism per household, per year, and an average of RMB220,000 (US$34,000) on tourist shopping – primarily clothing, bags, watches and jewelry. Their average hotel budget is RMB3,100 (US$500) per night. Experienced travelers, they have been to an average of 13 countries and have been abroad 3.3 times in the past year for approximately 25 days, 69% of which was leisure travel.
Europe is the destination of choice for young luxury Chinese travelers, with 61% of respondents visiting that region in the past year and 65% planning to visit in the next three years. France was ranked the most popular international travel destination. Japan was the most memorable destination for Generation Y luxury travelers in 2015 and their most visited destination over Chinese New Year 2016. Travel to Japan was strong last year due to its close proximity to China, coupled with convenient shopping, attractive dining experiences, and a modern, sophisticated culture.
Travel Time: Flexible and Family-Oriented
55% of young luxury travelers said that in the next year, they are most likely to travel whenever it fits their schedule. National Day Golden Week was the second most popular period, with 36% of respondents claiming this as their preferred travel period. It is interesting to note that most Generation Y luxury travelers have either very young kids or no kids, and that only 20% are interested in traveling over the summer. Family travel peaked during Chinese New Year, with 56% of young luxury travelers going abroad last year over this period. 90% traveled with family or friends, in a party of four people on average, and stayed abroad for 8.5 days.
Travel Purpose: More and More Diverse
Compared to 2015, young luxury travelers are expected to seek more diverse travel experiences in the next three years. Leisure and vacation are still the most popular reasons to travel, however young travelers also cite new and more challenging reasons to go abroad. Global travel, adventure travel, polar exploration and road trips have captured young luxury travelers' imaginations, each expected to rise by 25%, 52%, 38% and 75% respectively over the next three years.
Hotel Selection: What Influences Choice of Accommodation
Although 41% of general travelers say that room cleanliness is their top concern when choosing a hotel, 42% of young luxury travelers with a household net worth over RMB 100 million cite personalized service as their most important consideration. Luxury amenities are also important, including new facilities and cozy lighting. They seek a tailored guest experience, including a selection of pillows, and personalized service through a butler or interactive digital channels. They favor hotels that provide high-tech digital equipment, like Wi-Fi (73%) and Smart TVs (55%), which offer a more enjoyable stay as well as bespoke, convenient service. They prefer brands and hotels with unique art and design that make the travel experience feel unique and fun.
Loyalty and Travel Programs
In terms of frequent flier programs, Air China is the clear winner (51%), followed by China Southern Airlines and China Eastern Airlines. For international travel, Lufthansa is the top choice due to a diverse selection of European routes and convenient transit (19%). In general, awareness of hotel loyalty programs is low among young luxury travelers, who say that many membership programs don’t offer unique or high value benefits.
Young luxury travelers primarily receive information through official WeChat subscription accounts (48%), WeChat Moments shares from friends (47%), and websites (42%). In regards to gender, male travelers tend to obtain information from websites while female travelers prefer WeChat shares and friends' recommendations. Third-party apps are also important information channels, with C-Trip, Qunar, and Tuniu being the most popular platforms.
Popular Destinations: Insights
Shopping and food in Japan are popular with young luxury travelers, while the USA is seem as an important destination for business travel. France is the most popular destination in Europe and known as a shopping paradise. Australia is the top leisure destination, while the UK is the top destination for visiting friends and family.
A full copy of the report is available below:
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About Marriott International
Marriott International, Inc. (NASDAQ: MAR) is a global leading lodging company based in Bethesda, Maryland, USA, with nearly 4,500 properties in 87 countries and territories. Marriott International reported revenues of more than $14 billion in fiscal year 2015. The company operates and franchises hotels and licenses vacation ownership resorts under 19 brands, including: The Ritz-Carlton®, BVlgari®, EDITION®, JW Marriott®, Autograph Collection® Hotels, Renaissance® Hotels, Marriott Hotels®, Delta Hotels and Resorts®, Marriott Executive Apartments®, Marriott Vacation Club®, Gaylord Hotels®, AC Hotels by Marriott®, Courtyard®, Residence Inn®, SpringHill Suites®, Fairfield Inn & Suites®, TownePlace Suites®, Protea Hotels® and Moxy Hotels®. Marriott has been consistently recognized as a top employer and for its superior business ethics. The company also manages the award-winning guest loyalty program, Marriott Rewards® and The Ritz-Carlton Rewards® program, which together comprise nearly 55 million members. For more information or reservations, please visit our website at www.marriott.com, and for the latest company news, visit www.marriottnewscenter.com.
About Hurun Report Inc.
Established as a research unit in 1999, Hurun Report Inc. has grown into a leading media group targeted at China and India high net worth individuals. Its flagship is the Hurun China Rich List and, since 2012, the Hurun Global Rich List. Headquartered in Shanghai, Hurun Report has offices in Beijing, Guangzhou, Chengdu, Sanya, London, Los Angeles, Chicago and Cochin, Kerala in India.
Hurun Report Inc. has five divisions:
Hurun Research (‘Nobody Knows China’s Rich Better’) has grown to become the world’s leading authority when it comes to understanding the Chinese high net worth individual. Recent reports include partnering with some of China’s most important financial institutions, local government, multinationals and luxury brands, including Bank of China, Taikang Life, Minsheng Bank, Minsheng Financial Leasing, Industrial Bank of China and the Changbaishan government.
Hurun Media (‘The Voice of Chinese Entrepreneurship’) reaches between one and two million unique viewers a week through its digital platform and a further 485,000 a month through its print media. Digital media is made up of 7 Wechat social media, an online business talk show called MaShangHu, distributed through iQiyi, CBN and Ningxia Satellite, and Hurun.net. Our flagship Wechat media is Hurun Business, with others including Hurun Education, Hurun Art, Hurun Horse & Sports, Hurun Health, Hurun Property and Hurun English.
Hurun Conferences and Training hosts over 100 events across China every year, led by its flagships in Beijing and Shanghai every year. Hurun Conferences and Training brings Chinese entrepreneurs aboard, to the US, London, Singapore, Australia and India.
Hurun International. Hurun Report Inc established its India business in 2012, which today is best-known for the Hurun India Rich List, Hurun India Philanthropy List and for hosting events with some of India’s most respected entrepreneurs.
Hurun Investments includes a CNY 100m early-stage venture capital fund, and strategic investments in media, education, classic cars, financial services and luxury.
For further information, see www.hurun.net
Chinese Luxury Traveler Whiter Paper