Domestic Luxury Chinese Travel: Uncovering the Booming Industry’s Trends

The enormous numbers of domestic Chinese travel are no secret – hotel brands are investing heavily in their China portfolio. At this point we could list the big names opening and building new hotels in China – Rosewood, W, Banyan Tree, Bvlgari, Conrad, Waldorf and more – but one stat tells the story: the total China construction pipeline stands at 2,523 hotels with 556,645 rooms.

Looking at a couple of brands as an example, over the next four years Hyatt plans to double its presence in China with 60 hotels and 22,000 more rooms, representing nearly one-third of Hyatt’s global development pipeline. In the case of Hilton Worldwide, it’s 397 projects and 88,689 rooms under development

Travel and tourism revenue in China is growing at more than double the rate of GDP growth. Focusing on luxury, how do travellers’ tastes differ when travelling domestically versus internationally?

There’s scant published information available in this regard compared to the wealth of news and reports about Chinese international tourism – yet with more luxury options becoming available within their own country, affluent Chinese travellers are sure to look more locally for both short getaways and longer stays.

Our recent China Insight Report on luxury travel revealed key findings and takeaways that travel and hospitality brands must know in order to capture the vital affluent Chinese customer.

Honing in the focus specifically on domestic luxury travel, what are the ‘at home’ destinations, browsing and decision-making trends popular with wealthy Chinese travellers?

Destinations

Sanya. Sanya is the leading choice for holidays in China – both The Luxury Conversation report and the presentation by the Hurun Report at ILTM China confirm this. One simple reason worth understanding is that certain categories of public employee in China still need to specially request oversees travel – not only for staff lower down the ladder, but even those on the top rung. This means that rather than specially request permission for an overseas vacay, they will opt for a beach trip to Sanya when they need a warm getaway. (photo credit above: Mandarin Oriental Sanya)

Sanya already contains almost every luxury hotel brand under the sun, and is still developing rapidly with airport expansions, upgrading its duty-free and strategic international collaborations. It’s also worth noting that due to its location Sanya is a top choice among Russian tourists, with most top hotels presenting Russian-language guest services.

If you have travelled to Sanya, let’s say as someone living in Shanghai seeking a some winter warmth, then you will have noticed that at the top hotels, wealthy families take their ayi with them – the ‘maid’ who helps to take care of the children and various other needs of the family’s matriarch – and thus opt for connecting rooms, or a villa.

Most hotel guests are from China’s ‘dongbei’ area – the North East, much colder region of China – giving just one example of how ‘marketing your property to China’ needs specific regional targeting and focus, as different provinces have different travel tastes.

Browse & book

The leader? Not WeChat or Weibo, but Fliggy – the app under Alibaba Group (who own Tmall, Taobao etc), called FeiZhu in Chinese. Our insight report on affluent Chinese travellers revealed that while the main players are popular – WeChat and Weibo – it was Fliggy that came out as the number one choice for both learning about travel info and making the booking on.

Our further research into Fliggy revealed a key takeaway on influencer opportunity – any Fliggy user can create detailed reviews of their trips, which other users can like and comment upon. This leads to popular users/reviewers gaining a following and becoming KOLs in their own right. Our research showed that relatively few such users collaborate with brands on their trips – currently an opportunity with great potential for a savvy business.

For a closely-followed Chinese traveller who receives tens of thousands of (genuine) likes and comments, it’s a ripe playing field for brands to target: contacting such users and collaborating on promotions to a highly-engaged audience.

Domestic distinctions

The guidance for any luxury travel brand or destination outside of China is to expertly cater to Chinese tastes, language and desires. For a luxury property in China, these pointers should be innate. So what other expectations do affluent Chinese travellers have when travelling domestically?

Looking at food tastes, while Chinese food will always be sought while overseas, variety is very much the spice of life at home. Taking Sanya as the example, almost all of the dining options along the main 5-star strip of Yalong Bay are Chinese or general ‘Western’. The few diverse choices are a Thai restaurant at the Mangrove Tree resort and a Japanese venue at Marriott – we’ve visited Sanya several times and noticed that these are always full, as travellers at Yalong bay seek an alternative choice during their several-day stay. If you’re going to serve Western food in your hotel in China, it needs to be up to the standards that your well-travelled guests have experienced overseas.

How mobile can you go

As we also saw in our Chinese traveller report, over 90% of affluent Chinese respondents consider it ‘very important’ that a hotel/resort overseas has WeChat functionality, such as a loyalty program and customer service operating within WeChat. So, you can imagine their expectations of luxury travel within China.

China is a digital pioneer – even KFC operates facial recognition, even street buskers take donations by WeChat pay and there is an AI anchor reading the news on TV.

The idea of checking in to your luxury property in China not via digital means, of having to find and pick up the room’s telephone to order food or book an attraction, of locating the borderline archaic white-plastic-box a/c controls, is digital blasphemy in a country that’s at the forefront of life meeting tech.

Brand learning – Swire Hotels

The House Collective, Swire Hotels’ group of individual hotels, offers a travel experience that breaks with convention. Currently, Swire Hotels includes The House Collective – The Opposite House, The Upper House, The Temple House and The Middle House, in Beijing, Hong Kong, Chengdu and Shanghai respectively – and the EAST hotels in Beijing, Hong Kong and Miami.

We spoke to Teresa Muk, Head of Brand and Communications of Swire Hotels, to gather their learnings about domestic Chinese travel.

1) What is your key concept and differentiator when communicating with your target demographic, relevant to your positioning?

What sets us apart from other luxury boutique hotel brands is our deep understanding of our guests and what they expect and want while traveling, which also means we are not trying to target everyone. In order to provide the best curated and personalised service, we understand that we cannot please everyone and must focus our efforts on specific groups instead.

Swire Hotels is soulfully individual in every way, shape and form, celebrating individuality and straying from the norm. Both of our two brands, The House Collective and EAST, break from the traditional notions of luxury and business hotels and have filled in gaps in the market, offering another option to those that do not fit or relate to existing offerings and are instead seeking a new concept of luxury. For these people, we strive to provide a place they can call home, from our spacious and thoughtfully designed rooms to our personalised service delivered by our fun and spontaneous team members.

Additionally, each of the Houses in The House Collective also celebrates individuality as no one House is the same. From the architecture and design to the personality and vibe, each one is different and expresses the local culture and displays art in their own ways, creating truly unique experiences that cannot be found elsewhere. The Opposite House is all about art and design; The Upper House is the place to be inspired; The Temple House pays tribute to Chengdu’s rich history; The Middle House stays stylish with the newest fashion.

2) What have been the most successful channels for having your target customer understanding what you stand for and what they can expect?

Providing highly personalised service for our guests to experience firsthand and building lasting relationships with them have been the best ways for our guests to fully understand our brand. We believe that actions speak louder than words and because the experiences we provide speak for themselves, word of mouth has become another powerful channel through which our guests and potential guests have come to know us. Word of mouth, both online and offline, has been a way for guests to know us in a more authentic way and for us to build trust. Our loyal guests have naturally become our brand ambassadors.

Beyond the hotel stay experience, our events have been another avenue for us to engage with our target audience on a more personal level. We purposely invite speakers and collaborate with brands that are more niche and would attract specific groups that are already in the know. Our events also tend to be on a smaller scale, creating an intimate setting with a sense of community.

We are also working to strengthen our WeChat strategy so that we can utilise the platform to more effectively engage in one-on-one communication with our guests and potential guests, adding yet another way to provide personalised service as well as information about our brand.

With the majority of our hotels located in China and Chinese tourism booming, both domestically and internationally, we must provide Chinese tourists with ways to gather information and book in a way that they understand and are comfortable with, and WeChat is one of those ways.

3) What are the special points of experience that are rising trends in terms of domestic guest preferences?

Wellness tourism is a strongly rising trend in China. With the long work hours and urban pollution, the younger Chinese population are placing more importance on and paying more attention to their health. Short R&R weekend getaways will become more popular as Chinese guests will look for convenient ways to relax and escape without having to plan a long vacation away.

In China, mobile technology has allowed for the Chinese to essentially have a portable control panel for their daily lives consolidated and organised all in one place. Smartphones are now used for everything; hotels can and should utilise this technology to give guests the option of controlling everything from their mobile, from practical hotel conveniences such as booking, checking in and out, lighting, concierge, room key, payment, scheduling and messaging, to shopping, city guides, and finding unique and curated experiences, etc.

In the process of doing so, it’s not only about the convenience of technology, but in making some processes more efficient, this frees up time and capacity to bring personalised service to the next level, never forgetting that human interaction is still the most impactful.

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