Post-pandemic revenge travel takes to the skies in China’s Golden Week

Thousands of years ago China’s emperors worshipped the moon for bountiful harvests, and on 1 October Chinese people believe that the moon is at its very brightest and fullest. China’s landscapes are dotted with lanterns to light the way to good luck, and across the nation people give mooncakes, rich pastries filled with sweet-bean or lotus-seed paste, as gifts in the week-long Mid-Autumn Festival.

China’s Mid-Autumn Festival this year coincides with National Day on 1 October, creating an eight day Golden Week holiday which is widely seen as a test for China’s post-pandemic bounceback. In mid-September, online travel booking website Qunar was forecasting that the total number of domestic flights over the holiday would surpass 15 million, a ten per cent increase on 2019. Lower ticket prices, promotions and curbs on international travel are all contributing to this surge in domestic traffic.

Chinese domestic tourism reaching last year’s levels?

Mid-September had already seen the first sales figures showing tourism growth year-on-year. China’s hotel occupancy rates in the week to 12th September stood at +9% against last year; this marked the first year-on-year increase since the beginning of the pandemic. Meanwhile Alibaba-backed online travel platform Fliggy announced that hotel and airline bookings made in the week to 15th September outsold those made last year.

There is plenty of confidence in the domestic market. China’s largest mainland hotel operator  Huazhu has unveiled plans to open more than 1,600 new hotels this year and has just raised HK$6.07 billion (USD783 million) with a second listing in the Hong Kong Special Administrative Region. Hauzhu is aiming for a total of 10,000 hotels in China by 2023. And Hampton by Hilton has just signed its 500th property in China.

The Red Dragon’s economic recovery

It’s increasingly clear that there’s plenty of pent-up demand in China. Restaurants, hotels and airports are busy again. Luxury spend is bouncing back. Expenditure from China’s middle income segment is not far behind, with compact cars following luxury models in seeing sales rise to near last year’s levels.

In fact, The Organisation of Economic Cooperation and Development’s recent reforecast for China predicts that the country will experience growth of +1.7% this year. This would make it the only member of the G20 to see positive economic output in 2020. Prompt initial action against Covid-19 positioned China for a quicker recovery than many nations, and the OECD’s forecast of growth of +8% next year suggests a speeding uptick in spending.

Revenge spending and revenge travel

The recent surge in household expenditure has been characterised as “revenge spending” as Chinese people celebrate surviving the fear and death of the pandemic. Golden Week is the first real opportunity for “revenge travel” and all indications point to a population increasingly comfortable with ‘the new normal’ and willing to travel. Complaints on online forums about sold-out hotels and tourist attractions abound, and traffic analysis indicates plenty of China’s traditional Golden Week jams on major routes.

Winners of the Golden Week visitor numbers lottery so far include Sanya on China’s holiday island Hainan, with reported waits for check-in up to 40 minutes in recent days. Even in August, Sanya Phoenix International airport in Hainan was reporting arrivals up +4% year-on-year. Macau relaxed its entry requirements for mainland tourists on 23 September, just in time for Golden Week. On the mainland, weekend hotel availability is limited in many cities.

Travel in the age of coronavirus

To help meet this increasing demand, China’s Ministry of Culture and Tourism allowed tourist attractions and scenic sites to increase their capacity to 75% for Golden Week. In the age of coronavirus, this is of course combined with pre-booking, temperature checks, mask-wearing and social distancing protocols, helping both visitors and attractions to find new levels of reassurance of safety in travel.

The Chinese Outbound Tourism Research Institute compares the post-pandemic recovery to that which took place after the 2008 Wenchan earthquake in Sichuan. The Wenchan earthquake survivors showed similar inclinations towards revenge travel as they wanted experiences to bring them joy post-trauma. Elements which will help in the era of coronavirus include not just implementing anti-Covid 19 measures but effectively communicating them too.

China’s travel future

Traditionally one of the busiest times to travel in China, 782 million holidays were taken over Golden Week last year, and more than 7 million people travelled abroad. While 2020 levels may not quite reach these dizzying heights, China’s travel sector is unquestionably picking up. More than 90% of attractions are open, and so are over 75% of travel agents. While some of this is discount-driven, Chinese travellers’ increasing comfort with trip-taking bodes well for the future.

Professor Dr Wolfgang George Arlt of the Chinese Outbound Tourism Research Institute is confident that mainland China will remain the no 1 international tourism source market for many years to come. Economic and demographic developments, a growing middle class, more openness and increased ease of travel, and the easing or removal of visa restrictions will all contribute.

As Chinese tourists’ previously constrained holiday ideas take flight in the Middle Kingdom, interest in overseas destinations is rising too. While quarantine remains in force for international arrivals (including returning Chinese nationals), many tourism brands are maintaining awareness in the market through smart digital initiatives.

We can help maintain and increase your visibility to China’s travellers ready for the restart of international travel. Don’t let your competitors get ahead of you when the Chinese start booking overseas travel again. Contact us for a no obligation chat now.

Get Ready for Golden Week

Golden Week is one of the most important holidays in the Chinese calendar, a week-long holiday that happens annually at the beginning of October. Traditionally, the Chinese flock in their droves (589 million to be precise) throughout China via train and by car, visiting domestic tourism attractions such as Beijing’s Forbidden City which sold 166 tickets per minute during last year’s festivities. However, times are changing and Chinese tourists are turning their attention to international travel during their week off work.

In 2016, it is thought that a record 6 million Chinese nationals opted to travel overseas for their holiday. Not only are they venturing abroad, they also have money burning holes in their pockets, in 2015 the Chinese spent $180billion abroad. Europe is seen as a favourable destination due to the ability to claim tax back, in the UK goods are almost 30% cheaper than Chinese high street prices because Chinese tourists can reclaim the VAT they’ve spent and taxes on luxury items are lower.

Attract a new market in a quiet period

2018, has been announced as the year for EU-Chinese tourism and, the spotlight is firmly placed on links between Europe and China. As relationships start to strengthen, the number of visiting Chinese should start to multiply. Europe needs to find ways to entice tourists in the off-peak seasons, and adding Golden week to the roster alongside Christian celebrations of Christmas and Easter maybe the perfect way. Golden Week is all about shopping to excess, and the European high streets, and particularly the gift shops, could really benefit from this shopping extravaganza in the post-summer, pre-Christmas lull.

Exchange rates have an impact

Golden Week 2016 saw sterling at the lowest it had been in 10 years, meaning the UK was 10% better value for money than it had been in 2015, enticing Chinese tourists to dig deep and spend, spend, spend. The UK saw a +58% rise year-on-year in Chinese Tax free shopping during Golden Week last year; fuelled not only by the post Brexit exchange rates, but also by dedicated promotions on travel websites such as Ctrip. This steady rise has seen stores such as Gieves and Hawkes on Saville Road benefit from the kind of shameless spending that Golden Week promotes.

So how many Chinese tourists will travel to Europe for Golden Week in 2017? Well, sterling has made a slight come back so the UK isn’t quite so cheap. In October 16, tourists could expect to receive around £0.12 for their Renminbi, where today (August 17), they would receive slightly less – around £0.115, but this is still a good rate in comparison to previous years. Looking at the euro, last year the Renminbi would have bought you €0.136 to splash out in the designer boutiques of the Champs-Elysees, but today that same Renminbi may only take you to Printemps, with a rate of €0.127. So the Chinese will get around 6% less for their money in the Eurozone this year, and around 4% less in the UK.

More importantly, perhaps, will be the response of the Chinese to the recent terrorist attacks in the UK. In the wake of the Paris attacks in 2015, Paris saw a drop of approximately 30% to the city . But, anecdotally, we have heard that the terrorist attacks in the UK received less media coverage in China so perhaps the impact will not be so deeply felt. Let’s hope so.

Are you ready with a Chinese cashless payment solution?

Another important factor for Chinese shoppers, is the availability of Chinese cashless solutions, such as AliPay, Union Pay and WeChat Pay. The might of Alipay is incontestable, more than 250,000 Chinese tourists visited Britain in 2015, and during this period the spend on Alipay topped £586.22 million. The mighty Tencent has brought WeChat Pay to Europe this year, and we can’t wait to see what effect this will have on Golden Week 2017.

Here’s hoping for a golden October.

 

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More than 750 million Chinese expected to travel during October’s Golden Week

Golden Week is the single biggest holiday for the Chinese and last year saw around 750 million people – half of China’s population – hit the road. While many travel domestically, increasing numbers are using this opportunity to fulfil dreams of further-flung travel. At least 4 million Chinese travelled overseas in Golden Week in 2015 and that figure is set to be surpassed this year.

Record Golden Week spend expected in 2016

While we’re probably all relieved not to be jostling for space amongst the 12.5 million Chinese who travelled on China’s railways on just one day of Golden Week last year, the UK is preparing for a bumper week. Golden Week visits by Chinese tourists to London quadrupled in 2015 compared with 2014, and this trend is certain to continue in 2016 thanks to the recent boost in Chinese holidaymakers driven by the beneficial exchange rate. Harrods has been running Golden Week promotions for several years, offering special ‘lucky’ products, increasing its number of Mandarin-speaking staff and highlighting the holiday in its WeChat account.

Golden Week shopping promotions go global

The Chinese are by far the highest spenders of all tourists and recent research by global tax-free shopping company Global Blue found that the average Chinese holidaymaker’s shopping budget is ¥16,702 (around £1,900). It’s hardly surprising, then, that plenty of other destinations and retailers have a history of bespoke activity to attract the Chinese in Golden Week. Department stores including New York’s Macy’s, Paris’ Galeries Lafayette and Spain’s El Corte Ingles all ran special Golden Week promotions last year. El Corte Ingles partnered with luxury watchmakers to offer exclusive gifts with purchases, and publicised special offers at its flagship Castellana store in Madrid via its WeChat account. South Korea even invented its own holiday, South Korea Black Friday, to encourage Chinese tourists to shop.

Chinese overseas trips continue their unstoppable rise

Golden Week begins with China’s National Day on 1 October, the day the People’s Republic was founded in 1949. And thanks to the PRC’s economic growth and opening up over the past few years, the flow of Chinese travelling overseas continues to grow. There was a +17% increase in overseas trips organised by Chinese travel agencies in Q2 2016 and that period was also the first time that visits by mainland Chinese tourists to non-Chinese overseas destinations exceeded those to ‘Greater China’ (Hong Kong, Macau and Taiwan), underlining the unstoppable trend towards longhaul travel.

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