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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Is the rise of Chinese travel to the UK unstoppable?

It’s hardly a secret that Chinese tourists stay longer (twice as long) and spend more (3½ times more) than the average visitor to the UK. This long-staying, high-spending market is moving up every tourism provider’s priority list as the value of China’s growing outbound travel market – which already stood at 120 million in 2016 – becomes abundantly clear.

Chinese tourism to the UK increased by +10% in Q4 2016 – and this after a record-breaking 2015. Early indications point to another very healthy year in 2017: May saw an increase of 31% of bookings by Chinese tour operators to London, while the capital’s luxury quarter saw a 39% increase in tax-free shopping for designer clothes, handbags and jewellery in the same period.

Is the rise of Chinese travel to the UK unstoppable? There are plenty of reasons to think so…

The Chinese are flush with hidden money and they’re ready to travel

It turns out that the Chinese travelling middle classes have even more money to spend than the headlines suggest. The government-backed Chinese Academy of Social Sciences in Beijing recently declared that that estimates of household income have undervalued real income by up to 20% through omitting to measure household investments. And we can expect plenty of that income to be spent on travel; a recent report by Sabre found that 90% of Chinese travellers expect to travel more often in the future.

Travel is increasingly the norm and an expected activity for Chinese, which means not just more Chinese travelling, but an increasingly independent, experience-seeking market in search of destinations, hotels, visitor attractions and activities which will genuinely differentiate their holiday from the norm.

The revolutionary rise in independent travel

As new waves of Chinese outbound tourists take to the skies, independent travel is taking off too, especially amongst Chinese millennials. By some measures, around 40% of Chinese outbound tourists travel independently. English-speaking countries are naturally-preferred long-haul destinations since they present fewer language challenges than other nations.

Self-drive tourism, camping & caravanning, and adventure travel are all trending travel segments in China, helping to distribute Chinese tourists and their largesse more widely in destination nations.

The Chinese love spending money in the UK

Chinese visitors to the UK spend £2,174 on average during their stay – more than 3 ½ times more than the average tourist. They spend twice as much time in the UK as the average tourist too – averaging 15 nights vs the average 8 nights.

Encouraging even more spend in the UK is the proliferation of Chinese payment options including UnionPay. The heavyweight retail early adopters long ago proved the value of accepting UnionPay. Harrods introduced 75 China UnionPay terminals in 2011 and has since seen an increase in sales to Chinese tourists of +40%; by 2015, Harrods took £1 for every £5 spent by Chinese tourists in the UK. In 2011, the Ritz became the first London hotel to install China UnionPay terminals, a pioneering move which paid off handsomely with a 17% increase in Chinese guests and 25% rise in spending.

The Royal Observatory Greenwich’s average sale in the shop via UnionPay is 3.7 times higher than the average.

Brexit and the increasing strength of the renminbi

Record numbers of overseas tourists visited the UK in April as the fall in sterling made the UK very good value – a positive Brexit side-effect for inbound tourism. The UK is already a particularly attractive destination for the Chinese to spend their holiday money; Chinese visitors to London spend twice as much time and twice as much money as they do in mainland Europe, greatly benefitting the capital’s luxury goods sellers. So continuing uncertainty surrounding Brexit may actually offer a continuing positive pull to Chinese tourists.

Even Brexit itself seems unlikely to be a deterrent to Chinese tourists visiting, with no new visa requirements since the UK is already outside the Schengen visa zone.

The powerful allure of the UK

VisitBritain has invested heavily in China over recent years. The GREAT names for GREAT Britain campaign in 2014 generated 30 million views of the campaign video and 2 million visits to the campaign website – as well as such memorable monikers as ‘Big White Streaker’ (for the Cerne Abbas Giant) and ‘The Strong-man Skirt Party’ (for the Highland Games). VisitBritain’s recent +56partnership with Alitrip, Alibaba Group’s tourism arm, has created a virtual British marketplace to showcase UK tourist offerings and great British experiences and destinations to Chinese consumers.

And VisitBritain is building on a very strong base of traveller interest. The Chinese rate “a rich and interesting heritage and history” very highly as a travel motivation and this is one of many areas in which the UK excels. “Romance” and “the beauty of the landscape” also feature highly both in Chinese motivations for travel and as qualities which the Chinese ascribe to the UK. And there are plenty of current British qualities are tempting the Chinese to these shores, from the Royal Family, Downton Abbey and Premier League football to designer shopping and Harry Potter. Not to mention the apparently irresistible charm of Curly Fu and Peanut.

The early, concerted and continuing promotion of the UK in China by VisitBritain has brilliantly built and consolidated the UK’s position as an aspirational destination for Chinese travellers.

Chinese friendliness is on the up in the UK

TripAdvisor China’s 2016 survey found that the UK was the most-researched European country. And the world’s most valuable tourists have plenty of reasons to make the UK their European destination of choice. Britain is increasingly welcoming to the Chinese, partly thanks to Visit Britain’s Great China Welcome initiative which has encouraged many UK destinations, hotels, visitor attractions and shops to adopt Chinese-friendly products and service.

Many London visitor attractions, including the Houses of Parliament, now offer audio guides in Mandarin, and Mandarin audio guides make up 50% of the total hired at the British Museum. Increasing numbers of Mandarin- and Cantonese-speaking tour guides and shop assistants are evident, especially in London, and organisations from Great Western Railway to The Globe are undertaking Chinese-specific marketing and promotion initiatives to encourage visitors from the Middle Kingdom.

The future of Chinese travel to the UK

A progressively more Chinese-friendly UK with increasing recognition of the value of Chinese tourists is perfectly poised to keep a lion’s share of the world’s largest outbound market. And while recent terrorist incidents hardly provide the ideal backdrop for welcoming inbound tourists, even these gained favourable coverage in China, with Manchester’s homeless heroes garnering plaudits for their unselfish, typically British kind-yet-practical help.

So is the rise of Chinese tourism to the UK unstoppable? The indications are certainly pretty positive…

 

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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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