China’s Travel Infrastructure Boom Sets a New Global Agenda

In the 1990s, China spent billions (of renminbi, or RMB, or U.S. dollars, either way) on its telecommunications and internet infrastructure, taking the country from a place where not every home had a landline to the largest internet market in the world in about 15 years. China currently has more mobile internet users than there are Americans — over 700 million and growing.

The telecom boom of the ’90s gave way to a new rail bonanza of in the ’00s. While China already had one of the world’s largest railway networks, the system has been gradually upgraded to accommodate high-speed rail, cutting the journey between Beijing and Shanghai to as little as four-and-a-half hours.

That combination of mobile technology and the ability to go mobile physically are creating a new generation of China traveler, one that is starting to have an impact on a global travel industry hungry for the growth that Chinese outbound travel has fueled. Here are some of the trends that demand is driving.

Chinese Cashless Payment Systems

Cash is no longer king in China. Where once it was renminbi (the local currency) or the highway, China has developed and adopted cashless payments systems, namely Alibaba’s Alipay and Tencent’s WeChat Wallet, which have come to dominate transactions of all sizes. On the low end, like convenience store buys, there’s no need to fumble for change, an annoyance for even the most seasoned, multi-currency traveler. For flights and hotels, bookings can be done on phone, securely.

Western travel companies looking to hook more Chinese travelers — and give existing Western travelers new payment options — can at least meet them halfway with payment options such as Apple Pay, which is available both in China and elsewhere.

Fast Trains

Flying is for suckers in China. Especially during periods of inclement weather, like spring and summer, when the threat of thunderstorms can delay flights between major destinations like Beijing and Shanghai for hours, a train journey of five-plus hours, which costs less and is more comfortable is an utter no-brainer. People in China grew up taking trains, not flying, and the country’s network of fast trains is are a point of pride for the country now. Given the opportunity (and time), Chinese travelers will take trains, and like places such as Europe where they can have a similar experience. Having to drive or fly to cover long distances, as in the US, goes to the “con” side of the list when evaluating potential destinations.

Social Media

Yeah, we get it with WeChat, you say. Well, probably, you don’t because so far, only Chinese companies seem to be using it effectively. Although ad buys on television and outdoor still hook older travelers, for under-35s, social media is where it’s at. With major social media platforms Facebook, Instagram, and Twitter blocked in China, travel companies will need to learn to use the WeChat and Weibo interfaces to spread their message. Unfortunately, there’s little opportunity to bridge this gap due to China’s internet controls.

The Past Is The Future

Despite their affinity for so many things technological, it’s still, real, physical-world service that makes the biggest difference for travelers and the reputations of destinations and venues. The availability and quality of Chinese food – regardless of the location – remains a primary complaint and concern for Chinese travelers. While tasting – taking selfies with – local cuisine is an increasing interest, knowing that some familiar food can be had is part of any Chinese tourist’s checklist. Similarly, Chinese-speaking staff are still shockingly lacking on international airlines and global hotel chains.

A lack of Chinese-language signage and explanatory material (audio tours, brochures) still leaves Chinese travelers still feeling neglected – and therefore unwelcome, in many destinations. And free Wi-Fi is key. Sharing selfies, checking maps, and accessing payment all require connectivity, and Chinese travelers do not like to pay international roaming charges.

That free Wi-Fi is key for overcoming language barriers. Online translators such as Dict.cn  and Youdao can bridge the gap, at least Chinese to English. And if no concierge who spent the summer at Beijing Language Institute is available, travelers will look to the online ratings and review half of Meituan-Dianping, which raised $4.2 billion in a September initial public offering in Hong Kong, to see where in town their compatriots ate and if those places are any good. What’s missing is Meituan, the food delivery monolith, which will unlikely see its model replicated in the West, where labor costs are many times higher.

There is some potential downside. Because these are China-developed systems, their use anywhere else besides Greater China (including Hong Kong, Macau, and Taiwan) is almost non-existent. Just as JCB card logos springing up throughout major American cities was a hallmark of the rise of Japanese tourism, will Alipay, WeChat, and UnionPay logos act as beacons for travelers from China. But they’re the only ones.

The realization of the Chinese (outbound travel) Dream in 2019 will depend almost entirely on the strength of China’s economy. Although China continues to defy regular predictions of economic decline, even the country’s state-run press has started to write about the need to reduce public spending and government debt, all of which may send a chill through Chinese consumers.

China’s government is quite fond of economic soft landings and pulls as many levers at its disposal as possible to ensure them, but markets have a funny way of dropping when one least expects it. Still, even a decline in travelers overall is unlikely to result in a reduction of demand for the above services, and in a global downturn, the sheer numbers that outbound business generates will become even more valuable.