Independent Chinese Travelers Close Gap With Tour Groups

Chinese tour groups have been a common sight in many destinations for years but in some places, especially Chinese long-haul destinations in the U.S. and Europe, Chinese non-packaged tour travelers have grown significantly and now outnumber package tour travelers.

Some 130 million Chinese travelers took an international trip in 2017, up nearly 6 percent over 2016, making China the world’s largest outbound tourism market. Independent Chinese travel has increased as the Chinese tourism market matures and travelers become more comfortable visiting places untethered to a tour. Mobile technology has also made it easier for Chinese travelers to access information and get the help they need while abroad.

Chinese travelers are also increasingly craving unique experiences that you won’t find on postcards or in guidebooks, and are seeking hidden gems and unfiltered views without tourist crowds.

Skift first tracked the rise of independent Chinese travelers in its first Research Report, “Rise of the Independent Chinese Traveler,” in September 2013, and this segment of the outbound Chinese market has continued to rise in the past five years. In 2013, independent travelers were about 37 percent of the Chinese outbound market.

Ctrip data show that independent Chinese travelers accounted for 42 percent of the overall Chinese outbound market in 2017, up from 40 percent in 2016. Some 14 percent of travelers in 2017 did a hybrid of independent and group travel, such as booking a customized itinerary or booking some tours and activities for their trip. A May 2018 Skift Research Report, “Best Practices for Attracting Chinese Outbound Tourists,” includes survey data that show nearly 50 percent of Chinese outbound travelers prefer independent travel.

Data from the Chinese Outbound Tourism Research Institute show that Chinese independent travel to Australia, one of the top 10 fastest-growing destinations for Chinese tourists has risen to 58 percent so far this year, versus 43 percent in 2014.

For the United States, independent travel was 78 percent of Chinese arrivals in the second quarter this year. Ten-year visas, which the Obama administration began offering Chinese travelers in 2014, helped spur more independent Chinese trips to the U.S.

The current trade war between the Trump administration and China likely isn’t impacting U.S. trips, at least not yet, said Chris Ledsham, chief communications officer of the Chinese Outbound Tourism Research Institute.

“Independent travelers aren’t taking these considerations and these younger travelers aren’t necessarily influenced by what’s going [with the government,” said Ledsham. “People will plan their trips quite carefully and will plan months in advance. Keep in mind you also still have families coming to visit Chinese students at U.S. colleges.”

The United States remains one of the top 10 overseas destinations for Chinese travelers, but a U.S. vacation is no longer as prestigious for some Chinese travelers, which could be one reason for a decline so far this year, said Ledsham. “A few years ago there were a lot of bragging rights,” he said. “Now it’s about saying ‘here’s me ranching in Montana.’ It’s more about moving beyond the gateways.”

Alina Xiang, president and CEO of East West Marketing, a Beijing-based Chinese marketing agency, echoed Ledsham’s thoughts about the trade war. “Independent travelers are less politically sensitive and Chinese are actually less sensitive to politics compared to Europeans,” she said. “The Chinese are more concerned with safety. I think any talk of the trade war impacting tourism is all speculation right now.”

“Group travelers aren’t necessarily more sensitive to politics and most are first-time visitors. But maybe they won’t apply for the visa and will hold-off,” added Xiang.

Europe has also seen growth in Chinese independent travel as 31 percent of Germany’s Chinese arrivals were independent in 2014 but 41 percent were independent so far this year, while France went from 54 to 55 percent in the same period.

“With Europe, many Chinese travelers are doing a tour of Europe anyway and visiting multiple countries and that is likely why the United States has a higher percentage of independent travelers,” said Ledsham. “The U.S. is a bit of an anomaly because it’s one country.”

What’s driving the Independent Chinese Travel boom?

Xiang said sporting events are a driver in why independent Chinese travel has grown in long-haul destinations like the United States. She worked with Chicago last year to run a campaign in China that attracted more than 1,300 Chinese runners to run the Chicago Marathon because the city saw the growth in independent Chinese travel.

“China is ready for more campaigns that showcase more than just the landmarks,” said Xiang. “Mothers realize that sports are really good for their kids. Lots of Chinese go to the U.S. to watch the Super Bowl but I don’t think many of them understand the game, it’s just a way to show off on their social media. I think the winter 2022 Winter Olympics in China will be very popular and all Beijing schools are also promoting skiing.”

Road trips are also an allure for U.S. vacations for independent travelers. Xiang’s team partnered with Didi Chuxing, a major Chinese ride-sharing company, last year to educate Chinese travelers on self-driving trips and created about 1,300 self-driving itineraries for independent travelers. U.S. tourism boards for Los Angeles and Oregon provide information about self-driving travel through their Chinese social media accounts.

Klook, a Hong Kong-based tours and activities company with 60,000 offerings in more than 250 destinations, said that while shopping remains important for the overall Chinese market, unique tours and activities have become more important to independent travelers. “With the increasing experience in traveling overseas and accessibility to purchase overseas goods online, it’s clear that the Chinese traveler is shifting their preference away from shopping, heavily towards unique experiences,” said Anita Ngai, chief revenue officer at Klook.

Ngai said short-haul destinations such as Hong Kong, Macao, and Taiwan have been top destinations for bookings with independent Chinese travelers and Klook has also seen growth in long-haul bookings in Iceland and Russia.

Like most independent travelers in Asia, Chinese independent travelers are very social, said Ngai. “We’ve worked with many tour operators globally to add a photo-taking element into their services because, from our user reviews, we see travelers commenting more positively if operators offer to take photos for them,” she said.

Creating experiences for independent Chinese travelers

China made The Savoy, London’s list of top 10 origin markets for the first time in August 2018 and that growth was fueled by independent travelers, said Philip Barnes, regional vice president and managing director of The Savoy. “For us, China wasn’t even in the top 20 a year ago,” he said. “We’re not talking about huge numbers, but really talking about it being on the screen.”

United Nations World Tourism Organization data show France, the United Kingdom, Germany, and Italy were the top destinations for Chinese travelers by the first destination on a European trip in 2016.

Barnes said his hotel hasn’t hosted many Chinese tour groups because they often don’t use luxury hotels. “We work with agencies in Hong Kong that only deal with first class and business travelers,” he said. “They are looking for experiential travel that is different from what else they’d find around the world. Many Chinese travelers moved away from educational travel and more to things catered towards the individual. When they travel they’re generally multi-generational.”

Striking the right balance of making Chinese travelers feel at home while giving them a unique London experience is something Barnes and his team are constantly working towards. “We are catering to them with Chinese breakfasts but they’re also looking for the local food,” he said. “We’re not trying to apply things that aren’t there that they’re familiar with, we’re trying to apply experiences that are unique to the destination.”

The Savoy will celebrate its 130th anniversary in 2019, and as a historic hotel it has a leg up as an iconic London institution, said Barnes. “But recently we’re really trying to create experiences through new ideas and thought processes rather than dwelling on the past,” he said. “We have a number of residency programs. We have artists in residence and currently have a writer in residence. We try to offer new programs bearing in mind that people are very busy.”

Barnes said the hotel is also introducing a Savoy board game next month that he believes will be a great fit for the Chinese market. “It’s basically like Trivial Pursuit,” he said. “About 70 percent of the questions are about The Savoy, and 30 percent are about London. We’re talking to a lot of our partners who we have long established relationships with on how we create new experiences. We’re only limited by our imaginations.”

China’s Golden Week, an annual week-long holiday in the country that occurred earlier this month when China’s government encourages people to travel, will provide more insight into the growth of independent travel around the world in the latter half of this year as data becomes available in the coming months.