Oct 30, 2024: China Market Report

Latest Key News?

• Delta Airlines Restarts Los Angeles to Shanghai Flights with A350

Delta Air Lines will resume nonstop flights between Los Angeles (LAX) and Shanghai (PVG), China in June 2025. The airline will deploy its cutting-edge Airbus A350, featuring the most advanced onboard amenities.

Passengers traveling in Delta One can anticipate the new Delta One Lounge at LAX, while all travelers will benefit from recently completed airport upgrades designed to enhance comfort and streamline the travel experience.

The reintroduction of the Los Angeles-Shanghai route will expand Delta’s U.S.-China operations to 17 weekly flights. This addition complements the airline’s existing routes from Detroit and Seattle to China.

Source: AVIATION A2Z

• National Day holiday consumption displays China's economic vitality

China's just-concluded National Day holiday ignited a surge in consumer activity, fueled by a dynamic blend of travel demand and targeted incentives, highlighting the strong economic vitality of the world's second largest economy.

The holiday unleashed a travel frenzy. During the holiday period, a remarkable 765 million domestic trips were made, marking a 5.9 percent year-on-year increase, with total tourist spending surging 6.3 percent to 700.8 billion yuan (about 99.11 billion U.S. dollars).

Data from Trip.com , another leading travel platform, showed that outbound travel orders had surpassed 2019 level, driven by trips to popular destinations such as Thailand, Malaysia, Singapore and Australia.

The accelerated integration of culture, sports and tourism, along with evolving business models, is creating new opportunities for sustained growth, further consolidating the role of consumption as a key driver of the economy.

Source: Global Times

Outbound Market & Industry News?

• McKinsey: How is global tourism consumer behavior evolving?

The global tourism industry will continue its growth and recover to pre-pandemic levels.

At the recent 2024 TravelDaily Conference in Shanghai, Jackey Yu, Partner at McKinsey & Company, shared insights into changing consumer behavior in the global tourism market.

The tourism industry is experiencing steady growth, with leisure travel surpassing pre-pandemic levels, while demand for business travel continues to be affected by the long-term impact of remote work.

In his keynote, Mr. Yu categorized travelers into three segments: business, visiting friends and relatives (VFR), and leisure, and highlighted some interesting trends

The global tourism market is becoming increasingly diverse, with emerging markets gaining prominence as new source markets, according to Mr. Yu.

Content and social media are becoming increasingly important in the tourism industry.

Source: China Travel News

• Chinese wanderlust fuels Africa’s tourism ambitions

Chinese tourists are becoming a key target market for Africa’s post-pandemic tourism recovery, with flight bookings from China to Africa increasing by 1.2-fold YoY in 2024.

As Africa’s tourism industry seeks to recover and expand post-pandemic, a promising new market is emerging: Chinese tourists. The recently concluded Summit of the Forum on China-Africa Cooperation (FOCAC) has laid the groundwork for intensified cultural and tourism exchanges, with African nations eager to attract more visitors from the world’s second most populous country.

South Africa’s efforts saw Chinese tourist numbers reach 93,000 in 2023, up 204% YoY, with the number of Chinese arrivals in South Africa increasing 82% YoY between January and March of this year.?

To capitalize on this growing interest, African countries are investing in infrastructure and service improvements. As is the case worldwide, visa facilitation is a key focus area.

Despite the promising outlook, the potential for growth in China-Africa tourism is not without challenges. African destinations, though rich in natural beauty and cultural heritage, must address concerns about safety, infrastructure limitations, and the high cost of travel compared to other popular destinations.

Source: Jing Daily

• New York Tourism + Convention China Sales Mission

8 trade partners of NYC Tourism + Convention, including hotel, attraction participated in the Sales Mission in Guangzhou, Beijing and Shanghai from 23 September to 27 September to meet and engage with local travel professionals for mutual understanding and promoting New York.

The sales mission consisted of seminars, one-on-one meetings, receptions and VIP dinner in three cities.

As the 250-year anniversary of the United States is approaching, “History” will be the important theme in next few years and New York Tourism + Convention would promote various events and thematic experiences in next few years. Chinese travel trade could use this information to provide theme as “New York History” travel products and services in the market.

Inbound and Domestic Market

• Trip.com Group claims $4.3 billion annual value from membership program

User spending rose 10% annually before the pandemic.

Trip.com Group recently announced that the perceived value of its annual membership benefits has reached nearly RMB 30 billion (USD 4.3 billion).

Since the launch of its revamped membership program in 2020, Trip.com Group has developed a tiered structure including Diamond, Gold Diamond, and Black Diamond levels, each offering tailored benefits.

For each purchase made, users earn membership points that can be redeemed for discounts on travel products, exchanged for items in the membership mall, or used in point-based lotteries, allowing them to effectively "spend points as cash."

Source: China Travel News

• China looks beyond Hainan for duty-free success

A report from consultancy Bain shows that Hainan’s duty-free sales peaked in 2021, then dropped by almost 30% in 2022, and revived by 25% in 2023. The figures, based on Haikou Customs and government data, indicate that the duty-free business there was yet to come back to its 2021 peak.

Earlier this month, China Duty Free Group (CDFG) hit a major milestone – the 10th anniversary of the CDF Sanya International Duty-Free shopping complex. It is the main retail location in Hainan and has been the historical driver of duty-free sales on the island.

CDFG is hosting some big events through October to celebrate. They will include parades, branded pop-ups, and appearances by pop stars. The retailer is also promising 1 billion RMB ($142 million) in voucher giveaways – possibly the surest way to attract cash-strapped and/or cautious Chinese shoppers.

Source: Jing Daily

East West Marketing Insights

Q+A with Zoey Zhang, Trip.com

Trip.com is an international one-stop travel service provider, available in 24 languages across 39 countries and regions in 35 local currencies. Trip.com is one of the biggest OTAs in China and has an extensive hotel and flight network covering 3,400 airports in 220 countries and regions globally.

Q: How is the tourists’ travel demand after pandemic in 2023 and in 2024?

A: Based on the data from Trip.com , we can provide some outbound tourism market insight for 2023: The top 3 cities for outbound travel in 2023 is Shanghai, Beijing and Shenzhen. Holidays are the peak season for FIT to travel outbound, for example National Holiday, Chinese New Year, etc. U.S was ranking No. 6 destination in 2023 despite visa challenges.

In 2024 year to date compared with 2019, some recovery data of U.S booking are 73% of total number of pax, 91% of hotel revenue and 73% of air ticket revenue.

The most popular U.S. destinations on Trip.com include Los Angeles, San Francisco, New York, Boston, Las Vegas, Washington D.C., Chicago, Honolulu, Seattle, Orlando.

Q: Is there any new update on analysis or trends of Chinese travelers to U.S?

A: This year we found female travelers increase to almost 50% and visitor source top 3 cities are still Shanghai, Beijing and Shenzhen. 29% of travelers are around 80s and 28% of travelers are around 90s, which indicates the arrival of Gen Z.

For travelers’ booking behaviors: Average booking value increased 37% per trip and average booking lead time is around 50 days in advance. Most travel bookings by number of pax is for hotel and revenue mostly on flight ticket.

Q: Is there any change on tourists’ behavior or interest on the U.S travelling?

A: It’s been quite different than before for FIT travel now. Travelers are more in favor of unique experiences and intrepid journeys and desire to explore travel beyond the typical tourist attractions which is quite different from group tour packages. Also, travelers are requesting more customized itineraries when they travel, to seek for immersive or premium experiences and we see this trend across all types of travelers.

The other interesting point is that the retired group is the fastest growing market on Ctrip, consumers over 50 years old have more money and time to spend on their outbound trips.

Q: What’s the advantage of Trip.com to promote U.S travel for your members?

A:? Trip.com has self-automative monitoring system to track each booking on flight or hotel or ticket from real time which can provide the most updated respond and feedback to our members. Also based on each member’s preference of content searching on their mobile devices, we can input and introduce different contents to represent to them based on their booking behavior. We will also utilize our AI technology to help clients to make their decisions more wisely.

Q: what kind of assistance and support do you need to boost the travel to U.S?

A: We are more than glad to co-operate with U.S. Tourist Board or Partners as it will be more accurate to promote your selling points or attractions to correct target customers. We actually have done quite a few marketing campaigns with our partners globally and it would significantly improve the awareness and interactions with the travelers.

We also welcome to receive more product or itineraries to be integrated with our big data system. POI (Point of Interest) needs to be updated from time to time so the travelers could receive the most updated news or attractions’ information when they search online.

Notable Key Aspects

• Chinese travelers reshape forms for outbound tourism:

More and more FIT and tailor-made small groups are growing rapidly to travel outbound instead of normal big groups travelling which means Chinese travelers have more desire and requirements on the unique experience during travel instead of normal landmarks.

Despite the positive outlook, the potential for growth is not without challenges. U.S. destinations, though rich in natural beauty and advanced facilities, there are still quite a lot of concerns about safety, high local cost of travel compared to other popular destinations.

• Travel policies matters:

U.S. visa appointment time has been improved than before, but it is still not a short time.

In terms of desired destination content, favorable policies such as visa waiver or relaxed entry requirements and promotional offers were the most important.

Also, most Chinese are focusing on the U.S. presidential election in the end of the year and whether the new successor will bring new travel policies, especially during current period that the first issued 10-year visas will be in due and the new visa policies will matter to Chinese travelers.