Worldwide, the numbers are still being crunched by tourism boards, tour providers, airlines, hotels, and retailers—but this Golden Week is widely considered to have firmly established the first week of October as an annual financial bonanza for the travel industry. So what did we learn? Well, a few new things—plus confirmation of a few already developing trends. Essentially, we learned that the world is becoming better attuned to the surge of outbound tourism from China—and is eagerly awaiting the next mass installment: Spring Festival.
1) Short-haul travel counts the big numbers. In the travel industry, air connectivity is king and Northeast Asia offers the largest selection of air seats for Chinese travelers. So it’s little surprise that Hong Kong and Macau (both of which can also be reached overland) scored big with Golden Week holidaymakers, while Taiwan, Korea, and Japan enjoyed impressive visitor numbers. Despite the Occupy Central protests and reports of reduced retail sales, Hong Kong received over 1 million Golden Week arrivals from China, while Macau welcomed more than 750,000 arrivals. Also close to home, Tibet received 740,000 arrivals (449,000 of whom were day-only visitors) and Hainan welcomed around 530,000 mainland tourists.
3) This year’s domestic travelers may be next year’s outbound tourists. Any business interested in attracting Chinese travelers should watch the trends in domestic tourism, as developments in China increasingly influence outbound travel. About 475 million Chinese made a trip during the holiday, up 10.9 percent from the same 2013 period. Of these domestic tourists, more than 99 million spent at least one night in a hotel, and around 375 million—roughly equivalent to the combined populations of Indonesia and the Philippines—traveled for less than one day. A total of RMB510 billion was spent on UnionPay cards in China during Golden Week, with cardholders from Guangdong, Zhejiang, and Jiangsu being the biggest spenders, according to local media. In the first six days of Golden Week, 29.3 million people visited key tourist sites, while Hainan’s two duty-free shops received around 150,000 visitors.
4) Chinese overseas tourism investment has a focus on luxury. China’s Anbang Insurance grabbed global Golden Week headlines by agreeing—subject to a U.S. security review—to pay US$1.95 billion for the historic and legendary Waldorf Astoria in New York. Meanwhile, Dalian Wanda paid EUR265 for the Edificio España tower in Madrid, which will be converted into a hotel and offices. In addition, Chinese buyers have made a spate of tourism-related investments across Europe in recent years, and have purchased hotels in Los Angeles, Australia, Dubai, and the Bahamas. This is likely to be just the beginning, so watch this space.
5) Golden Week interest is rising globally. The world’s tourism authorities are transfixed by the potential revenues to be earned from Chinese travel—and for many of them, Golden Week is aptly named. At the end of September, the Germany-based China Outbound Tourism Research Institute (COTRI)—a global network of travel and tourism providers specializing in services for Chinese travelers—hosted a 12-hour China Outbound webinar. Jointly sponsored by the China Outbound Travel and Tourism Market (COTTM) exhibition and TripAdvisor China, the marathon information session showcased the different ways that tourism providers in 24 countries—ranging from Australia, the UK, and the United States to Kenya, Iran, and Slovenia—are tailoring their products and services for Chinese travelers. Interest in this trend is clearly high: the webinar attracted 12,500 viewers from 100 countries worldwide.
6) Preparation levels for Golden Week remain variable. While most airports, hotels, tour operators, and leading retail brands in major cities had planned and promoted special discounts and packages for Chinese travelers and UnionPay cardholders in advance, many tourism-related companies remain unsure whether to treat (and budget for) October Golden Week as an annual revenue stream. I hosted a pre-Golden Week travel seminar in London in association with China Daily, and was surprised to learn that the marquee brands really “get it” and have adopted a multi-channel approach to promoting their services in China, especially in advance of key Chinese travel periods. Many late movers, however, (notably advertising service providers and retail brands with either no presence or only a low-key presence in China) are confused about whether to proceed under the umbrella of a national tourism board or develop their own positioning strategy for Chinese consumers.
7) Chinese tourism is prefacing new legislative changes. The surge of Chinese outbound tourism and investment is influencing changes to the global legislative landscape. Numerous governments have amended their visa regulations to attract more Chinese tourists, while Australia recently unveiled its new “premium investor visa” offering residency to Chinese investors. During Golden Week, Japan—which recorded an 84 percent year-on-year increase in Chinese arrivals in the first eight months of 2014—expanded the scope of tax-free shopping for tourists to include consumables, such as foods and cosmetics, in addition to home electrical appliances, while Korea—which is hoping to improve upon 2013’s record 4.3 million Chinese visitors—announced it will issue more licenses for downtown duty-free stores.
8) China’s cruise industry is primed for growth. China is on target to become the world’s largest cruise market in the next decade. Luxury cruise lines are placing bigger ships onto Asian routes and during Golden Week Shanghai announced plans to develop a locally based cruise company, Nanjing declared its intention to build an international cruise port, and Ctrip—which has purchased its own cruise ship, Celebrity Century, and set up a management joint venture with Royal Caribbean—launched a booking platform for global cruise voyages. Just after Golden Week, it was reported that cruise company Carnival will provide China State Shipbuilding Corporation with design expertise to help create a China-built cruise ship, while Tianjin (China’s number-two ranked cruise port for total passengers) is extending its cruise season and Hainan is developing new transnational cruise routes.
9) The United States is poised for a Chinese inbound surge. Palpable excitement about Chinese travel has become noticeable in the previously reticent U.S. media. Almost 1 million Chinese visitors arrived in the United States during the first six months of 2014, up 23 percent year on year, and the United States was recently voted the third most satisfactory destination for Chinese tourists in a survey by the China Tourism Academy. Chinese visitation is expected to top 2 million this year, up from 1.9 million in 2013. During Golden Week, U.S. stores, hotels, and attractions—especially in Los Angeles and New York—reported booming business from Chinese tourists. Adding to the hype, Woqu, a Chinese travel site that provides services for independent travelers to the United States, received a significant pre-Golden Week investment from Tencent. Other countries are taking notice of the United States’ success: during Golden Week, Australia’s Sydney Morning Herald noted its concerns about inroads the United States is making into the Chinese travel market by noting Australia should “reform its visa system to give easier access to Chinese tourists because growth is lagging compared with Chinese visits to North America.”
Gary Bowerman is author of The New Chinese Traveler: Business Opportunities from the Chinese Travel Revolution, which was published in late September by Palgrave Macmillan.