This piece was originally published on our sister site, Jing Travel. For more information on the business of global Chinese travel, please visit the Jing Travel site here.
Editor's note: The rising FIT (Free Independent Travelers) travel trend in China represents an untapped opportunity for luxury brands. In this story, it is noted that the majority of FIT travelers are Chinese millennials, a group who is projected to drive 55 percent of the expansion in China’s consumption spending over the next five years. To lure the Chinese FITs, luxury brands need to take note of their eagerness for personalization and customization. Luxury brands should help consumers create unique experiences for FITS which would differentiate them from their peers. Megabrands, like Gucci and Louis Vuitton, are paving the way by offering travel mobile apps, providing customers and travelers alike with the chance of discovering the stories between the brands and global destinations. In addition, FITs' heavy reliance on WeChat for overseas travel itinerary planning shows luxury brands the importance of the app not only for their marketing efforts domestically, but also abroad.
With the introduction of the multiple-entry 10-year visa to the United States in 2014, Chinese visitors are returning and discovering new destinations. Even more significant, is the rise of the so-called the Chinese FIT (Free Independent Travelers).
As a result, Brand USA, an organization dedicated to marketing the U.S. as a premier travel destination, is promoting the proximity of American destinations through its “All Within Reach” campaign.
The campaign encourages visitors to combine their visits with other nearby destinations by showcasing the many and often unknown experiences overseas visitors will have within a few hours of their arrival into the United States.
Although 60 percent of Chinese consumers still prefer to travel on package tours to long-haul destinations mainly due to language barriers, more and more younger visitors, especially millennials, are opting to travel as FITs. This gives them the opportunity to create their own customized itineraries that are not bound to rigid schedules.
The growth of FIT travel is further demonstrated by data showing the growth of the 2.1 billion online car rental industry, which grew by 88.6 percent in 2016. According to TripAdvisor China Unbounded, nearly half of Chinese FITs plan to take more trips abroad and 52% will stay for longer periods. Currently, 40% stay 4-6 nights abroad.
Millennials will drive 55 percent of expansion in China’s consumption spending over the next five years.
Compared to their parents, FITs are better educated, more affluent, and have better language skills. They tend to use online resources, like travel review sites, destination websites, and social media accounts, like those on WeChat, to plan trip itineraries.
WeChat’s popularity in China has made it the most important platform to engage and attract Chinese consumers. Younger Chinese travelers often research, plan and purchase their trip abroad within WeChat. Increasingly, mobile payment apps such as WeChat Pay have become an intrinsic part of their lifestyle and travel. This is another important means of connecting with Chinese tourists.
According to Charlie Gu, Director of China Luxury Advisors, who works with the Asian Art Museum in San Francisco, the museum launched its official WeChat account a year ago and has recently enabled WeChat payment for admission.
The WeChat payment allows visitors to have fast and easy access to the museum, and enjoy the extended amenities (e.g., audio guide and museum map) provided by the museum through its WeChat account.
Additionally, FITs also have a growing appetite for holistic, experiential vacations. These vacations include activities such as local tours, backpacking, self-driving tours, sampling new cuisines, experiencing local life, discovering “off the beaten path” attractions, and attending cultural events like the theatre and concerts. This demographic is willing to pay more to stay at upscale hotels and dine at high-end restaurants.
Also on the rise is the Semi-FIT. Similar to the FIT, Semi-FITs plan their own itineraries and explore destinations on their own but utilize the services of group busses as a form of transit from one destination to another.
The move towards FIT and Semi-FIT travel is great news for hotels and attractions that may benefit from travelers with more sophisticated tastes.
There are many U.S. firms that have recognized the growing interest among Chinese FITs to explore deeper in popular destinations.
For example, Warner Brothers Studio Tour in Hollywood launched a comprehensive China travel trade-marketing program earlier this year. The program kicked off with the launch of a Mandarin tour product that is fully customized to the interests of Chinese travelers.
The tour includes sets, sound stages, and exhibits of popular TV shows and movies such as Friends, The Big Bang Theory, Harry Potter, and Batman.
Additionally, Warner Brothers Studio Tour Hollywood also launched a WeChat official account to provide in-language visitor information. In April, the Studio Tour launched a live stream of the tour in partnership with Tours4Fun, a major online travel agency for Chinese travelers, to directly reach Chinese FITs.
Destinations, attractions, hotels, restaurants need to embrace these changes and step up their efforts to cater to these travelers to be ready to welcome this new wave of travelers, opposed to focusing solely on more “traditional” Chinese travelers dependent on packaged tours.
Because of the changing behavior and preferences of Chinese tourists, offering options to customize and personalize travel experiences is recommended to attract more visitors.
However, the most important takeaway from the rise of the FIT is that information about hospitality and attraction options needs to be easily available in Chinese on Chinese search engines like Baidu and Chinese social media, WeChat being arguably the most important. High-quality videos that provide a good overview of hospitality services and transportation options can help to inspire travelers to come visit or purchase hospitality goods and services.