New research from the China Outbound Tourism Research Institute (COTRI) suggests luxury brands will need to start paying more attention to China’s affluent travelers from second- and third-tier cities. Their report reveals that out of the more than 200 million trips expected to be taken out of China by Chinese travelers this year, more residents of second- and third-tier Chinese cities are trekking to overseas destinations as flight connections become more flexible and favorable to these tourists. On their itineraries are Asia’s popular holiday spots, but the United States, Australia, and an increasing number of cities in Western Europe are also seeing similar tourism patterns.
The attribution of this influx to the availability of direct flights is especially of note, given that on the whole, options are still limited for travelers not living in cities like Chengdu or Urumqi. According to the report, this means these outbound destinations “will form particularly important hubs for travelers from such source cities until direct connections with more non-Asian destinations are established.”
The “COTRI Market Report” identifies four cities as first-tier (Beijing, Shanghai, Shenzhen, and Guangzhou), and 12 Chinese cities as second-tier (Chengdu, Chongqing, Wuhan, Tianjin, Xangzhou, Xi'an, Suzhou, Nanjing, Dongguan, Xiamen, Kunming, and Qingdao). China’s remaining cities were labeled as third-tier or lower.
The most favored European destination by second- and third-tier tourists cited by COTRI—France—has long been a known dream destination for China’s affluent travelers. Yet it seems that first-tier travelers are moving on because France sees 40 percent of its tourists coming from second-tier cities, and just 31 percent are coming from first-tier. Overall, France’s capital is gaining appeal and consistently tops travel wish lists for affluent Chinese, including Hurun’s Chinese Luxury Traveler 2015 report. The number of bookings made through China’s leading online tourism company, Ctrip, to Paris during Golden Week tripled compared to last year.
Meanwhile, the second- and third-tier travelers that do stay in Asia are more likely heading to Southeast Asian countries like Thailand and Malaysia, both of which see a higher proportion of second- and third-tier tourists than first-tier. The number of direct flights available from second- and third-tier cities to a variety of cities in Thailand is the highest in Southeast Asia, with most flights coming out of Chengdu, Wuhan, and Chongqing. Still, Southeast Asia isn’t doing great overall in terms of attracting Chinese tourists—the number decreased from 6.4 million in 2013 to 6.2 million in 2014, according to the FT.
Hong Kong, a place that has been struggling with an overall drop in visitors from the mainland, has seen a split in the number of travelers from first- and third-tier cities (around 40 percent each), with second-tier city visitors accounting for less than 20 percent. Macau also shows a similar tourism pattern, except that its number of third-tier travelers is much higher, accounting for nearly half of all of its Chinese mainland visitors.
In Northeast Asia, Japan and South Korea still attract primarily first-tier visitors, most likely due to the prevalence of direct flights from Shanghai, but they are also seeing strong numbers in terms of visitors—and direct flights—from second- and third-tier cities. There are 29 direct flight options from second- and third-tier cities for South Korea and 21 for Japan. Most direct flights to Japan head to Osaka, while tourists who start the first leg of their journey in Shanghai can go straight to Tokyo.
According to COTRI’s prediction, “the trend of increasing numbers of Chinese tourists arriving from second- and third-tier cities will continue,” meaning that for retailers and hoteliers across the world, “it will become even more crucial to effectively satisfy these customer groups’ needs and expectations.”