Chinese consumers spend the most on travel: World Travel and Tourism Council

Editor's note: the article was updated to reflect the collaboration between the WTTC, the Bicester Collection and the Hong Kong Polytechnic University for the Global Retail Tourism report. Travelers from mainland China spent the most on shopping compared to other nationalities, at $1,350 per person on average, according to a newly launched report by the World Travel and Tourism Council in collaboration with the Bicester Collection and the Hong Kong Polytechnic University. With the Chinese borders opening up post-COVID this year, retailers worldwide will be able to see an uptick from inbound Chinese tourism. Rounding up the top three in retail tourism for the summer of 2022 are travelers from Argentina and the UAE, at $1,180 and $1,100 respectively. Prioritizing travel Before the borders closed in early 2020, almost 70% of Chinese shoppers’ luxury goods were purchased while abroad. As the pandemic continued, domestic luxury sales in China doubled to $68.25 billion between 2019 to 2021 according to consultancy Bain. Hainan was a popular travel destination during the pandemic, allowing Chinese to travel domestically and still take advantage of tax-free benefits. Opened in October 2022, its duty-free shopping mall in Haikou is said to be the world’s largest duty-free shopping facility, featuring brands like Cartier, Hermes, YSL, Prada, Burberry, Bottega Veneta, Moncler, Balenciaga, Maison Margiela and more. Now, the global easing of travel limitations due to COVID-19, coupled with China's latest border reopening, has reignited a once-suppressed desire for international journeys and a corresponding surge in shopping at key tourist retail hubs. At luxury shopping destination La Roca Village in Barcelona, Julia Simpson, President of WTTC, tells Jing Daily that “What our data shows us is that despite some inflationary pressures, we find that pent-up demand is still very strong. People are prioritizing travel.” Attracting Chinese consumers A price disparity of 25% to 45% for fashion items and leather goods between mainland China and Europe could also further fuel Chinese consumers’ desire to travel, as they seek better deals on top of gaining novel experiences in new destinations. More than that: in order to keep Chinese shoppers engaged, retailers should look towards delivering true omnichannel experiences. As Chinese shoppers have become used to phygital experiences in high-end luxury locations in Shanghai or Beijing, retailers should make sure to live up to the same expectations by delivering compelling in-store experiences to keep shoppers engaged. “Malls in China are very advanced in the field of 'retailtainment'. Some have even introduced zones like a ‘Husband Lost and Found’ to accommodate all visitors”, says Professor Haiyan Song from Hong Kong Polytechnic University School of Hotel and Tourism Management. Broadening payment methods to incorporate Chinese payment systems like Alipay and WeChat Pay, implementing WeChat mini-programs for shopping and increasing the number of Chinese-speaking staff, like the Bicester Collection is doing across its shopping location, is also a huge boon in attracting Chinese consumers. Alibaba's Tmall Global has also partnered with a limited number of premium outlets to streamline luxury shopping experiences. Through the partnership, Chinese consumers can buy products and have them delivered straight to their home in China, even if the shopping was done overseas. E-commerce will not replace retail tourism. An examination of tourist shopping patterns reveals that blending experiential tourism with retail is essential to satisfy the desires of retail tourists, according to the WTTC report. While online shopping enhances the traditional retail experience for travelers, the medium doesn't replace it. Tourists predominantly favor in-person shopping to enrich their travel adventures. Tax-free benefits Another significant benefit to retail tourism is the possibility of tax-free benefits, favoring duty-free department stores. The UK recently revoked its tax-free shopping for tourists and will stand to lose $1 billion annually from Chinese tourists. Chinese tend to travel predominantly within APAC. Bali, Bangkok, Chiang Mai, Kuala Lumpur, Manila and Singapore were some of the most popular travel destinations during this year’s Chinese New Year according to Chinese travel firm Ctrip. According to a recent report by Euromonitor International, duty-free sales within the Asia Pacific are projected to hit $81 billion by 2027. A significant portion of this figure is expected to stem from China. This amount represents nearly half of the anticipated global duty-free market value of $168 billion by 2027.

Chinese consumers spend the most on travel: World Travel and Tourism Council

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Published September 13, 2023

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Chinese consumers spend the most on travel: World Travel and Tourism Council