The meteoric rise of the Chinese tourist
Tourism is booming – and it’s a massive contributor to the global economy. For the last seven years, the travel sector has outperformed the overall economy. In 2016, it contributed as much as $7.6 trillion to the latter, according to the World Travel & Tourism Council. And, if it is to be believed, nearly a quarter of all the jobs created over the next decade will be related to it. What’s driving this worldwide explosion in holidaymaking? In large part, the answer is China.
China alone contributes over a fifth of global tourism spend. The extent to which this is powering the trend becomes clearer when you realize that it outspends the next country on the list – the U.S. – by a factor of two. This is all well and good, but it takes on a new scale when you look at the Chinese outbound travel market’s potential for growth: despite its position as the world’s absolute travel-spend juggernaut, China is only just getting started. About 5% of Chinese have passports, and the government is issuing 10 million new travel documents a year.
A huge factor in modern travel is technology. Gone are the days when travellers could be found leafing through tattered copies of out-of-date Rough Guides, or relying on word-of-mouth to figure out where to go. Now, they’re on their smartphones: checking in on social media, finding accommodation on Airbnb, and downloading the latest travel apps for inspiration. Even the local cuisine is being snapped in real-time on iPhones and Androids and uploaded to Instagram.
This has a powerful implication for players in the sector: knowledge is power. China’s own online travel giant, Ctrip, is a great example of how companies can use it to choke out the competition. Ctrip’s head of destination marketing, Jenna Qian, says: “We have all of the user data. From dream to research to booking to sharing, it all happens within our platform. Big data is the foundation of tourism.”
The company, which dominates the Chinese travel sector, wants to push this phenomenon further. Qian says: “Right now, users search for information. Going forward, we want the right information, the relevant information, to be pushed to them, so they don’t even need to look for it. That’s the essential goal.”
Dominion holds Ctrip in its Global Trends Luxury Fund.
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