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China’s Millennials: A Global Travel Force

December 21, 2017
Chinese millennial exploring a new city
Chinese millennials, with their high disposable incomes and a taste for jet-set lifestyle, are driving up global travel industry growth. (Photo credit): Chuewong

Chinese millennials are driving a global travel boon—here’s how you can reel them in.

China’s millennials are super consumers—which also makes them super travelers. Thanks to their growing taste for the jet-set lifestyle, they have helped drive up global travel industry growth: China’s travel industry is expected to outgrow all other major economies’ from 2017 to 2027. China’s more than 400 million millennials, who already comprise 60 percent of China’s total outbound trips, are also expected to make 70 percent more trips abroad in 2020 than in 2015. Coupled with their higher levels of discretionary spending (they often spend over $14,000 during international trips), Chinese millennials are becoming travel industry tastemakers. For businesses in the industry, attracting these high-spending consumers is imperative to future success.

“In terms of travel, they are really going to be the leading force for the next decade,” says Charlie Gu, director of China Luxury Advisors, a China-focused consumer consultancy firm. “For brands who want to reach Chinese consumers, millennials are definitely a demographic to look at.”

Hey, big spenders

The main reason Chinese millennials are able to travel so much isn’t because they are considerably wealthier than their counterparts (although, China’s per-capita disposable income is on the rise), but because they have fewer expenses.

According to Forbes, college in China is relatively affordable and parents can cover the entire tuition cost—which means no debilitating student debt. Secondly, most Chinese millennials live with their families, so they also save money on housing costs.

“We noticed that millennials tend to outspend their parents and grandparents by a lot,” Gu notes. “Part of it is because they are the first generation to have a professional, white-collar job earning high income. Also, a lot of millennials live with their families, so they don’t have burden of buying a house and have much more disposable income which they can spend toward travel.”

Gu also adds that Chinese millennials aren’t a force to be reckoned with just because of their spending power—they are also influencers. “Millennials often are the first generation that speaks English and are able to communicate when they travel abroad,” he explains. “They are often the decision-makers and global experts in their own family, providing insights, recommendations [and] guidance, in terms of shopping, traveling, and trip-planning.”

Living la vida loca(l)

According to Gu, Chinese millennials increasingly favor experiential travel, rather than going abroad just to shop. “They’re looking for uniqueness when they travel,” he says. “We see a lot of millennials looking for that local experience when they travel to a foreign country. They want to live like a local, feel that authentic lifestyle, something that they’re not used to living in China.”

That “local experience” covers a range of things, anything from enjoying the scenery via hiking trips, to going on a neighborhood foodie tour. For East West Bank client Pacifica Hotels, embracing the local color via décor is key to differentiating themselves from the competition.

“We take a lot of time developing design schemes at our properties that reflect the local culture and/or neighborhood,” says Adam Marquis, executive vice president of investments and acquisitions at Pacific Hotels. “For example, in Venice Beach at our Kinney Hotel, we have a 40-foot mural of a famous local skateboarding legend painted on the exterior of the building [to pay] homage to the history of skateboarding in the area.” The unique décor heightens the guests’ experience and encourages them to share their travels—and where they are staying—on online and social platforms.

In fact, Gu attributes these digital platforms to the reason why Chinese millennials have become such avid travelers. “Social media has provided tons of content that made them start to see the possibilities [of travel],” he says. “Because information has become a lot more transparent, it’s much easier for them to seek out those local experiences—it’s also made it a lot easier for them to share that experience with their friends and family, and start that positive word-of-mouth.”

Sharing is caring

China is big on the shared economy, whether that’s bikes, taxis, or accommodations. Amongst young Chinese professionals, co-living has been quite popular, and that is translating into travel, as well. Companies like Airbnb, which lists accommodations that range from shared guestrooms, to entire luxury mansions, are ramping up their China efforts to take advantage of shifting millennial tastes towards authentic, local experiences. However, traditional hotels can also capitalize on this by promoting a sense of community amongst the guests.

“What kinds of social experiences can you do?” asks Gu. “Do some social things, like wine/cocktail hours in the lobby. Some hotels have kitchens that people can share and cook meals, or have a more open-style lobby where people can have breakfast at a large community table.” Hotels can also reposition themselves as a “hotspot” if they open cool bars or restaurants that both locals and guests can enjoy. Gu says that a good example is the LINE Hotel in Los Angeles, which transforms its lobby into a nightclub after dark and opened popular restaurants like Commissary and celebrity chef Roy Choi’s POT.

Pacifica Hotels intends to capitalize on the surge in co-living accommodations with their upcoming Wayfarer property (which is Pacifica’s brand of upmarket, hostel-style hotel) in Downtown Los Angeles. “I think Chinese and other overseas travelers are embracing the notion that the guest room can be communal, but safe and fun at the same time,” says Marquis. “When planning for the Wayfarer DTLA, we were excited to offer a higher-end, multi-bed accommodation concept that embraced the attributes of communal living. It’s our hope that guests will want to bunk together, cook together, grab a drink at the rooftop bar together, etc.”

Gu supports that sentiment. “When [Chinese millennials] come to a destination, especially when they travel for leisure, they want to have that interaction—even social life—with other guests,” he emphasizes.

Getting personal

Personalization is also key in attracting the Chinese millennial demographic, and that can range from offering customizable travel experiences, to reaching out to consumers on the platforms that they are most comfortable with.

Since, in China, things like Google and Instagram are blocked, it’s imperative to have localized content on local platforms if you want visibility for your business overseas. For example, Pacifica Hotels makes sure that, when developing SEO campaigns, they optimize them for Baidu (Mainland China’s biggest search engine), as well as Google, and build “actual Chinese websites so that travelers can understand the hotel content, experience, and offerings more easily,” says Marquis.

Gu adds, “You want to make sure that you have content and that people talk about you in the travel forums.” He suggests sites like Dianping, which is the Chinese version of TripAdvisor, and Qyer and Mafengwo, which are user-generated travel platforms that are popular with Chinese millennials. Gu says that companies can also partner with other travel-related platforms like Zuzuche, a Chinese rental car platform, since Chinese travelers are increasingly inclined toward using rental cars when traveling abroad because of the independence it affords them.

Offering a personalized experience can also be as simple as knowing guests by name, which encourages word-of-mouth marketing. “Each of our hotels is also charged with making good impressions on international travelers when they stay with us,” says Marquis. “Things like remembering each guest’s name, striking up informal conversation, and responding to guest stay reviews in a timely manner are all key to promoting word-of-mouth.”

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