How Chinese Millennials are Reshaping the Hotel & Travel Industry

Rise of the ‘Travelling Class’

They’re spending more and travelling farther. There is no longer just one type of “Chinese traveller” – the democratization of international travel in China has meant that brands courting a Chinese tourist now have to get smart about what type or types of traveller they want to go after, and then think hard about how best to do it.

Melia China 2015 Melia China 2015

Even with China’s recent economic slowdown, growth in international travel has continued apace with over 70 million Chinese tourists spending $215bn outside Mainland China in 2015, a 53% rise from the $140bn spent in 2014 (World Travel & Tourism Council). By 2020, an estimated 200 million Chinese people will travel overseas for leisure every year.

Gran Meliá Xian Lobby

Gran-Meliá-Xian-Lobby

Underneath the broad umbrella of “Chinese traveller”, it is important to note that 50 percent of all Chinese outbound tourists fit into the millennial category, with ages ranging from 15 to 29 years old, according to GfK[i] Specifically targeting the younger generation of Chinese travellers offers attractive incentives for the travel industry, particularly since more than two-thirds of this segment occupy the high-income bracket. And this statistic is expected to rise as the Millennials continue to advance in their careers.

GranMeliaPalacioDeLosDuques-FrontDesk

Gran-Melia-Palacio-de-los-Duques

With a greater volume of Chinese travellers going abroad, more and more, especially the younger generation, are expressing a preference for unique, novel, authentic and personalized travel experiences to set themselves apart from their peers. Post-80s and -90s travellers are seeking more novel experiences, including adventure travel, polar exploration, and road trips.

Hotel selection is another key decision-making factor and China’s travellers are expecting a comfort-level equivalent to the best lodging experience at home. The condition of the room is the number one factor, followed by hotel service, hotel location, high-tech facilities, and the hotel’s design and style.

ME Milan

ME-Milan

For hotels going after Chinese tourists, it has become increasingly important to understand the various types of Chinese tourists and which types are right for your brand and its propositions.

Bernardo Cabot Estarellas, APAC Senior Vice President, Meliá Hotels International, believes any hotel’s product and service offerings need to be founded on clear understandings of the shifts in what today’s travellers want and expect: “Today’s travellers belong to many different demographic groups (Baby Boomers, Gen X, Gen Y, Millennials, Gen Z) and, also, to different psychographic segments. This means the more segmented the hotel offer is, and the more customer profiles it caters to, the better.”

The Center for Hospitality Research at Cornell University found that delighted guests spend 50% more in ancillary revenue than those who are “just satisfied”. This figure is also 75% more than unhappy guests. Plus, those who have had a memorable experience tend to spend even more on repeat visits.

Mr. Cabot added that it is all about the brands for the right segment. “For each one of these demographics and psychographic segments, Meliá has a brand that will suit the experience they’re looking for. Thanks to our brand strategy, our hotels don’t only differentiate from the rest, but also cater to a definite customer profile. Doing so, we earn their loyalty. And exceeding guest expectations is the most important.”

Increasing Connectivity

Globalization and technology are shrinking distances and travel routes are being redrawn.

New routes and destinations will continue to make international travel easier and more convenient for the new traveller. On top of this, an increasingly sophisticated understanding of modes of transportation, different accommodation options, unusual destinations, cost ranges, and other travel options is spreading with the rapid uptick in Internet access and the number of mobile devices around the world. With these shifts in preferences, the millennial travellers are accessing & sharing experiences more readily.

Chinese travellers, for example, are often influenced by the experiences of others, and this is happening across offline and online social networks, as well as online forums and review sites. Indeed, young Chinese travellers get most of their travel information digitally, largely from official WeChat subscription accounts (48%), WeChat Moments shared by their friends (47%), and websites (42%). 3rd party apps such as CTrip, Qunar and Tuniu are also important information channels.

To be where the Chinese millennial travellers are, Meliá Hotels International is actively engaged on Chinese social media platforms WeChat and Weibo. Through these social channels, Chinese Millennials are able to share their own experiences at Meliá hotels around the world, creating buzz and excitement for the luxury properties, having generated over 23 million views in 2015, and engaging 920,000+ consumers and raising its brand awareness in China.

In 2016, Meliá Hotels International celebrates its 60th anniversary. In six decades, the Spanish hotel group has grown from a small company to a multinational group with nearly 100,000 rooms in 43 countries – in part because Meliá understands the nuances in travellers and industry shifts. By providing each guest with unforgettable experiences that they cannot find elsewhere, Meliá’s guests – the Millennials in particular – have become the brand’s ambassadors.