Exotic locations on the rise
This year the hoteliers survey revealed a growth in Chinese guests at hotels around the globe with travelers continuing to visit familiar regions, but also visiting new, more exotic locations in growing numbers. Millennials in particular are seen to be choosing more exotic destinations and demanding new services. The survey also revealed there are some significant gaps between the services and facilities hoteliers are providing and those that Chinese visitors believe need improvements.
On a global scale, around 83 per cent of hoteliers have Chinese guests, which is 4 per cent higher than last year. APAC has by far the most Chinese guests, occupying 15 per cent of APAC hotel business, compared with other regions where Chinese guests comprise only 3-6 per cent of business. Latin America, while still having a reasonably low occupation rate of Chinese guests, has seen a strong growth in the past 12 months, with Chinese visitors shifting from 0 per cent to up to 5 per cent of business.
Percentage of business from Chinese guests (mean)
Latin America growing in popularity
Altogether, 42 per cent of hotels experienced a growth in the number of Chinese guests, a median increase of 10 per cent compared with the previous year. In APAC 51 per cent saw a growth in numbers, which was significant but lower than the previous year, no doubt because it is such a mature market. Latin America saw the biggest shift, with 44 per cent of hoteliers reporting a growth in Chinese visitors, a 21 per cent increase compared to the previous year. Both the EMEA and the US experienced a slowdown in the growth of Chinese visitors.
More Chinese millennials visited hotels around the globe, with 43 per cent of hotels reporting an increase in this age group, up 12 per cent compared to the previous year. Latin America had the most growth in millennials, with 41 per cent of hotels reporting an increase, up 14 per cent compared to the previous year. Interestingly, while EMEA had a slowdown in Chinese visitors overall, the number of millennials increased compared with the previous year.
Hotels seeing growth in Chinese guests
Exchange rates impact travel destinations
Relaxation of visa requirements has replaced marketing as the top factor impacting the hotel industry, with 44 per cent of hoteliers citing it as significant.
As the exchange rate for Chinese currency has been reasonably stable against developed nations, this has been less of a factor impacting hotels. However, 40 per cent of hotels in Latin America, where the exchange rate has fluctuated in a number of countries, cited exchange rates as a significant factor. In both Brazil and Mexico, for example, fluctuations in the exchange rate have made it more expensive for Chinese travelers over the past 12 months.
Apart from Chinese travelers, hoteliers have identified the top countries where they see the most potential for growth in inbound tourists. This includes Asian travelers (from Japan, Hong Kong and Singapore) to APAC and travelers from Europe, Russia and the US to North America and LATAM.
Top countries where hoteliers see the most potential for growth in inbound tourists
Sightseeing and dining the most popular services
Another interesting trend in the survey is an increase in leisure traveling in EMEA and an increase in combined business and leisure travel in North America, up 7 per cent and 8 per cent respectively compared with the previous 12 months. This could be as a result of the growing preference of post 1980s millennials who, as revealed in this year’s consumer survey, are using their increased earning capacity to travel to western Europe, the US and Canada.
Enquiries regarding private tours are more common in APAC and those for organized tours more popular in the EMEA and the US. The main activities Chinese hotel guests enquire about overall are dining, sightseeing and shopping. Dining and sightseeing align with what Chinese travelers in the consumer survey cite as their top preferences but is mismatched with shopping, which has significantly declined in importance for Chinese travelers in this year’s CITM.
Most enquired services by Chinese travelers
What Chinese guests want
Chinese guests are increasingly skilled in English and are looking for value for money, according to hoteliers in this year’s survey. This is particularly true in the US, with 52 per cent and 42 per cent of hoteliers citing these two behaviors as changing the most compared with the previous year, respectively. A higher interest in eco tours was also more prominent in the US compared with other regions.
In terms of what guests expect from hotels, free Wi-Fi, Chinese breakfast, a kettle and travel guides are still the top requests. Even though travelers are observed to have better English, they still demand Mandarin speaking staff in Asia Pacific countries, particularly where staff are less sophisticated in English.
Interestingly, these findings vary from what consumers say in this year’s CITM. Chinese payment facilities is at the top of the list for consumers but is number 7 in the hotelier survey, while having a Chinese restaurant on site is number 5 for travelers and towards the bottom of the list for hoteliers.
Traveler requests are also obviously influenced by their age and traveling preferences. For example, travelers to Latin America are usually younger, more adventurous and looking for local experiences and flavor so are less likely to request Mandarin speaking staff, translated tour guides or Chinese TV programs. On the other hand they are highly likely to expect free Wi-Fi.
Hoteliers identified the in-house restaurant as the service where their guests spent the most money. Given that travelers who responded to the consumer survey said this is also where they spent the most but believed it was also the service needing the most improvement, it is a key service gap.
Hotels investing in social media not services
Hotels are prioritizing Chinese social media and marketing programs to attract Chinese visitors in the next 12 months, though hotels say their investment in services for Chinese guests has decreased, with only 4 per cent spending more than US$10,000 (¥68,848) compared to 12 per cent last year. With less investment in hotel services, the risk is that existing service gaps will become larger. For example, overall 21 per cent of hotels will be prioritizing social media when allocating hotel resources, while only 7 per cent will spend on providing UnionPay facilities (the service Chinese travelers see as needing most improvement). For two other services considered very important by Chinese guests, Chinese cuisine and Mandarin-speaking staff, hotels intend to allocate only 4 per cent and 10 per cent of resources respectively.
Where are the gaps?
The report identified key areas where hotels could improve their services, according to Chinese travelers:
Chinese travelers’ top needs (Wi-Fi, breakfast and kettle) are being catered to. Future improvements focus on translated materials such as hotel website and tourism guides. One of the top required improvements identified by Chinese travellers surveyed is an on-site Chinese restraurant, which is not a service many hoteliers currently offer or plan to offer.
Services / products "already offered" versus "plan to offer"
Variation across regions
How much Chinese travelers’ needs are catered to varies widely across the regions. Hoteliers in APAC are the most keen to cater to Chinese travelers, especially to their cultural values – for example, removing unlucky numbers and providing cultural awareness training to staff. They will also organize specific services and events for Chinese guests traveling independently, with 23 per cent saying they do this compared to 19 per cent in EMEA, 17 per cent in the US and 11 per cent in Latin America.
Employing Mandarin-speaking staff was also much more of a priority for APAC hoteliers with 23 per cent offering this service compared to 5 per cent in EMEA, 1 per cent in the US and 11 per cent in Latin America.
In terms of what hotel services guests want, restaurant and Wi-Fi / internet access are where Chinese guests spend the most. The main variation in other services is in Latin America where services such as hotel bar, spa, room service and minibar are low-spend services compared to the other regions. Given that the profile of Latin American hotels in the survey tend to be in the lower tiers, these services are less likely to be on offer.
Activities / services / facilities Chinese guests spent the most on
Millennials: How do they behave?
Chinese travelers: Under 35 vs over 35
Click to enlarge
Chinese millennials vs millennials from other countries
Click to enlarge