Why all Australian hotels should have a China strategy

Last week Hotels.com released their fifth annual Chinese International Travel Monitor. We touched on some of the main findings of this report in our Weekly Round-Up article this week (see here), however they’re worth repeating because they really highlight the massive opportunity for Australian hotels and tourism businesses:

  • Australia was once again the top destination on Chinese tourists’ wishlists, with 15% of the 3,000 Chinese travelers surveyed saying that Australia was the country they most wanted to visit over the next 12 months
  • Australia was also the top rated destination for sight-seeing, backpacking and adventure, and was the second most popular destination for resort / beach holidays and local culture exploration
  • Australia ticks almost all every box for Chinese travelers looking for in a holiday destination, from sight-seeing and adventure to shopping and gastronomy
  • Overall, Chinese tourists considered Australia the 4th most welcoming destination, behind Japan, South Korea and Hong Kong

Importantly, despite China’s (relative) economic slowdown, 92% of respondents indicated they were planning to increase or maintain spending on travel in the next 12 months. This reflects the growing feeling among Chinese consumers that international travel is “an essential part of life“.

The report also noted that independent Chinese travellers now outnumber group package tourists: 49% of respondents said they had travelled independently in the previous 12 months while 40% that said they had travelled with a group. This is great news for Australian hotels that previously may not have been receiving Chinese guests, because independent tourists are much more likely to look beyond the hotels that package tourists book.

At this point, it is worth returning to Tourism Research Australia’s latest forecasts, which predict that Chinese visitor arrivals will take-off over the next decade.

chinese-visitor-arrivals

Australia is currently receiving about 1.2 million Chinese tourists a year, which is pretty impressive. But look at how many Chinese tourists are expected to come to Australia in the 2024-25 financial year – almost 3.2 million! That’s crazy! But let’s put it in context – in the 2014-2015 financial year, 13 out of every 100 international visitors to Australia were Chinese. That’s a fair amount, only New Zealander visitors outnumbered them. However, by 2024-25, Chinese tourists will well and truly outnumber our Kiwi visitors, and not just by some small margin – as the diagram below shows. internationalvisitorstoaustralia2025

By 2024-25, more than 1 in 4 visitors to Australia will be Chinese. Be prepared to see a lot more Chinese tourists taking photos at the Opera House and visiting the Great Barrier Reef. But also, given that already 46% of Chinese visitors to Australia are repeat visitors (up from 37% in 2005), expect to see many more Chinese going beyond the usual tourist hotspots and visiting regional attractions. Sea Lake (about 400 kilometres from Melbourne) is just one destination that is benefiting from Chinese tourists who want to see more of Australia.

And are Chinese tourists big spenders? You bet they are! In fact, by 2024-25, expenditure by Chinese visitors is expected to be greater than our next 10 largest markets combined (United States, United Kingdom, New Zealand, India, Japan, South Korea, Singapore, Malaysia, Hong Kong and Germany).

But more importantly, will they want to stay in your hotel? Based on the latest surveys, the answer is an overwhelming yes. According to Hotels.com, 78% of Chinese tourists prefer to stay in hotels 3 stars or above. And the even better news is that 34% of Chinese tourists prefer to stay in independent hotels with a local flavour – slightly more than the number of Chinese that favour international chain hotels.

prefer-hotels-type

So, what’s the message from all this? All Australian hotels and accommodation providers, regardless of whether they are in a capital city or regional area, need to start getting their heads around China, because we are about to experience a boom like we’ve never seen before.

Of course, we shouldn’t put all our eggs in one basket – other markets will continue to be important and shouldn’t be ignored. However, I believe that any hotel that doesn’t at least attempt to improve their ability to welcome Chinese guests within the next couple of years will be left behind by their competitors within a decade. And doing so doesn’t even have to be expensive or difficult.

That’s not to say that results will be immediate. To borrow (and murder) the Pantene phrase, getting more Chinese guests into your hotel won’t happen overnight, but if you start getting China-ready now it will happen. Doing so will require improvements to both your online channels, and some offline changes to better cater to your Chinese clientele. Last week we wrote about the offline improvements hotels need to make, and next week we’ll look into how you can improve your online presence.

Are you ready to start developing your China capabilities, both online and offline? Contact China Ready Now today for a free consultation on how we can help you.

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