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Chinese Travellers’ Lodging Preferences

November 23rd, 2017

Since 2012, China is the largest outbound travel market, with Chinese travellers now collectively spending more than Americans and Germans when travelling abroad. China is also set to increase its lead over other countries in the coming years. China shows strong growth and the largest actual increase in outbound spending between 2017 and 2030.

Strong preference for budget lodging among Chinese travellers

Chinese travellers are known for their limited spending on lodging, while using a large part of their budget on shopping. Domestic tourism accounts for 94% of hotel sales in China (hence providing a good insight into Chinese travellers’ preferences), and the hotels market in China clearly shows the preference among Chinese for budget lodging.

Of the countries that are expected to see the strongest increase in average spending by Chinese travellers, the United Arab Emirates, South Africa and Indonesia have a fundamentally different hotels market segmentation than China, with a focus on the higher end of lodging, offering more luxury and mid-market hotels. The United Arab Emirates and South Africa, in particular, offer few budget hotels. Hotel chains have opportunities to launch budget hotels in the United Arab Emirates and South Africa to cater to future Chinese travellers.

Hotel Price Segmentation by Outlet in Select Countries 2017

hotel price segmentation by outlet in select countries 2017

Source: Euromonitor International

The potential of short-term rentals

The strong rise of short-term rentals also provides opportunities for international platforms to extend their offering in countries where rising Chinese travel expenditure is expected. While trust is a major barrier for short-term rentals in China, especially younger Chinese travellers are becoming more open to the idea. Tujia.com leads the charge in China, with an offering that is slightly different from other popular platforms such as Airbnb and HomeAway. To adapt to local needs and preferences, Tujia provides a more personal service to customers, including a local team doing the check-in and check-out service. The properties on Tujia are managed by third party property managers as well as by Tujia itself, to ensure that the listed photos are authentic and that properties are up to standard for rental.

Countries including the United Arab Emirates and Indonesia are expected to lag behind in their growth of short-term rentals, and should therefore be a key target for short-term rental platforms looking to expand. Keeping in mind Chinese preferences, however, will be key to success.

About Euromonitor International’s Travel Forecast Model

The Travel Forecast Model is a new tool from Euromonitor International that uses econometric modelling techniques to understand the various factors driving changes in international travel across 210 countries. This allows us to assess the individual impact of each driver to overall travel growth, in a process we call “Growth Decomposition”.

Travel growth drivers include various push and pull factors such as income growth and purchasing power, as well as destination risk factors including terrorism and natural disasters. Growth decomposition and travel driver identification also makes regular forecast updates and hypothetical scenarios possible in the Travel Forecast Model. By measuring each driver’s impact on overall travel growth, we can then change forecasted travel flows growth as underlying travel driver forecasts change.

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Wouter Geerts

In his role as Senior Travel Analyst, Wouter Geerts has direct responsibility for the lodging research within Euromonitor’s Travel team, and manages high profile projects including the Global Trends Report in collaboration with the World Travel Market. Before joining Euromonitor, Wouter completed a PhD on sustainability in the hospitality industry at Royal Holloway, University of London. Wouter further holds a Bachelor in International Hospitality Management.

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