Capitalizing on Key Trends for the Lucrative Chinese & Asian Millennial Travel Segments
Chan Wee Teck, VP & MD, George P. Johnson (Singapore) and Kestrel Lee, Executive Creative Director, Greater China Digital and Integrated Marketing, George P. Johnson
Chan Wee Teck, VP & MD, George P. Johnson (Singapore)
In 2020, millennials will form 70 percent of the global workforce. 60 percent of this new middle class is found in Asia (United Nations ESCAP, 2013), who will account for around US$ $340 billion worth of projected international travel spend (The Travel Gold Rush 2020, Oxford Economics, Amadeus, 2010). So how does that impact the Chinese and Asian travel markets?
The Chinese Tourism Gold Rush
Around 220 million Chinese residents will travel overseas with an estimated travel spend of $450 billion in 2025, up from 120 million residents spending $250 billion in 2015, based on Goldman Sachs’ The Chinese Tourist Boom report (20 Nov 2015). This tourism boom is partly the result of an expected increase from 4 percent to 12 percent of the Chinese population holding a passport. This increase partly comes from travel ready Milliennials graduating from Chinese universities in the next 10 years i.e. 74 million.
A May 2016 report by Marriott International and the Hurun Report on China’s Generation aged 18 to 36 showed that many come from affluent house holds, which spend US$65,000 on tourism annually.
The Young, the Foot loose
This young millennial generation in China born after the 1980s has become a dominant force in the country’s consumer market. Boston Consulting Group has stated that they form a key factor in driving a 55 percent growth in China’s consumption spending over the next five years with their consumption growth around at 14 percent annually, twice that of the older generation.
These Chinese younger consumers are mostly college educated and highly sophisticated shoppers and travelers. They also love overse as brands and exotic experiences and often advocate for them either personally or online, and they form stronger emotional bonds with them. Because of them, the most popular and exotic location to shoot wedding photos for Chinese travelers in 2015 was at the South Pole.
Travel destinations that qualify as exotic brand experiences are key drivers for Millennials visiting South east Asia. Unlike the older leisure travel generation, millennial travellers are part of today’s experience economy.
Kestrel Lee, Executive Creative Director, Greater China Digital and Integrated Marketing, George P. JohnsonAccording to a 2014 Eventbrite Millennial report, 78 percent of USA’s millennials prefer to spend their money on an experience, such as a concert or festival, than on material goods. For them, there is more value in authentic experiences that can be shared easily with their friends over social networks. A good example of this preference is the award winning remote controlled tourist campaign by the Melbourne Tourism Board which allowed people interested in Melbourne to explore the city using a traveler whom they could control via social media.
This example re-invents how consumers get a ‘taste’ of destinations prior to making their reservations. Such socialized travel experiences and authentic user content creation can create desire for destination preferences. This can be easily be leveraged by e-commerce platforms for travel bookings. Not all Asian Millennials are the Same
Asian Millennials share certain values and social behavior but are vastly divided in many of their travel preferences. With a taste for exotic premium experiences and luxury shopping, Chinese travelers lead the world in overse as travel expenditure with USD$165 billion, based on the
Market Research Report on Chinese Outbound Tourist (City) Consumption (2014-2015) by World Tourism Cities Federation/IPSOS.
However, Indonesians are partial to budget airlines and accommodation and opportunistic bargain hunters for short last minute getaways. Indian travelers have high travel spend but spend more on flights and food, with much less on accommodations. Singaporeans are constantly evaluating deals, as they want to get the most out of their travel budget.
Digital and Mobile Natives
In conclusion, Asian Millennials are now creating a new frontier of digital-driven travel experiences and preferences that open up a world of opportunities for brands and marketers to tap on.
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