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As China's Gen Z Demand "Social Travel", Brick & Mortar Agencies Boom

Data and insights on the newest emergent trends in China's travel market.



China Tourism Academy Projects 264 Million Trips, $107 Billion Value

The China Tourism Academy (CTA) recently released their 2024 forecast report which, based on positive policy shifts as well as demand- and supply-side momentum, puts forth a positive outlook for the tourism economy in 2024. CTA estimates that domestic tourist trips and domestic tourism revenue will exceed 6 billion person-times and 6 trillion yuan respectively, while inbound and outbound tourism figures and international tourism revenue will respectively surpass 264 million person-times and 107 billion US dollars.

China and Thailand to Permanently Mutually Exempt Citizens' Visas from March

Thai Prime Minister Seta Thaweesin announced on January 2nd that China and Thailand will permanently exempt each other's citizens from visas, starting in March.


Thailand welcomed as many as 12 million Chinese visitors before the pandemic

 

Over 110,000 People from Six Countries Granted Visa-Free Entry to China

Since December 1st, China has implemented a unilateral visa-free policy for ordinary passport holders from six countries, including France, Germany, Italy, the Netherlands, Spain, and Malaysia. As of December 31st, 2023, according to statistics from the National Immigration Administration, the total number of visitors from these six countries to China was 214,000, showing an increase of 28.5% compared to November. Among these visitors, 118,000 entered China visa-free with ordinary passports, accounting for 55.1% of the total number of entries from the six countries during the same period. Among the visa-free visitors, 91,000 came to China for sightseeing and leisure, as well as for engaging in business activities, accounting for 77.3%.

Chinese Civil Aviation Target for 2024: Restoring International Flights to 80% of Pre-Pandemic Levels

According to the Civil Aviation Administration of China, in 2023, international passenger flights recovered from less than 500 flights per week at the beginning of the year to over 4,600 flights, an increase of 9.6 times, with the number of resumed countries reaching 89.2% of pre-pandemic levels. Passenger traffic between China and Europe has recovered to over 60% of pre-pandemic levels, and regular direct flights between China and the United States have increased to 63 flights per week. The recovery level between China and countries participating in the 'Belt and Road Initiative' is 6.2 percentage points higher than the overall recovery level of international routes. In 2024, domestic passenger transport in China is projected to continue to grow steadily, with an estimated annual passenger transport volume on domestic routes reaching 630 million person-times, exceeding pre-pandemic levels. On international routes, the aim is to restore flights to around 80% of pre-pandemic levels.

Younger Chinese travelers are driving considerable innovation in the post-pandemic travel market

Industry Insights

"Where they go is not important; who they travel with is the key": Decoding Chinese Gen Z Travel Trends & Spend

China's younger traveler segments, especially Gen Z, are beginning to make their mark in the travel market, with new and unique preferences and spending patterns. According to the "2023 Youth Revenge Travel Report" produced by 36Kr's Next Generation Research Institute, Gen Z's travel consumption budgets have reached as high as 14,774.3 yuan (US$2,080). Among Gen Z travelers surveyed, 16.6% were even reported having zero savings - or being in debt.

 

Qingtianxing, a travel agent specialising in travel experiences targeted at 164 universities and 1.2 million college students in Beijing. Founder Hong Zhenqi shares: "the key is securing good experiences. It's not about quantity but quality. With sufficiently low costs, there's no shortage of channels. Identifying good projects is crucial. For college students, they have only one demand: wherever is popular (on social media), they go. There must be a crowd. If it's going to make a splash on their social media, they're content."

This highly social-media-centric segment of the travel market has seen travel influencer incubators rise in importance, which travel agent Tuboshu has invested into heavily. According to CEO Tao Rui, "Currently, we focus on the cultural and tourism industry, developing influencers. We have incubated travel bloggers on platforms like Douyin and Xiaohongshu (Little Red Book). Normally, it takes just a month for us to establish a Level 6 or Level 7 (10,000-100,000 followers) influencer for selling. Our clients are mostly 20-35 years old. The time when clients place orders correlates with our live streaming time, and peak ordering times occur during commute hours from Monday to Friday mornings. We call it "commuting traffic". We also see peak periods on Saturday and Sunday afternoons." Tao Rui is now steering Tuboshu into cultural and creative products. "When a place becomes popular, its cultural and creative products are high-margin, and unlike tickets and travel products, cultural and creative products don't expire or face supply shortages. Recently, we sold out a 68-yuan (≈US$10) fridge magnet of Shichahai Lake in Beijing, with daily sales exceeding 3,500."

The pandemic was truly transformative for younger Chinese travelers and their preferences. Zhai Qi, director for the Northern China region at leading Chinese travel agency Mafengwo, describes their evolution over the last several years: "Before the pandemic, Mafengwo's outbound business accounted for a higher proportion than domestic business. However, during the pandemic, user travel was restricted, and our new challenge became creating the most sticky content and gamification to connect to users. During the pandemic, we innovated a lot, with new initiative creating new marketing hooks for local destinations." These initiatives include cliffside coffee at Guizhou's Libo and mineral water drifting at Changbai Mountain, where social gamification began to play an increasingly important role. "40% of these experiences integrated travel and culture with social gamification, which shows us that young people today may pay more attention to the social side of destinations. Therefore, attracting user attention through new methods and strengthening user interaction through content communities are key strategies for the post-pandemic platform," said Zhai Qi.


The pandemic era's effective ban on outbound travel favoured domestic destinations, such as Changbai Mountain

This increasing need for social and psychological engagement has given Enjoy Dream Travel, who serve 280,000 young Chinese travelers annually, a chance to innovate. "We don't follow traditional travel routes; instead, we upgrade traditional travel routes into a packaged experience. Currently, there's an issue in the market with the customer base for traditional routes. The same destination products are available on various platforms, so to enhance customer loyalty, increase repurchase rates, and generate more referrals, we have upgraded the traditional travel projects by embedding emotional value and social attributes throughout the entire journey because for young people, where they go is not important; who they travel with is the key," says Beijing manager Dou Dou. "For us, the key to sales conversion is capturing the psychological aspect, evoking empathy, and there needs to be a high degree of resonance between the customer and us. So in Enjoy Dream Travel tours, the age gap among customers is very small, creating more emotional resonance. This experience is different from other travel groups," she said.

"Places for brands and customers to engage": Ctrip's New Brick-and-Mortar Store Boom

 

2023 saw strong tourism industry recovery in China, and brick-and-mortar agencies once more welcomed bustling crowds. From January 1st to November 12th 2023, when Ctrip opened its first storefront in Jilin Province, Ctrip hit the 2,100 signed storefronts mark, breaking a Ctrip record for the number of newly signed stores in a year. Ctrip's storefronts have now hit a total of 6,500, reaching cities like Changchun and Zhangye, which it had not reached before the pandemic. Ctrip's brick-and-mortar store boom reached its peak on April 18, with 200 stores opening simultaneously in a day across China, marking a milestone for the rapid recovery of the industry.


Ctrip's Changchun store opening in Jilin Province

Data from Ctrip shows that in 2023, average per capita spending on domestic travel products in stores was 1,426 yuan, an increase of nearly 40% compared to 2019; per capita spending on overseas products was 5,269 yuan, a 16% increase from 2019. It's worth mentioning that unlike in previous years where stores mostly sold traditional group tour products, this year, high-quality and flexible private tours and custom-made tours have been more favoured by consumers. Ctrip's data shows that the proportion of custom-made tour product orders through stores increased by 92% compared to the same period last year. Foshan Ctrip Platinum store manager Yuejiao Zhao reports an increase in young customers, and more than 40% of the business in her store came from the sale of custom-made tours. Zhao was able to quickly recapture market share as the travel industry rebounded, taking special care to understand customer needs, interact face-to-face, and to customise travel experiences according to this understanding. With this approach, she was able to make up for the losses of the past three years with the profits of just six months.


Another newly-opened Ctrip storefront in Zhuzhou, Hunan

Statistics show that in 2023, the provinces with the most newly opened Ctrip stores were Anhui, Guangdong, Sichuan, Henan, Yunnan, Guizhou, Hunan, Shaanxi, Jiangsu, and Hebei. The best-selling domestic travel stores were distributed in Shanghai, Chongqing, Beijing, Chengdu, Guangzhou, Nanjing, Xi'an, Hefei, Foshan, and Wuhan. A trend has emerged of travel agency storefronts continuously expanding into lower-tier-city markets, as residents of numerous third, fourth, and fifth-tier cities and county-level cities have shown their ability and willingness to travel. In 2023, Ctrip even opened 473 new travel stores in county-level towns, achieving a 23% penetration rate among small-town market segments. Zhang Li, CEO of Ctrip's Travel Channel Business Unit, is optimistic about the "new era" in brick-and-mortar travel agencies; "Storefronts are undoubtedly the best location to carry out innovation in consumer experiences and new products," he said. "Ctrip's storefronts are not just places where customers place travel orders; I hope they will also become places for brands and customers to engage in daily communication, discussion, and interaction."


Content provided by China Travel Trade Media.

Curated and translated by Create Consulting. 


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