Shutterstock photoBy Robyn Mak
(The author is a Reuters Breakingviews columnist.)
HONG KONG, Oct 9 (Reuters Breakingviews) - Wanderlust, not shopping, is propelling China's second tourism boom. Chinese travellers are eschewing shopping malls for beaches and other experiences, recent data show. Offshore luxury retailers could lose some custom. But as younger members of China's middle class take more trips abroad, there are bound to be more winners.
That figure still pales compared to those who vacation at home. But big shifts in behavior are becoming evident. For one, as younger tourists venture abroad for the first time, they are shopping less. During the recent week, for example, one fifth of Chinese travelers went to Thailand, reflective of a wider shift away from shopping-centric destinations. The priciest Golden Week holiday booked on Ctrip.com this year, for example, was a 600,000 yuan journey to "Game of Thrones" filming locations across Iceland.
Consultancy Oliver Wyman reckons that average spending per trip increased just 3.5 percent annually to 20,000 yuan($3,006) last year, with non-shopping expenditure now accounting for two thirds of the total. Shopping dropped 8 percentage points of total spending share since 2015. This is partly due to of the broader "reshoring" of luxury sales back to the People's Republic, where Louis Vuitton bags and other items often retail for far more than in Paris, London or Tokyo. But thanks to recent tax cuts and other incentives to boost domestic consumption, that gap has narrowed. At the same time the next wave of Chinese tourists are more likely to splurge on fine-dining and cultural experiences.
The windfall from more Chinese tourists abroad is huge and growing. Analysts at Bernstein estimate that while average spending per trip will grow in low single-digits, that still translates into $411 billion of additional spending by mainland visitors by 2025.
Domestic outfits like Ant Financial are already catering to shifting habits. Ant's Alipay mobile wallet, for instance, offers users abroad discounts and coupons for local services in addition to shops. Western hotels, airlines and bespoke travel agencies should benefit too. China's tourism 2.0 will create far more winners than losers.
CONTEXT NEWS
- The number of Chinese outbound tourists reached over 6 million during the country's eight-day national holiday from Oct. 1 to 8, according to a joint report from China'sTourism Academy and online travel site Ctrip.com, a slight uptick from the previous year.
- Chinese tourists travelled to 88 countries and regions, spending an average of 9,800 yuan($1,472), according to the report. The most popular destination was Thailand, which accounted for 20 percent of outbound tourists, followed by Japan and Singapore.
- Chinese travelers spent on average 20,327 yuan per trip in 2016, according to a survey from Oliver Wyman - an increase of 3.5 percent compared to the previous year. Shopping expenditures, as a proportion of total travel spend, decreased 8 percentage points to 33 percent.
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