‘Unique’ Chinese FIT travellers need more focus
3rd May 2017
The emergence of the Chinese FIT (free independent traveller) – typically young professionals, who are educated and affluent – is driving growth to more adventurous, off-the-beaten track destinations.
Insight from travel retail analyst, research and category expert, Counter Intelligence Retail, powered by CiR Business Lounge, reveals that more than 65m Chinese PAX departed on scheduled international flights in 2016, up +16% on 2015, but many of them are opting for new destinations, driven by various social and geopolitical factors and offer duty free and travel retailers in these locations new opportunities.
Garry Stasiulevicuis, President, CiR says: “The new breed of Chinese tourist – often with a few trips abroad already under their belt – is demanding unique, authentic experiences from their holiday. Locations which offer one-off experiences not typically featured on group itineraries, are in favour, not least so that these travellers can show off doing something quirky and different on social media.”
Group tours are less popular
Duty free retailers relying on group tours, once synonymous with the Chinese tourist, may lose out if their focus does not shift to the FIT opportunity fast enough, believes CiR.
Where at first the Chinese began to favour Korea (+16%) and Japan (+18%) over traditional PRC destinations such as Hong Kong (+3%), Macao (-3%) and Taiwan (-2%), last year, outbound Chinese travel has tilted appreciably in favour of destinations in South East Asia that offer unique experiences with their beaches, temples and culture.
“Thailand (+32%), Vietnam (+76%) and Indonesia (+34%) are all seeing high growth for these reasons, while the political fallout from the recent US defence missile system (THAAD) deployment in South Korea has deterred Chinese from travelling and shopping there, with big consequences for travel retailers,” says Stasiulevicuis. “Thailand, Vietnam and Indonesia offer the more adventurous FITs something on top of a shopping spree or gambling trip; they are genuine bucket-list destinations.”
International travel outstrips domestic
CiR PAX data points to very high ongoing demand for international travel. The often-overlooked Chinese domestic air traffic market accounts for over 90% of Chinese departures from China and it grew last year by +11%, but was easily surpassed by international departures, which grew +18%.
While departures to all world regions recorded strong double-digit growth in 2016, Asia Pacific saw the slowest rise, and the Americas and Middle East and Africa the highest. This further cements the idea that Chinese PAX are looking further afield.
“Europe also emerged as a leading destination, though terror attacks across markets such as France, Turkey and Germany, are leading to a surge in popularity of perceived ‘safer’ less traditional destinations such as Eastern Europe and Spain for example,” says Stasiulevicuis, as we reported earlier this year. “In 2016, for example, the Czech Republic (+717%) and Spain (+115%) saw huge increases in Chinese arrivals.”
He adds: “Affluent FITs are increasing in numbers and driving a need for more long-haul routes as is the general growth of wealthier middle classes who want greater choice, but at lower prices. This changing profile has triggered growth in ‘no-frills’ low-cost carriers, which are making international travel affordable.”
As a result, more connections from an increasing number of Chinese cities are being made to less traditional holiday destinations. CiR Business Lounge data show an additional 161 scheduled international routes departed Chinese airports in 2016, with 16 never-flown-to-before airport destinations worldwide [a new route is defined as a new airline offering flights on an airport pairing already offered by an existing airline, or a totally new airport pairing].
Of the 16 new airport destinations, eight were in Asia Pacific, two in the Americas, and three each in Europe and the Middle East & Africa, bringing the total number of airports worldwide with scheduled direct links to China to 198.
For further information, please contact: Garry@counterintelligenceretail.com
NB. PAX Source: CiR Business Lounge | Advanced Analytics Tool - Data based on Scheduled departing international passengers only. Data displayed for nationalities is based on residency through place of ticket purchase