China’s Middle Class

When I travel in Asia, Chinese tourists are omnipotent. In large, they’ve stayed relatively close to home. But, that’s changing extremely fast.

Next year, 150 million Chinese will travel abroad. Their spending power is so great that service providers across the value chain — countries, airlines, hotels, retailers — are creating “Chinese-centric” innovations and services.

The US embassy is eliminating visa “friction” by allowing visa applicants to pick up approved visas from one of 900 bank branches in China. Picking up visas is one of the biggest pains in the end-to-end travel experience. Subsequent to the new distribution, travel to the US increased by 45% (though I’d like to see the correlation). Countries that waive visas (eg Maldives) have even higher visit growth rates.

When abroad, the Chinese prefer to speak, eat, and live in rooms natively. In hotels, Chinese congee buffets complement western breakfasts (of the hotels I’ve stayed outside the Far East the Grand Hyatt Mumbai has had the largest), slippers are by the door, tea pots instead replace coffee pots, tai chi lessons and shoulder massages, lots of Mandarin translations and directions to luxury shopping destinations, and UnionPay for payments.

Accor has even re-branded the Mercure Hotels as MeiJui in China. I expect the brand will follow the travelers internationally.

More creatively, tourism boards are catering to the Chinese through film. In the 80s and 90s countries, especially Switzerland and UK, incentivized Bollywood producers to film in their respective countries. The destinations became a fantasy, and top 5 destination for first-time international travelers. Tourism boards are following the same formula with the Chinese. Thailand and Mauritius have capitalized.

The Economist details rise of Chinese tourism, and James McGregor’s book,One Billion Customers: Lessons from the Front Lines of Doing Business in China, demystifies some of the cultural and business practices of Chinese society.

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