China’s Golden Week and the gold leaf rush

With the autumn travel season now well underway, we consider where and how travellers are choosing to spend their money in two Asian markets

The jury remains out on whether China’s Golden Week, which officially ends today, will have proved as lucrative as previous years for the travel industry set.

Over the past few years, the number of Chinese travellers has risen steadily, benefiting hoteliers, airlines, online travel agents and retailers across the globe. Since the first National Day to commemorate founding of the People’s Republic of China in 1999, the numbers of Chinese travelling during this key week for tourism has continued to rise by about 13% each year. Back then 28 million people hit the road on or around October 1st, rising to 120 million in 2007 and last year reaching an estimated 480 million.

So will this upward trajectory continue this year?

One thing in the tourism industry’s favour is that this year’s Golden Week coincides with the country’s mid-Autumn festival. So those able to swing an extra three days of leave could be away for 12. Yet there has also been a falling Yuan, heightened stock market volatility and less access to credit prompting fears that people will travel less this year.

In spite of this, it’s not all bad news and although all the data is not yet out, early indications are that travel companies offering trips in or near China will have seen the biggest uptick during this Golden Week. According to the China Outbound Tourism Research Institute, outbound travel has remained relatively strong but the most popular destinations – Hong Kong, Tokyo and Bangkok - have been closer to home.

In the South China Morning PostCtrip confirms these three cities as top of its most pops but says long-distance travel has performed strongly too, with trips to London and Paris tripling compared to last year’s figures. Big-ticket trips like this tend to be planned as much as six months in advance and are unlikely to be cancelled. However, with less money in their pockets, Chinese travellers are more likely to be window-shopping than splashing out on London’s luxury Bond Street strip!

It’s this that will have the biggest impact on cities like London and Paris. According to VisitBritain, 185,000 Chinese tourists came to the UK in 2014 spending around £2,688 a visit. And on Bond Street, Chinese money accounted for 23% of spend during the year, but Richard de Meo, corporate foreign exchange broker Foenix Partners’ MD Foenix Partners says against a “bleak economic back drop, London’s luxury retailer can expect lower sales.

Being well prepared

What we don’t know yet is whether Chinese last-minute travel during Golden Week has performed quite as well as it did last year. Looking back at past data can be an indication and Thomas Helldorff, VP of Global Travel at Worldpay, argues that the firms that prepared themselves to make the most of this year’s holiday will have seen a “short but significant jump in sales”.

Worldpay data from 2013/14 shows that:

  • Transaction volumes surge by over 120% in China in the two weeks leading-up to Golden Week in 2014, compared with sales the previous year.
  • Average transaction values in 2014 were 7% higher than average the week before Golden Week
  • Airlines saw last minute sales take off in China ahead of Golden Week in 2014, with transaction volumes rising more than 30% compared with 2013 in the two weeks leading up to the holiday
  • The value of an average transaction over the same period actually dropped 21%, an indication that online players have started competing more aggressively on price

Given the pressure on purse strings, this trend is likely to continue in 2015. Furthermore, any surges in last-minute travel will almost certainly have been closer to home.

More bang for the buck

Elsewhere in Asia, Singaporeans, whose currency is holding up well in certain markets are assessing their autumn travel options and looking to venture further afield, according to data from Hotels.com.

In Japan and Russia, with its so-called ‘Golden Autumn’, there is more ‘bang’ for the Singaporean buck and here searches have risen by 120% and 68%, respectively.

Although the Singapore dollar has remained flat against the Euro, another destination that has piqued the interest of Singaporeans is Germany, another top destination for autumn colour, where hotel searches have risen 89% year on year.

Unsurprisingly, hotels.com is using its data to target consumers with appropriate and relevant offers in those cities.

Join us in Hong Kong for Smart Traveller – Digital Strategies Asia (Jan 26-27) or later in the year in Singapore for EyeforTravel’s APAC Summit

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