Throughout my experience in hospitality and tourism marketing, I’ve learned many things – particularly that cookie-cutter marketing across global demographics doesn’t yield the results we marketers seek. Consider the U.S and China – two international markets with a powerful share of high-net-worth consumers that we luxury professionals endeavor to attract. There are clear-cut differences between U.S. and China’s wealthy citizens so it would be a misstep to market to them as if these diversities didn’t exist.
The latest issue of the Hurun Report’s “2014 The Chinese Luxury Traveler” presented some key insights on the vital China market, and when the information is compared against what we know about the U.S. affluent, some enlightening distinctions emerge – distinctions that global marketers should recognize and embrace when it comes to smart strategizing.
TOURISM’S POPULARITY CONTINUES
According to the Hurun Report, which was produced in cooperation with the International Luxury Travel Market (ILTM) to analyze the travel habits and consumption patterns of China’s high-net-worth individuals (HNWI), “Tourism remains supreme as the number one leisure pursuit for China’s wealthy.” This sentiment resonates with the U.S. affluent as evidenced by my many conversations with well-established U.S. luxury travel advisors. But, while the affluent in both countries share a passion for travel, there are differences in where these consumers want to visit.
WHERE AROUND THE GLOBE DO THEY GO?
Australia is the preferred international tourism destination for China’s HNWI segment, notes the Hurun analysis, jumping from seventh place last year to the top spot for 2014. For these outbound travelers, European countries have declined in popularity (France was their top spot for 2013).
Although Australia remains on U.S. affluents’ bucket lists, this doesn’t translate into an impressive conversion rate of bookings, largely due to the full-day of travel to the country. Instead, Italy and France remain exceedingly popular for the U.S.; interest in Eastern Europe, particularly Croatia and Montenegro, continues to grow; and there is a renewed intrigue in Japan.
In terms of cruising, the Caribbean ranks highest for the Chinese while for the U.S. the desire is to navigate the waters of the Baltic Sea and the Mediterranean. And, for many U.S. high-net-worth consumers, the appeal of European river cruises continues to grow.
THE IMPACT ON SPEND
One of the most significant differences between the two countries relates to the affluent travelers’ spend in a destination. The U.S. luxury traveler tends to spend more money at the hotel – on the room, food and beverage, and ancillary fees around the property – and in purchasing local, authentically crafted items while the Chinese affluent spend more on branded goods (think Louis Vuitton and Hermes) and shopping.
DIFFERENCES AMONG ADVISORS
The methods of booking travel in the two countries are quite dissimilar. In the U.S., the affluent seek out luxury travel advisors to curate unique, unrivaled travel experience. These advisors are an indispensable resource thanks to their experience, expertise and knowledge base, which is why high-net-worth consumers still desire their assistance for long-haul travel with multiple sectors. In China, there is more of a concierge approach in that often a trusted financial advisor is sought after for advice on travel.
Source: Peter J. Bates, President