China’s 109m outbound tourists spent a whopping $229bn last year on retail during their travels, focused most on South Korea and Thailand, which both overtook Hong Kong as the top destinations. And among this outbound mix, Millennials are the ones to watch.

Europe, meanwhile, was again ahead of North America as the most popular destination outside of Asia – largely a reflection of the weak euro and the strong dollar in 2015, which has influenced travel patterns.

The figures come from market analyst GfK which describes both the spending and travel numbers as “a key milestone in China’s outbound tourism history”.

MILLENNIALS A NEW FOCUS… HONG KONG SLIDES

However, as TRBusiness has also noted before, the analyst points to a Chinese shopper that is changing quickly in terms of spending habits and demographics. The company says: “There have been profound changes in the behaviour of the typical Chinese traveller, with Chinese Millennials firmly established as the core drivers of China’s outbound tourism spending.”

New destinations are also driving travel. Up until 2013, Hong Kong was the preferred destination for China’s outbound tourists, driven by its cultural similarity, lower travel costs and accessibility via short-distance travel. But demand is shifting and Hong Kong is losing out now… and is forecast to lose out in the future according to Credit Lyonnais Securities Asia.

GfK adds: “Hong Kong offered a shopping paradise, and that was a strong motivating factor for Chinese tourist at that time. But since 2014, increasing numbers of China’s outbound tourists have been opting for other destinations that offer historical and cultural experiences, as well as shopping.”

TOP FIVE DESTINATIONS

By the start of November 2015, the top five favourite destinations for Chinese travellers (counting air and overnight visits) were South Korea (a rise of +112% since 2011), Thailand (+263%), Hong Kong (+37%), Japan (+157%) and Taiwan (+54%).

Europe remains the most popular destination for Chinese travelling outside of Asia, showing an increase of +97% in the number of air and overnight visits in the last four years. This is followed by North America (+151%) and the Middle East (+177%). Africa remains the destination least visited by Chinese tourists – but with signs that this could be changing, as visits have risen by +306% since 2011.

However, these four-year figures mask the currency volatility and terrorism attacks of 2015 which have played their part in determining Chinese travel patterns to all these regions – and North Africa in particular.

Laurens van den Oever, Global Head of Travel & Hospitality Research at GfK, comments: “China’s outbound tourists remain strategic to Hong Kong and its businesses – but other destinations are jumping ahead in winning their favour. Destinations such as Hong Kong need to re-evaluate China’s new breed of young and independently-minded travellers, to understand how best to attract them and capitalise on the growth of China’s outbound tourism.”

A NEW DEMOGRAPHIC

According to the GfK data, half (50%) of China’s outbound travellers are aged 15-29 years old – the so-called millennials, while over a third (37%) are aged 30-44 and 10% are 45-59.

“The sheer size of the millennial group within China’s travellers makes this a commercially attractive target audience for those destinations who are looking to draw in Chinese tourists,” says GfK. “This attraction is increased by the fact that two thirds (66%) of Chinese Millennials belong to the high income bracket.”

Their financial standing is also expected to increase as their careers advance, since seven out of ten Millennials hold ‘white collar’ executive or professional jobs. Understanding the desires that motivate this major section of China’s outbound travellers is therefore paramount.

[See the February issue of TRBusiness for an in-depth analysis of the Chinese Millennials market.]