Outbound travel from China is a topic I find deeply fascinating. Living in North America, my exposure to what’s actually happening on the ground across the pond is limited. That’s why it’s nice to have friends in higher places, specifically Ernie Diaz, the director of online strategies at Web Presence in China, to discuss some of the latest trends. We collaborated on a previous article, which gave more of an overview of how the Web has come to influence consumer behavior and travel decisions within the nation’s borders.

This time around, I was curious about the reports coming from Europe reflecting year-over-year traffic stagnation to major tourist hubs on the continent as well as declining retail figures from Chinese visitors for the first half of 2013. There’s plenty of analyses already written on this anomaly. It would appear that as China expands and evolves so too do the demands and desires of its vacationers.

Seeing as how Chinese outbound travel is neck and neck with the United States and projected to surpass it soon enough (if not already), having a deeper understanding of the specific intricacies of this influential cohort can make a tremendous impact on your business, whether you operate in a metropolitan tourist haven or a resort destination off the beaten path. Luckily I have Ernie in my corner to help enlighten us on some more details surrounding China’s travel evolution.

Mogelonsky: What behavioral differences are there between first-time travelers to European cities as opposed to return visitors?

Diaz: “The first-time Chinese traveler to Europe who’s not part of a tour group (a thankfully ever-growing demographic) has the mentality of seeing as much as possible during the trip, and of bringing back as many (non-value-added-tax) luxury brand items as possible.

“But a European vacation is nothing if not enlightening on the ways a tourist budget can be spent with savoir faire. The Chinese tourist is as likely as anyone else to note the charming little boutique hotel in Verona’s old-city district and rue the fact that he or she is lodged in the Best Western over by the train station.

“All travelers except the chronic backpacker learn that it is far better to take your time and enjoy one or two destinations over the course of a holiday than to rush through half a dozen. The international travelers from prospering Asian nations are no exception.”

Mogelonsky: What sorts of activities are most preferred aside from shopping?

Diaz: “Extreme anything is still very much a strange method of relaxation for most Chinese tourists. So while they throng the beaches of Boracay (Philippines) during Chinese holidays, you’ll be hard-pressed to see one among the many kite-boarders or even boogie-boarders.

“Experiencing nature is high on the list of prized activities, but even Scott Lupien’s Chinesehunting safaris provide noodles and comfy beds along with the adventure. The point is, you’ll get a lot more Chinese tourist sign-ups with a nature hike or flower-picking expedition, and a large dinner waiting back at the lodge, than with a rock-climbing or rugged camping excursion.

“To bring it back to European cities: two-hour walking or bicycle tours with café lunches included are a yes; standing in the sun half a day to watch the Tour de France cyclists pedal by is definitely a no. This is, of course, speaking in generalizations, and the situation may swing the other way in the coming years.”

Mogelonsky: Does the decline in shopping expenses relative to last year have anything to do with the supposed “cash crunch” or any other economic readjustments happening internally in China?

Diaz: “Without getting into a no-win debate about global economics, one of China’s chief modus operandi is to transition from an export-based economy to a consumer-led one, just as Japan did in the ‘70s. This explains why you can read gloom-and-doom reports of China’s slowing (gross domestic product) in one section of a newspaper and reports of its ecommerce growing by 181% for 2012 in another section.

“This ecommerce growth has much to do with why Chinese luxury shopping during holidays isn’t quite the revenue bonanza for Paris and London that it used to be. Consider the ‘daigou’, a Mandarin term for professional procurers who do nothing but fly to the Hong Kong or Singapore airports, buy suitcases full of duty-free DKNY bags and MaxFactor makeup, then sell it on Taobao for a 5% mark-up, but still a 20% discount from buying on mainland China.

“Then consider that Louis Vuitton bags don’t have nearly the cache among hip Chinese shoppers they used to. I mean, every rural county official’s wife has one by now. When everyone owns a product, it loses part of its mystique. The Chinese shopper is becoming a true global shopper. You can’t just expect them to all dance endlessly to the same mega-brand tune.”

Mogelonsky: Any other “maturation” trends affecting the mentality of global Chinese travelers?

Diaz: “First, golf and gambling. Super Aussie investor James Packer is going all-in with his casino company, despite the beating he’s taken in Macau, by investing heavily to lure Chinese high rollers to Perth (Australia) and Sydney. It’s a move that golf- and gambling-themed resort owners on the other side of the globe (and not just in Las Vegas) would do very well to consider.

“Next come themed holidays, especially for newlyweds. Yes, candlelight dinners should play into the offering, but most important is a unique setting for wedding photography. There’s a university in South Korea where the kids can’t even play Frisbee on the quad, it’s so beset with Chinese couples taking wedding shots. Provence is even more colorful now, with Chinese tourists scrapping in the lavender fields for first picture rights. The key here: Don’t underestimate the appeal a good wedding-photo theme can have on prospective Chinese tourists. They’re not picky about the timing either—engagement photos or wedding photos. As long as the results can be curated and hung up on the wall back at home, things are hunky dory.

“In terms of far-reaching trends, the simplest way I can phrase my conviction is digital convergence. The Internet now leaves you zero degrees of separation from your Chinese target market. The only issues are of language localization. You can be up and advertising with native content on free Chinese platforms in less time than it would take to plan and participate at the Guangzhou Hospitality Expo. Nonetheless, the tiny ratio of quality information on western tourism experiences relative to the burgeoning demand is shocking. More and more, the Chinese traveler will be looking for meaning, a way to recreate themselves through recreation, rather than just crossing destinations off their list.”

Mogelonsky: What sorts of promotions, packages or day excursions can hoteliers offer to incentivize Chinese travelers to stay with them?

Diaz: “A huge trend in China for the last few years, spread widely across all service industries, is the ‘All-You-Can’ upsell. Pay a big premium and get all the personal training you want at the gym for a year; or a room at the KTV parlor anytime with free fruit platters; or attend all the English classes offered in-house.

“The gym example is the best because the service provider knows that the service is never going to be utilized to the extent it could be. For customers, it’s just nice to have the option. In a society where your range of options is generally narrow and constricted, the ‘unlimited’ alternative has enormous appeal. Along these lines, I can imagine a hospitality organization offering a Chinese tourist a ‘Lifetime Honored Guest’ deal wherein the room gets automatically upgraded or a second traveler gets a bed and breakfast free.

“Aside from a humble digital marketer’s conjecture, though, there is a well-defined new trend in hotel dining: organic and in-room. Private rooms at restaurants are a mainstay in China, and room service done right is a booming segment of the Asian luxury hotel revenue stream. We’re talking about a 10-course menu at 4 a.m. at the high end though, so this kind of service shouldn’t be considered lightly.”

Mogelonsky: How would this “All-You-Can” upsell work in a resort capacity?

Diaz: “In a resort capacity, packaging many activities with a price break is a traditional sales promotion that will give you plenty of mileage with Chinese patrons, even at the high end of the customer spectrum. Build free breakfasts into basic pricing and complimentary bottles of wine into set dinners. Complimentary welcome spa visits and meals are already a growing trend in southeast Asian destinations (such as Thailand) that are getting more and more Chinese visitors.

“The Rising Sun Residence in Phuket (Thailand), for example, has gone from popular to booked-solid thanks to its growing word-of-mouth (reputation) online in China. That rep has been spurred largely by the aforementioned free meal and spa treatment, as well as the personal driver on call from 8 a.m. to 10 p.m. Their price point is just under that of 5-star luxury, and the property is miles from the beach with no infinity pools or award-winning chefs. But all the freebies built into the cost make it irresistible to Chinese tourists who like to think they’re getting a lot of value and unique experiences for the money.”

Mogelonsky: To cap off, does staying ahead really boil down to offering personalized service catered toward Chinese guests?

Diaz: “First off, I would modify the phrase to ‘localized service,’ rather than ‘personalized service.’ If you have Mandarin on your menu, Mandarin brochures and a staffer with a smattering of Mandarin, you’re well on your way. Otherwise, with no localized systems in place, Chinese guests will perforce have to settle with your ‘personalized service’ offerings, but they better be great if you’d like them to come back.”

(Article published by Larry Mogelonsky on Hotel News Now on November 12, 2013)