This post was originally published on WeGoEU, a company that connects European businesses with Chinese travellers through WeChat Mini Programs.
Although the situation facing Europe’s approaching tourist season remains grim in light of the coronavirus pandemic, a recovery will, eventually, happen.
When it does, however, some market segments will mobilize faster than others. Chinese group travel may have been a dominant element of Europe’s travel market over the past 20 years, but the Free Independent Traveler (FIT) segment will recover faster. Going forward, it promises to become the guiding force as China’s traveler becomes younger, digitally-reliant, and more internationally minded.
This article explores the differences between group and FIT travel, the forces driving this trend shift, and how those in the European travel sector might think about attracting a new generation of Chinese tourists.
Group Travel Segment Demographics and Drivers
Group tourism was driven by the explosive growth of China’s economy which created a generation of newly wealthy citizens who were eager to travel internationally yet lacked linguistic or cultural confidence. Following two decades of enormous growth, this segment has begun slowing in recent years as its core demographic ages and adopts new habits. Having visited well-known tourist sites, searching out unique experiences became more popular, a trend reflect in European group travel moving towards smaller and more customized tours.
FIT Segment Demographics and Drivers
FIT travel is being driven by those born after 1978/79, i.e. following the opening up of China’s economy. As part of the ‘one child’ generation, many had their entire family’s resources dedicated to their educations and have grown up with economic and social opportunities beyond the imaginations of the previous generation. This group boasts significant disposable income and is seeking out independent travel experiences aided by their language skills and the connectivity of smartphones.
Why FIT Travel Will likely Recover Faster than Group Travel
Reason 1: Ban on Group Travel but not Independent Travel
In late January, the Chinese government placed a ban on outbound group travel. Although independent travel is significantly slowed by this decision as well as the measures of other countries such as closing borders and banning flights. However, the fact it hasn’t been formally stopped means it won’t need to wait for official approval and will likely start to recover organically as the situation improves.
Reason 2: Easier to Book Individual Travel than Organise Group Tours
Even once the travel ban is lifted, it will take time for travel organisers to arrange the myriad logistics that go into group tours. By contrast, for individuals, the next international vacation is just a matter on taps on a smartphone away. According to CTA (Chinese Tourism Academy), 43 percent of Chinese FITs book trips with two weeks of planning. Furthermore, older generations, who make up the majority of the group travel segment, may be more cautious about traveling internationally post-coronavirus.
Reason 3: The Global Tourism Industry is Nurturing the Trend
Simply put, the tourism industry prefers FIT to group travel. Independent travellers typically stay longer and spend money at a wider array of locations, thereby spreading the benefits more broadly across the economy. Groups tend to spend at predefined locations and their appearance — and sudden disappearance – places great pressure on certain businesses, services, and infrastructure. As the FIT trend continues its rise post-coronavirus, the global tourism industry will need to increase the resources it devotes to this segment, thereby further accelerating its rise.
Independent Travel is an Unstoppable Force
In Australia, Chinese FIT grew from 44 percent in 2012 to 61 percent in 2017. While in H1 2019, 70 percent of Ctrip bookings to Europe were still for group tours, the coronavirus pandemic will likely catalyse further growth in the FIT segment. Being proactive in nurturing this valuable market will be crucial for the European tourist business in the years to come, particularly for businesses already seeing a decrease in group travel and businesses who want to attract more Chinese visitors once the recovery begins.
One Key Way to Focus on FIT
As the vast majority of Chinese people do not have social media accounts on Instagram or Facebook, use Google to search, or WhatsApp to chat, it’s imperative to have a presence on WeChat. With 1.1 billion monthly users in Q2 2019, WeChat is a true super app that provides the ability to do everything from booking hotels and checking into a flight to ordering a taxi and translating foreign languages into Mandarin.
Businesses can set up shop on WeChat either with an official account or through creating a Mini Program. The official account requires a hands-on approach suitable for larger businesses or those truly focused on the market. Mini Programs are oriented to products and services. They enable businesses to leverage features including e-commerce, task management, and coupon offers. Both methods are vibrant ways to share information, tell stories related to your destination, and promote products.
