ACCENTURE RESEARCH. TRAVEL FLASH RESEARCH CHINA INSIGHTS February, 2018
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1 ACCENTURE RESEARCH TRAVEL FLASH RESEARCH CHINA INSIGHTS February, 2018
2 SCOPE OF INSIGHTS The insights in this deck are based on Chinese travelers participating in three Research studies conducted in FY17 and FY18 which have focused on: AIRLINE RETAIL Study about behavior related to shopping behavior in airports and on flights during travel. CRUISE Study about attitudes toward cruising. PRIVATE ACCOMMODATION Study to better understand an emerging trend of private accommodation in the hospitality industry. Copyright 2018 Accenture. All rights reserved. Accenture 2
3 EXECUTIVE SUMMARY Chinese travelers have unique expectations and motivations regarding how they travel. First, they have significantly higher levels of participation in retail shopping both in airports and on-board flights. They are also particularly keen on offerings such as fly and collect which could pose a great opportunity for growth among Chinese travelers. Second, they seem to be far less price conscious than their travel counterparts in other parts of the world. Particularly as it relates to retail shopping and with the accommodations they choose while traveling. Though they do show concerns with costs when it comes to cruising as a vacation option. Finally, unlike travelers from other countries, Chinese travelers prefer more intimate accommodation when they travel such as staying at a bed and breakfast or with friends and family for both leisure and business travel. Copyright 2018 Accenture. All rights reserved. Accenture 3
4 INSIGHTS FOR CHINESE TRAVELERS RETAIL AIRLINE CRUISE PRIVATE ACCOMMODATION Chinese travelers make up a larger share of those interested in purchasing retail onboard flights and present a tremendous opportunity to grow the fly and collect service offering Chinese cruisers are more price conscious when it comes to cruise experiences than they are with retail shopping or with accommodations when they travel Prefer more intimate accommodations while traveling and are less price conscious regarding their selection of accommodations Copyright 2018 Accenture. All rights reserved. Accenture 4
5 AIRLINE RETAIL FINDINGS
6 CHINESE TRAVELERS OUTPACE OTHERS ON SHOPPING WHILE THEY TRAVEL UP 2 OVER PARTICIPATION COMPARED TO TRAVELERS STUDIED IN OTHER MARKETS When you fly, how often are you likely to purchase retail items (duty free or otherwise)? 2 67% 84% Chinese travelers are 2 more likely to purchase retail items when they fly 32% 41% 3 34% 27% 22% I have never purchased retail items when I fly % 32% 34% 11% 1 17% 11% 50% 10% 30% 21% 22% 27% 21% 30% I rarely purchase retail items when I fly I sometimes purchase retail items when I fly I almost always purchase retail items when I fly Overall Japan United Kingdom France United States Copyright 2018 Accenture. All rights reserved. Accenture 6
7 MILLENNIAL PARTICIPATION IN SHOPPING AMONG CHINESE TRAVELERS EXCEEDS THAT OF MILLENNIALS STUDIED IN OTHER MARKETS BY 20%; OLDER CHINESE SHOPPERS DRIVE PARTICIPATION EVEN HIGHER UP 3 OVER THE SAME AGE IN OTHER GEOS When you fly, how often are you likely to purchase retail items (duty free or otherwise)? 20% 3 67% v. 84% 74% v. 91% 68% v. 7 60% v. 81% 32% 34% 38% 42% 3 40% 2 23% I have never purchased retail items when I fly % Overall 50% 10% Only 3 11% 1 Overall % % 14% 18% Overall % % 1 Overall % 11% 7% 51+ I rarely purchase retail items when I fly I sometimes purchase retail items when I fly I almost always purchase retail items when I fly Copyright 2018 Accenture. All rights reserved. Accenture 7
8 MEDIUM TO HIGH INCOME FAMILIES ARE ALSO SIGNIFICANTLY MORE LIKELY TO SHOP WHEN THEY FLY CHINESE TRAVELERS AT THE SAME INCOME LEVELS ARE EVEN MORE When you LIKELY fly, how often TO SHOP are you likely WHEN to purchase THEY retail FLYitems (duty free or otherwise)? 24% 24% 32% 38% % 93% Medium income Chinese travelers are 3 more likely to purchase retail items when they fly 41% 3 I have never purchased retail items when I fly % 3 20% 38% 57% 43% 53% I rarely purchase retail items when I fly I sometimes purchase retail items when I fly 17% Overall 2 Low 20% Low 1 Medium 7% 0% Medium 10% 3% High High I almost always purchase retail items when I fly Copyright 2018 Accenture. All rights reserved. Accenture 8
9 MOST PURCHASE THEIR RETAIL ITEMS AT THE AIRPORT
10 THE SHARE OF AIRPORT VS ONBOARD PURCHASE IS MORE BALANCED AMONG CHINESE TRAVELERS WITH MORE THAN DOUBLE THE PARTICIPATION, COMPARED TO GLOBAL TRAVELERS, IN ON-BOARD PURCHASES... Regarding your retail purchases on average, are they typically completed at the airport or on-board your flight? At the airport Onboard my flight % 9 93% 90% 14% Overall 8% 7% 10% United States Japan France United Kingdom 3 1.5x Chinese travelers spend more onboard than those in other markets studied Copyright 2018 Accenture. All rights reserved. Accenture Base: Those that have ever purchased when they fly, 2070 respondents 10
11 AND THAT NUMBER RISES FROM 3 FOR CHINESE TRAVELERS OVERALL TO 62% AMONG CHINESE GEN Z ERS Regarding your retail purchases on average, are they typically completed at the airport or on-board your flight? At the airport 38% 4 Onboard my flight % 6 92% 91% 82% 14% Overall 3 Only 62% Gen Z 3.4x 13% 31% % % 51% Chinese Gen Z travelers spend over 3x as much on board than travelers overall Copyright 2018 Accenture. All rights reserved. Accenture 11
12 DIVERSE TRAVELER SEGMENTS HAVE DIFFERENT MOTIVATIONS
13 PRICE IS IMPORTANT OVERALL, BUT PRODUCT AND CATEGORY SELECTION ARE IMPORTANT TO CERTAIN SEGMENTS What would influence you to buy more retail products on-board your flight? Ranked #1 CHINA RESULTS CHEAPER PRICES BETTER PRODUCT SELECTION 7% 1 18% 1 DIFFERENT CATEGORIES OF PRODUCTS TO BUY 32% 2 among Millennials 24% among Airport purchasers 2 among Gen X PURCHASES FOR AN EXTENDED PERIOD BEFORE AND AFTER FLIGHT Chinese travelers may perceive the cost of onboard purchases less than the cost of airport purchases, which is driving their participation in on-board purchases at rates higher than their global counterparts Copyright 2018 Accenture. All rights reserved. Accenture 13
14 A NEW TOP MOTIVATOR EMERGES FOR CHINESE TRAVELERS THEY WOULD BUY MORE ONBOARD IF THEIR PURCHASES COULD EXTEND BEFORE OR AFTER THEIR FLIGHTS What would influence you to buy more retail products on-board your flight? Ranked # Cheaper prices 21% 14% Gen Z Better product selection 1 18% 31% Cheaper prices 3 14% Better product selection Cheaper prices 2 14% Better product selection 14% 1 03 Different categories of products to buy 8% 03 Different categories of products to buy 03 Different categories of products to buy 04 Purchases for an extended period before and after flight 04 Purchases for an extended period before and after flight 04 Purchases for an extended period before and after flight CHINA RESULTS Chinese travelers unlike travelers globally rate likelihood to purchase before or after their flight in their Top 3 Copyright 2018 Accenture. All rights reserved. Accenture 14
15 MORE THAN OTHER COUNTRIES CHINESE TRAVELERS ALSO PLACE HIGHER VALUE ON PAYMENT WITH LOYALTY POINTS What would influence you to buy more retail products on-board your flight? Cheaper prices OVERALL FRANCE UNITED KINGDOM 32% 50% 43% 60% 43% 6 UNITED STATES 31% 47% JAPAN 23% 41% 18% 3 Better product selection Different categories of products to buy 1 7% 17% 3 12% % % 14% 30 % 20% 21% Purchases for an extended period before and after flight 11% 4% 8% 2% 3% 18% 1 Payment with loyalty points 12% 4% 10% 4% 11% 1 3% 7% 18% Delivery/Pick up of purchase at the airport 12% 2% 10% 3% 4% 7% 17% 7% 18% Online catalogs (via airline wifi) 4% 3% 7% 7% 12% Onboard advertising 4% 7% 3% 7% 2% 2% 3% 11% Ability to customize the product 3% 2% 2% 4% 2% 2% 4% 12% Purchases via airline app 2% 2% 3% 2% 1% 2% 2% 4% 11% I do not plan to buy retail products onboard flights in the future 17% % 1 Ranked Top 1 Ranked Top 2 Copyright 2018 Accenture. All rights reserved. Accenture 15
16 FLY AND COLLECT OPTIONS APPEAL TO SPECIFIC AUDIENCES
17 AND ARE SIGNIFICANTLY MORE LIKELY TO USE A FLY AND COLLECT SERVICE, COMPARED TO OTHER TRAVELERS What is the likelihood of you using a fly and collect service (i.e., buy on-board a flight and collect at destination airport)? 44% v. 17% 27% 80% 7 40% 40% 31% % 18% 2 22% 1 24% 22% 1 I am not likely to use a service like this 2 24% 50% 27% % 7% 3 10% 22% Overall 13% 4% 13% 11% 1 20% 23% 23% France United Kingdom Japan 41% United States 4 5 I am very likely to use a service like this Chinese travelers are 80% more likely to use a fly and collect service compared to other travelers studied Copyright 2018 Accenture. All rights reserved. Accenture 17
18 YOUNG CHINESE TRAVELERS ARE EVEN MORE LIKELY TO USE A FLY AND COLLECT SERVICE 72% MORE THAN ALL OTHER MILLENNIALS STUDIED GLOBALLY AND MORE THAN CHINESE TRAVELERS OVERALL What is the likelihood of you using a fly and collect service (i.e., buy on-board a flight and collect at destination airport)? 44% 17% 27% 72% 50% v. 8 4 v. 6 38% v. 78% 13% 21% 18% 20% 30% 38% 2 27% 2 1 I am not likely to use a service like this 2 24% 10% 22% Overall 23% 12% 1 48% 10% 3% 2% % 17% 3 24% 4% % 10% 30% 58% 11% 51+ Chinese I am very likely to use a service like this Copyright 2018 Accenture. All rights reserved. Accenture 18
19 CHINESE TRAVELERS WITH HIGHER INCOMES SHOW THE GREATEST PROMISE FOR A FLY AND COLLECT SERVICE What is the likelihood of you using a fly and collect service (i.e., buy on-board a flight and collect at destination airport)? 44% 17% 27% 24% 10% 22% Overall 31% 5 50% 84% 68% 90% 12% % 30% Low 20% 18% 3 21% 12% 12% Low 32% 24% 17% Medium % 3% Medium 32% % 4 12% 0% 2% 1% High High 1 I am not likely to use a service like this I am very likely to use a service like this Copyright 2018 Accenture. All rights reserved. Accenture High income Chinese travelers are twice as likely to use a fly and collect service than travelers overall and 32% more likely than same income travelers in other geographies studied
20 THE KEY TO A FLY AND COLLECT OFFERINGS IS TO APPEAL TO THOSE THAT ALREADY ENJOY PURCHASING CHINESE TRAVELERS ARE THE BEST TARGETS What is the likelihood of you using a fly and collect service (i.e., buy on-board a flight and collect at destination airport)? 44% v. 7 17% 27% 24% 67% v. 93% 51% v. 83% 18% v. 40% v 23% 32% 34% 14% 37% 3% 13% 14% 30% 1 12% % in red Because Chines travelers already make up a larger share of those who shop when they travel, they are the best candidates to exploit the fly and collect offering 1 I am not likely to use a service like this 2 10% 22% Overall 1 7% 30% 8% Always Purchase Sometimes purchase 34% Rarely purchase 6 Never purchase I am very likely to use a service like this Copyright 2018 Accenture. All rights reserved. Accenture 20
21 CHINESE TRAVELERS ARE 81% MORE LIKELY TO USE/COLLECT LOYALTY POINTS OUTSIDE OF THEIR FLIGHT ITINERARY COMPARED TO THEIR GLOBAL COUNTERPARTS Do you collect/use airline loyalty points on retail items outside of your flight itinerary (e.g., at the supermarket, gas station, etc.)? 81% 37% 31% 30% 30% 2 67% 63% 6 70% 70% 74% No Yes 33% Overall United Kingdom United States Japan France Copyright 2018 Accenture. All rights reserved. Accenture 21
22 AND CHINESE MILLENNIALS ARE MORE THAN TWICE AS LIKELY TO USE/COLLECT AIRLINES POINTS OUTSIDE OF TRAVEL Do you collect/use airline loyalty points on retail items outside of your flight itinerary (e.g., at the supermarket, gas station, etc.)? 11 37% % 28% 57% 81% 63% 5 61% 3 72% 43% No Yes 1 Overall Chinese Chinese Chinese 51+ Copyright 2018 Accenture. All rights reserved. Accenture 22
23 DEMOGRAPHICS Among Chinese respondents only AGE GENDER 14% 24% 1 54% 4 Gen z Millennial Gen X COUNTRY 1 17% 11% 20% Baby Boomer Generation Silent Generation Greatest Generation USA France 20% 20% UK 20% Japan 20% Total N=2,500 N=500 per country Copyright 2018 Accenture. All rights reserved. Accenture 23
24 CRUISE FINDINGS
25 EXCECUTIVE SUMMARY: CHINA Younger generations and higher income groups are cruise enthusiasts. CRUISING ENTHUSIASTS Age Income % High % Medium 22% 51+ Low 4% Chinese travelers place high value on having unique traveling experiences, and this is more dominant for younger generations and higher income groups What would get you to consider going on a cruise? Better pricing Availability of unique on-board experiences/activities A loyalty program with great offers and discounts Having a resort-type vacation experience What would impact interest in booking a cruise? (Top 3) 77% 7 03 More and better choices for off-shore excursions/off-shore activities Ability to choose a themed vacation 7 Copyright 2018 Accenture. All rights reserved. Accenture 25
26 WHO ARE THE CRUISERS? YOUNGER GENERATIONS AND HIGHER INCOME GROUPS ARE THE CRUISING ENTHUSIASTS. WHILE, OLDER AND LOWER INCOME GROUPS ARE THE LEAST ENTHUSIASTIC. Level of cruise enthusiasm Age Income 1 Cruising Enthusiasts 80% The Open-Minded 23% 13% 4% 22% 2 4% The Landlubber 73% 84% 87% 88% 74% 7 4% 3% 7% % 3% 1% Low Medium High Base: sample, 500 respondents Copyright 2018 Accenture. All rights reserved. Accenture 26
27 WHAT DO CHINESE CRUISERS WANT? THOUGH PRICE IS A BIG FACTOR, CHINESE TRAVELERS PLACE HIGH VALUE ON HAVING UNIQUE TRAVELING EXPERIENCES What would get you to consider going on a cruise? OVERALL CHINA Better Pricing 24% 24% 48% Better options of ports of departure and return More and better choices for off-shore excursions/off-shore activities Better Pricing 7 78% Availability of unique on-board experiences/activities 78% More and better choices for off-shore excursions/off-shore activities Pricing and Better routes Pricing and Experience Base: sample, 500 respondents Copyright 2018 Accenture. All rights reserved. Accenture 27
28 CHINA OVERALL WHAT DO CHINESE CRUISERS WANT? AND TWO-THIRDS OF CONSUMERS SAY HAVING A RESORT-TYPE VACATION EXPERIENCE AND ABILITY TO CHOOSE A THEMED VACATION WOULD IMPACT THEIR INTEREST IN BOOKING A CRUISE. Please indicate the extent to which each option would impact your interest in booking a cruise. Ability to customize my vacation options at the time of booking 74% Ability to pre-pay for my vacation in advance order to avoid hidden or extra charges 73% What would impact booking interest? Better dining options (dining times and choices) 72% A loyalty program with great offers and discounts 77% Having a resort-type vacation experience 7 Ability to choose a themed vacation 7 Copyright 2018 Accenture. All rights reserved. Accenture Percentages are Top 2 Box Scores (Some impact + Significant Impact) Base: sample, 500 respondents 28
29 WHAT DO CHINESE CRUISERS WANT? WHILE YOUNGER GENERATIONS ARE MORE FOCUSED ON THE EXPERIENCE, OLDER GENERATIONS WANT LOYALTY PROGRAMS AND PERSONIZED VACATIONS OPTIONS. What would get you to consider going on a cruise? Having a resort-type vacation experience 7 01 Ability to choose a themed vacation 7 01 A loyalty program with great offers and discounts A loyalty program with great offers and discounts 7 7 Ability to customize my vacation options at the time of booking Better dining options 77% A loyalty program with great offers and discounts Ability to receive personalized vacation options based on the personal information and interests that I provide 67% 74% Ability to fully research and book my vacation online from a single trusted website or app / Having a resort-type vacation experience Experience and Discounts Themed vacations and Better dining Loyalty and Personalization Copyright 2018 Accenture. All rights reserved. Accenture Base: sample, 500 respondents 29
30 HIGHER INCOME GROUPS ARE THE PIONEERS OF GREAT VACATION EXPERIENCE. MOREOVER, THEY EXPECT ADVANCED IN-ROOM TECHNOLOGY ALONG WITH CUSTOMIZED VACATIONS OPTIONS. FOR LOW-INCOME GROUPS LOYALTY PROGRAMS IS A TOP PRIORITY. What would get you to consider going on a cruise? Low Income Middle Income High Income 01 A loyalty program with great offers and discounts 72% 01 A loyalty program with great offers and discount 78% 01 Having a resort-type vacation experience 87% Better dining options 70% Ability to choose a themed vacation Having a resort-type vacation experience 7 78% Ability to manage my vacation in real-time via a mobile device /Ability to book to the time of vacation: ability to receive notifications on improvements or changes I can make to my reservation Ability to choose a themed vacation 83% 8 Availability of advanced in-room technology /customize my vacation options at the time of booking / discounts Discounts and Better dining Discounts and Experience Experience, Technology and Customization Copyright 2018 Accenture. All rights reserved. Accenture Base: sample, 500 respondents 30
31 DEMOGRAPHICS Among Chinese respondents only AGE GENDER 3 41% 20% 54% COUNTRY USA France UK Japan 20% 20% 20% 20% 20% Total N=2,500 N=500 per country Copyright 2018 Accenture. All rights reserved. Accenture 31
32 PRIVATE ACCOMMODATION FINDINGS
33 HOTELS ARE THE EXCLUSIVE OPTION FOR A THIRD OF BUSINESS TRAVEL, BUT CHINESE TRAVELERS ARE SIGNIFICANTLY MORE LIKELY TO EXCLUSIVELY STAY IN A B&B OR WITH FRIENDS AND FAMILY To what extent do you consider each of the following accommodations when planning a business trip? Traditional hotel room or suite 31% 43% 2 «Exclusively» Top Countries % Japan 3 Business Travels Bed and Breakfast 17% 37% 4 38% Stay with friends or family 14% 37% 4 24% Private condo accommodations 2 Private house accommodations 10% 22% 67% 6 USA 18% USA 18% Other % 3-Exclusively 2 - Usually 1 - Never Copyright 2018 Accenture. All rights reserved. Accenture Base: Total sample, 2500 respondents 33
34 THE SAME IS TRUE FOR LEISURE TRAVEL AS CHINESE TRAVELERS CHOOSE TO STAY WITH FRIENDS AND FAMILY AND MUCH MORE LIKELY TO SELECT A B&B OPTION FOR LEISURE TRAVEL To what extent do you consider each of the following accommodations when planning a leisure trip? Traditional hotel room or suite 31% 53% 1 «Exclusively» Top Countries % Japan 48% Leisure Travels Bed and Breakfast 1 51% 30% 38% Stay with friends or family 18% Private condo accommodations 12% 33% 5 USA 23% Private house accommodations 11% 33% Other 57% USA % 3-Exclusively 2 - Usually 1 - Never Copyright 2018 Accenture. All rights reserved. Accenture Base: Total sample, 2500 respondents 34
35 FOR MOST TRAVELERS GLOBALLY, PRICE IS THE MOST IMPORTANT FACTOR LEADING TO A CONSIDERATION OF PRIVATE ACCOMMODATION, BUT CHINESE TRAVELERS PLACE FAR LESS IMPORTANCE ON COST What would get you to consider a private accommodation (private house, private condo, etc.) when deciding on where you will stay while traveling? What would get you to consider private accommodation? 29 % Better Pricing Highest 37% 1 Lowest Japan 14 % The location of private accommodations are more appealing Highest 18% 11% Lowest Japan Highest 1 4% Lowest France 10 % The unique experience of a private accommodation Chinese travelers are half as likely to say price drives their choice for private accommodation -- instead they are motivated by the opportunity for unique experiences. Copyright 2018 Accenture. All rights reserved. Accenture Base: Total sample, 2500 respondents 35
36 CHINESE TRAVELERS ARE ALSO NOT LED BY PRICE WHEN IT COMES TO THE SELECTION OF PRIVATE ACCOMMODATION What most drives your decision to select private accommodations (private house, private condo, etc.) when deciding on where you will stay while traveling? What drives the decision to stay in a private accommodation? 21 % Better Pricing Highest 34% 14% Lowest France US 14 % The location of private accommodations are more appealing Highest 24% Lowest Japan Highest 18% Lowest US France 13 % The unique experience of a private accommodation Copyright 2018 Accenture. All rights reserved. Accenture Base: Total sample, 1363 respondents 36
37 UNDER HALF OF TRAVELERS STUDIED STAYED IN A PRIVATE ACCOMMODATION IN THE LAST 6 MONTHS -- CHINESE TRAVELERS WERE OVER 40% MORE LIKELY TO SELECT PRIVATE ACCOMMODATION* Have you ever made the decision to book a stay at a private accommodation (i.e., condo, home, beach-house, etc.) instead of a traditional hotel in the last 6 months? Age 3 61% 48% Yes 40% Yes 5 USA 4 2 Gen z Millennial 1 Gen X 17% 41% France 47% UK 31% Japan 1 Baby Boomer Generation Silent Generation Greatest Generation * It is possible that Chinese travelers consider staying with friends and family a private accommodation so these results should be received with caution given potential ambiguity in interpretation by Chinese travelers Copyright 2018 Accenture. All rights reserved. Accenture Base: Total sample, 2500 respondents 37
38 DEMOGRAPHICS Among Chinese respondents only AGE 2% 3 41% 57% 43% Gen z Millennial Gen X 21% 1% 0% 20% Baby Boomer Generation Silent Generation Greatest Generation USA France 20% 20% UK 20% Japan 20% Total N=2,500 N=500 per country Copyright 2018 Accenture. All rights reserved. Accenture 38
39 ACCENTURE RESEARCH THANKYOU
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