03 March 2015

Report from IHG unveils scale of China outbound opportunity

  •  IHG publishes comprehensive report scaling the ‘China Outbound’ travel opportunity, in partnership with global research company, Oxford Economics

  • Report examines historical and current trends in Chinese outbound travel and how economic and demographic developments will shape demand for Chinese travel over the next decade

  • Research provides unique insight into which countries and, for the first time, which cities, will benefit most from significant growth in Chinese outbound travel globally

  • IHG well-positioned to meet growing demand from Chinese travellers, with HUALUXE Hotels and Resorts brand and China Ready programme 

 

InterContinental Hotels Group (IHG®), one of the world’s leading hotel companies, has partnered with Oxford Economics to publish one of the most comprehensive studies into the Chinese travel market ever undertaken. The report reveals the scale of the opportunity for global travel destinations to benefit from shifting patterns in Chinese travel, with London, New York, Los Angeles, Sydney and Tokyo expected to benefit most.

Published today, The Future of Chinese Travel report shows that favourable economic and demographic trends shaping the Chinese travel market are set to fuel huge increases in demand for international travel over the next decade. It also reveals the opportunities this growth will present, as Chinese traveller preferences evolve towards long-haul, leisure-driven travel. The study reports that increases in leisure and retail spend will contribute to significant increases in the value of Chinese travellers to local economies.

Richard Solomons, Chief Executive Officer of IHG, commented: “This is a ground-breaking piece of research, which demonstrates the sheer scale of the ‘China outbound’ opportunity for cities and local economies worldwide. With the shift towards leisure travel, coupled with the 90 million Chinese households able to take long-haul trips by 2023, the country’s growing importance in the global travel market cannot be underestimated. With 30 years of experience in China, the recent launch of our new Chinese brand, HUALUXE Hotels and Restaurants, and the roll-out of our China Ready programme, IHG is well-placed to meet this growing demand.”

The Rt Hon Sajid Javid MP and Secretary of State for Culture, Media and Sport in the United Kingdom, commented: “This research highlights just how important it is for us to sell the best of Britain to China. We will continue to do all we can to attract Chinese visitors to the UK, further supporting our tourism sector, which has a proven track record for creating jobs and growth.”

Adam Sacks, President, Oxford Economics, commented:The Future of Chinese Travel Report provides a comprehensive view of Chinese travel and shows that overseas trips will become possible for tens of millions of new Chinese households within the next 10 years. History shows that destinations which improve access for Chinese travellers, experience a significant growth premium in the number of arrivals. This represents a clear opportunity for both countries and international cities to benefit from the huge future increases in Chinese outbound travel.”

 

The Future of Chinese Travel report: Key findings

Scale of the opportunity

  • Annual arrivals from China will total nearly 97 million by 2023  (an increase of 5% per year)

  • 88 million Chinese households will be able to travel overseas by 2023

Increase in family income is the key driver behind this change

  • In the next decade, over 60 million Chinese households will cross the annual income threshold of $35,000, at which point international travel becomes more affordable

Three key trends in Chinese travel will emerge over the next 10 years:

1. Chinese demand for long-haul travel will experience huge levels of growth

  • China will overtake the US, UK and Germany to become the largest source market for long-haul travellers by 2020

  • As Chinese tourism demand matures, preferences will shift toward more expensive, longer-haul trips

2. Chinese travellers will mix business with leisure:

  • By 2023, nearly two thirds (62%) of total Chinese outbound travel will be leisure-driven – a major shift in the purpose of travel for outbound Chinese away from business

3. Chinese travellers will spend more during overseas trips:

  • Per-trip spending by Chinese travellers is expected to grow nearly 75% in nominal terms by 2023

  • Continuing shift in preferences towards higher-cost accommodation and upscale shopping

International cities set to benefit most

  • Cities are the primary destinations for Chinese outbound travellers, with over 85% heading for major cities around the world

  • Nearly 95% of total Chinese outbound travel spending is received by major global cities

  • Among top destination countries, major cities alone receive almost half of each country’s total Chinese visitors

Access is key to attracting Chinese tourists

  • Destinations with easier access, including simpler visa policies will gain most

  • Reforms affecting Chinese travel show levels of arrivals to be 20%pts above historical trends

HUALUXE Hotels and Resorts

IHG opened the first hotel under its HUALUXE Hotels and Resorts brand – HUALUXE Yangjiang City Centre – last month. The HUALUXE brand was developed based on extensive market insight, reflecting its deep understanding of Chinese guests. IHG plans to take the brand to 100 cities across Greater China over the next 15 to 20 years, and over time, introduce the brand to key international destinations, such as London and New York.

IHG’s China Ready Programme

As part of the IHG’s ‘China Ready’ programme, tailored offerings are provided to make Chinese guests feel appreciated and welcomed. Already rolled out to over 80 hotels across 24 countries, IHG’s China Ready hotels have Mandarin-speaking staff, trained Chinese chefs and provide cultural awareness training to their people. Other services include facilities for guests to pay with UnionPay, the only domestic bank card organisation in China, tailored food and beverage offerings and Mandarin-speaking television channels in hotel rooms.

IHG in Greater China

IHG has more than 30 years of experience in Greater China, having opened its first Holiday Inn hotel in China in 1984. It continues to lead the hospitality industry there, opening 11-thousand rooms in 2014 alone, its most ever during a calendar year and more than double that of its nearest international competitor.

For more information on The Future of Chinese Travel report please visit: www.ihgplc.com/chinesetravel

Ends

For further information please contact:

Mark Debenham
mark.debenham@ihg.com
+44 (0) 1895 512 097

About IHG®

IHG (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation with a broad portfolio of hotel brands, including InterContinental® Hotels & Resorts, HUALUXE® Hotels and Resorts, Crowne Plaza® Hotels & Resorts, Hotel Indigo®, EVEN™ Hotels, Holiday Inn® Hotels & Resorts, Holiday Inn Express®, Staybridge Suites® and Candlewood Suites®. In January 2015, IHG acquired Kimpton Hotels & Restaurants, the world's leading boutique hotel business.

IHG manages IHG® Rewards Club, the world's first and largest hotel loyalty programme with over 84 million members worldwide. The programme was relaunched in July 2013, offering enhanced benefits for members including free internet across all hotels, globally.

IHG franchises, leases, manages or owns over 4,800 hotels and more than 710,000 guest rooms in nearly 100 countries, with over 1,200 hotels in its development pipeline. Over 350,000 people work across IHG's hotels and corporate offices worldwide.

In January 2015 we completed the acquisition of Kimpton Hotels & Restaurants, adding 62 hotels (11,300 rooms) to our system size and 16 hotels to our development pipeline.

InterContinental Hotels Group PLC is the Group's holding company and is incorporated in Great Britain and registered in England and Wales.

Visit www.ihg.com for hotel information and reservations and www.ihgrewardsclub.com for more on IHG Rewards Club. For our latest news, visit: www.ihg.com/media, www.twitter.com/ihg, www.facebook.com/ihg or www.youtube.com/ihgplc.

About Oxford Economics

Oxford Economics was founded in 1981 as a commercial venture with Oxford University’s business college to provide economic forecasting and modelling to UK companies and financial institutions expanding abroad. Since then, we have become one of the world’s foremost independent global advisory firms, providing reports, forecasts and analytical tools on 200 countries, 100 industrial sectors and over 3,000 cities. Our best-of-class global economic and industry models and analytical tools give us an unparalleled ability to forecast external market trends and assess their economic, social and business impact.

About Tourism Economics

Tourism Economics is an Oxford Economics company with a singular objective: to combine an understanding of tourism dynamics with rigorous economics in order to answer the most important questions facing destinations, investors, and strategic planners. By combining quantitative methods with industry knowledge, Tourism Economics designs custom market strategies, travel forecasting models, destination policy analysis, and economic impact studies.