Chinese overseas travel is big and getting bigger. The generation born in the 1980s will increasingly dominate the outflow, crucial for Asian gaming destinations including Macau, Manila and South Korea. A report from leisure architect and environment specialist YWS Design highlights how these Chinese millennials differ from their parents and from their opposite numbers in the US.
The sheer volume is staggering. Last year, a record 109 million Chinese traveled oversea and spent $164 billion, making them the world's largest and most lucrative group of travelers. The growth recalls the Japanese travel surge of the 1980s, except that the pool of Chinese is ten times larger. In 2019, Bank of American/Merrill Lynch estimates 174 million Chinese traveling overseas and spending $264 billion. Investment bank CLSA estimates Chinese overseas travelers will reach 200 million by 2020. The 200 million Chinese millennials, products of the one-child policy raised mainly during boom times, are leading the wave.
They share some key traits with their parents, such as love of shopping, and with US millennials, such as love of wi-fi. But Chinese millennials have unique characteristic that the leisure and hospitality industry, including the casino business, ignores at its peril, the YWS white paper by its director of market research and consumer insights Roberto Coppola warns.
"Attracting Chinese millennials to a physical product, or a physical space, requires an acknowledgement that what has worked in the past will likely not work with them," Coppola writes. "For leisure and interconnected businesses this means developing beyond a small singular localized element within a designated environment. The larger experience – driven by a desire for something different, unique and genuine – should also be contemplated in ways that reflect and even encourage the blurring of cultural lines to that place where discovery of something 'new' is likely always the experience for someone in the room."
Their parents are famous for spending $6.000 on a handbag but staying in a flophouse and eating instant noodles. But Chinese millennials consider lodging part of their leisure experience and are willing to pay for something unique. Circus Circus pioneered this space four decades ago, and Japan flavored Nobu Hotel offers something out of the ordinary in another direction. Millennials also don't want to jump off a tour bus, snap a photo and jump back on, according to the report, but seek deeper cultural experiences.
Like their US counterparts, Chinese millennials are a tough sell for casinos. They're not interested in slot machines and most other gaming options. Las Vegas has drawn US millennials with its party scene, but Chinese millennials are more likely to be married and traveling with their significant other so not big on clubbing or other environments that encourage social collisions. They do, however, share their parents' love of karaoke. In addition to having karaoke bars, with private rooms and a full menu of non-alcoholic beverages and food for sharing, YWS suggests incorporating elements of karaoke, where people reveal their true self among friends, in other activities. Chinese millennials like coffee as well as tea, the white paper also notes, and venues for enjoying a beverage can be made more appealing with touches of local (or Chinese) culture, perhaps by repurposing club or other spaces during idle hours.
The white paper highlights popular China hot pot restaurant chain Hai Di Lao, which makes waiting for a table part of its unique experience. During waits that often reach three hours, customers can enjoy manicures, hand massages, shoe shines, free wifi and snacks, get phones repaired and even play cards or chess, with toys on hand for children. In dining areas, servers perform Hai Di Lao's trademark Noodle Dance to entertain guests; they have time because diners submit their own orders via tablet computer. Coppola says Hai Di Lao demonstrates how leisure and hospitality providers can let their experience begin with the wait for it to start.
YWS is an architecture and design firm, so its view of catering to Chinese millennials comes through that lens, leaving some key questions unanswered. Regarding dining, are Chinese millennials like their parents and almost exclusively interested in Chinese food and related variants? Another is whether Chinese millennials, thought to support China's more assertive nationalism, will visit countries that have political disagreements with China. That has implications for the US, and even bigger ones for the Philippines and Vietnam, developing gaming destinations banking on Chinese visitors to support multibillion dollar resort investments while embroiled in heated maritime territorial disputes with China.