CBRE: Chinese spending less on shopping, more on culture

Chinese tourists are seeking more authentic food and entertainment experiences and spending less on luxury shopping and package holidays, according to new research by real estate agency CBRE.

More than 135 million Chinese tourists went on foreign holidays last year accounting for 11% of total international tourist traffic and spending US$1 in every US$5 by foreign tourists. In New Zealand alone, Chinese tourists spent just over NZ$1.5bn in the year to June 2017, said CBRE.

In recent years, however, the Asia Pacific region report from CBRE noted a shift away from spending on luxury and other consumer goods towards culture and experience-based retail.

“It’s critical retail occupiers and landlords take note of the change in spending patterns,” said Tim Male, CBRE NZ’s national director of Advisory & Transaction Services Retail.

“There’s plenty that can be done in this space so that occupiers and landlords stay relevant and continue to attract Chinese tourists. Providing an authentic local experience is a good place to start.”

This could be may be as simple as weaving in a New Zealand style into a fit out, or for shopping destinations, it could be a case of incorporating local culture into their entertainment, such as food markets and concerts, added Male.

CBRE said a survey from August this year showed just one-third of respondents selected shopping as their main motivation for travel, down from 68% in 2016. Another recent study which found spending by Chinese tourists on shopping had fallen by 40% between 2013 and 2017, while spending on food and entertainment has surged.

A more mature domestic retail market in China was a major reason for the trend, according to CBRE, with 54% of international retail brands having at least one store in tier 1 cities such as Shanghai as of the end of 2016.

E-commerce and the ease with which Chinese consumers could shop for foreign-made goods was also seen to be having an impact, while social media had played a part too by exposing tourists to a wider range of tourism experiences via posts and online reviews.

As a result, Chinese tourists were developing higher expectations and more discerning tastes when travelling aboard, according to CBRE – looking for more experience based holidays focused on food, entertainment and local culture rather than package holidays with pre-planned visits to malls.

Increased interest by Chinese tourists in local cuisine and dishes is another trend, with data showing Chinese visitors to Australia spending a quarter of their budget on dining compared to an average of just 10% elsewhere in Asia Pacific.

In New Zealand, Chinese tourists’ spending on food and beverage had increased by 35% in the past year despite the slowdown in their overall spending.

CBRE’s Male said it was no secret that food and beverage retail has been growing rapidly in recent years in the New Zealand market and with Chinese visitors increasingly spending a good chunk of their budget on dining.

“F&B retail that is unique in environment and/or product is the key to bringing in more tourist dollars,” said Male.

“[But] it’s also about offering of unique one-off products not available in China and refining retail service to ensure shopping can still be a part of a more active travel itinerary such as introducing click and collect services to increased presence at airports.”

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