Chinese travelers want luxury travel and hotels, polls show

Consumers in China are planning to pay for hotels, a Morgan Stanley poll conducted in late January showed.

The study points to a growing demand for high-end and luxury hotels in China now that the country has lifted domestic travel restrictions and the Covid wave has passed.

“Consumers appear to be more likely to increase hotel spending for their trips compared to pre-pandemic, with 20% citing this as their top travel spending, compared to 17% in 2017 and 2020,” Morgan analysts say. Stanley.

The report, released on Tuesday, cites a private survey conducted from Jan. 29 to Jan. 31 that surveyed about 2,000 consumers in China’s major cities across 19 provinces.

The report states that “37% of consumers prefer hotels with higher star ratings compared to 18% in 2020, with higher income consumers showing an even greater appetite for luxury hotel stays (47% vs. 31% in 2020). )”.

“References to budget and mid-range hotels have dropped across the board.”

savings rose

Consumer propensity to save has skyrocketed during the pandemic. Retail sales lagged overall economic growth in China due to uncertainty about future earnings.

Morgan Stanley said the study found an equally subdued appetite for shopping, despite being considered a major expense for travelers. Travelers’ shopping budget was 9,405 yuan ($1,387), slightly higher than in 2020 but still well below 2017 levels of 13,782 yuan, according to surveys conducted over the past few years.

“Most consumers expect their total spending to be flat over the next six months (70% vs. 73% last month),” the report says.

But 24% of respondents said they plan to spend more to “improve your lifestyle,” an attitude that typically leads to higher quality products. This is 20% more than a month ago, the report says.

“The increase in consumers wanting to improve their lifestyle through higher spending is universal.”

On holiday spending in China: “We don’t see it slowing down.”

Christopher J. Nassetta

CEO, Hilton Worldwide

China’s per capita disposable income rose 2.9% in 2022 to 36,883 ($5,439), excluding price factors, according to the National Bureau of Statistics. The data showed that for urban households, disposable income rose by more than $1,000 over the national level.

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“You’re already starting to see a significant increase in travel in China,” Hilton Worldwide CEO Christopher J. Nassetta said in an earnings call.

“And we expect, especially in the second half of the year, that you will have a big tailwind from that,” he said, according to a StreetAccount transcript.

“There is still pent-up demand in all segments. I mean, you can argue about leisure… people do a lot of it, but we don’t see it slowing down.”

—Michael Bloom of CNBC contributed to this report.

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