Three key MENA opportunities to target Chinese tourists

In order for the MENA region to capitalise on the Chinese luxury travel boom, a number of factors, such as familiarity with China's own digital payment systems and provision of Mandarin-speaking staff and Chinese language materials, have to be incorporated into the marketing strategies of hospitality industry players, a report revealed.

The report issued by The Luxury Conversation, a platform that provides insight into Asia’s growing luxury consumer, stated that demand drivers for the MENA region also include the ability to appeal as a "new and exotic" travel destination to the Chinese traveller and the readiness to conduct outreach on the Chinese mainland in order to remain top of mind among Chinese consumers when they are making travel plans.

“The MENA region is becoming a hot spot for China’s growing group of luxury travellers. Many have already gone to Asia, Europe and America and are seeking more unique getaways that blend great hospitality, unique culture and experiences, shopping and local cuisine,” said Nick Cakebread, managing partner for Reuter Communications, a luxury marketing agency that commissioned the report.

The MENA region has lagged behind destinations such as Europe, Asia, Australia/New Zealand and North America in popularity, but is now witnessing a boom in Chinese visitors. Growth has been partly driven by local travel incentives introduced into the region, including visas on arrival for Chinese nationals visiting the UAE, and the rising sophistication of Chinese travellers seeking new destinations off the beaten path. Additionally, China’s ‘One Belt One Road’ initiative, which cuts through the Middle East and Africa, has the potential to put MENA on the map for travel savvy Chinese.

The outbound Chinese travel market is currently worth US$ 168 billion and still on the rise, with the 120 million and still-growing band of Chinese consumers travelling the world in search of local culture, experiences, food and shopping, the report said.

The report revealed three major opportunities for brands in the MENA region.

Click through to find out what these are...

Travel & Tourism
The MENA region is seeing a tourism boom from China. In Abu Dhabi, plans to attract 600,000 Chinese tourists a year by 2021 would represent a 265 percent increase on the figures recorded for the first nine months of 2016.

In Dubai, 540,000 tourists arrived from China in 2016, up from 450,000 a year earlier and cementing the country’s place as a top 10 source market for the emirate. Thirteen Chinese cities, including Beijing, Guangzhou, Shanghai and Shenzhen, as well as Hong Kong and Taipei, are connected to Dubai with more than 100 weekly flights.

Meanwhile, even before Morocco’s decision to drop visa requirements for Chinese visitors in July 2016, Chinese online travel company Ctrip predicted a 3,500% increase in visa applications to the country. With 42,000 Chinese tourists in 2016 – a 300% year-on-year increase from 2015 – Morocco has announced a goal of 100,000 visitors from the Middle Kingdom this year. 

Retail
According to the report, by 2019, Chinese tourists will spend $264 billion abroad. Shopping is accounts for more than half of Chinese tourists' total spending, with Chinese shoppers abroad expected to buy more luxury goods this year than tourists from all other countries combined.

Up to 25% of luxury goods sold in Mall of the Emirates are purchased by Chinese tourists according the Majid Al Futtaim Group, which has 11 malls across the Middle East.

Dubai’s retail sector accounts for more than 40% of all tourism spending in the region. This is expected to increase in the coming years with the introduction and development of quality retail offerings. This includes Muscat’s Palm Mall and Riyadh’s Mall of Saudi, which will include indoor skiing when it opens its doors in 2022.

Culture & Heritage
While shopping remains important, the shift away from the material to the experiential is increasing among Chinese travellers.

According to a report by Airbnb Inc., Chinese tourists are searching for lesser known cities and villages when traveling to countries and regions related to the 'Belt and Road' Initiative. The rise in interest in cultural tourism lies parallel to Chinese travelers’ eagerness to one-up their friends with photos from far flung destinations posted to their WeChat Moments newsfeed. 

The report concludes that the business opportunity for brands in the region is exponential for those players who have the ability to understand and act on the needs and aspirations of today’s modern Chinese traveller, which include:

• A desire to travel to new and exotic locations.
• The need for outreach within mainland China in order to get on the radar of travellers in the planning stages of travel.
• Mandarin speaking staff and Chinese-language written materials
• Familiarity with China's infrastructure of social networks and digital payment systems