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Winning the Next Billion Asian Travelers—Starting with China

December 5, 2013 By Frank Budde , Paul Tranter , Achim Fechtel , Alan Wise , Vincent Lui , and Terri Milunsky

Asian travelers are packing their bags in record numbers, fueling a transformation of the global travel and tourism industry. By 2030, 49 percent of all passenger traffic globally will be within the Asia-Pacific (APAC) region or between APAC and the rest of the world, up from 37 percent today. In fact, more than 50 percent of the growth in global traffic will come from the APAC area. As disposable income rises, a billion people in Asia will have annual earnings of US$15,000 or more—and will be ready to give their travel business to airlines, hotels, and tour companies around the world. The vast majority of these “next billion” travelers will come from China, India, Indonesia, Japan, and South Korea.

Travelers from China will account for the lion’s share of this growth—and about 40 percent of Asian outbound (international) travelers by 2030. Within the same time frame, China will likely overtake the U.S. as the largest domestic-travel market in the world.

Judging from their past spending levels, the Chinese will be more than willing to open their wallets: Chinese urban travelers took about 500 million domestic and outbound trips (excluding day trips) in 2012, spending about US$260 billion. According to analysis by The Boston Consulting Group, those numbers will increase to 1.7 billion trips and US$1.8 trillion in spending by 2030. (See Exhibit 1.)

It’s no wonder that global travel and tourism companies have taken notice and are developing strategies for gaining a share of China’s booming market. The reality, however, is that although the opportunities are enormous, so are the challenges, and both Chinese and non-Chinese companies will have to fight for a share of the market.

To better understand the unique characteristics of China’s market and how travel and tourism companies can make competitive inroads, BCG drew on many years of research that our Center for Consumer and Customer Insight conducted on the Chinese traveler, including a detailed 2013 survey of young affluent Chinese travelers.

In addition, we consulted our network of experts, conducted a series of interviews with industry players, and worked closely with TripAdvisor China’s official site (daodao.com) to identify the destinations that Chinese travelers are investigating, the cities they come from, and the factors that motivate their travel choices. This report focuses on China, and future BCG reports will cover other growing markets such as India and Indonesia.

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Winning the Next Billion Asian Travelers—Starting with China
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