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China Golden Week opportunity for property agents worldwide
By Juwai, 02 October 2014
Yesterday kicked off the beginning of Golden Week, the week-long national holiday in China which usually triggers a mass exodus of Chinese travelling locally and abroad.
For many local tourist hotspots in China as well as neighbouring Hong Kong and Macau, Golden Week leads to nightmarish overcrowding and massive traffic congestion.1
For China’s rich and wealthy, however, Golden Week is the perfect time to kill two (or three) birds with one stone by jetting overseas for holiday, university visits and property hunt – all in a single trip.2
This Golden Week, approximately 480 million Chinese are expected to travel – a 13% increase from last year.3 While no breakdown has been specified between domestic and international travel, 54.1 million Chinese travelled out of China in the first half of 2014 alone – an 18.7% jump from 2013, which is a clear indication of the rapid rise in international travel by Chinese.3
And if research from the China Tourism Academy is accurate, a total of 116 million Chinese are forecasted to travel abroad for the whole of 2014, setting new records in Chinese outbound tourism.3
How Golden Week impacts the world outside China
Last year, 97 million Chinese travelled internationally4 and spent US$128.7 billion abroad.5
By 2024, Chinese globetrotters are projected to spend US$283 billion overseas.6
It’s no wonder that during last year’s Golden Week, luxury retailers in the UK raised the game in their tussle for valuable Chinese tourist patronage by hiring Mandarin-speaking sales staff and advertising in Chinese.1
After all, Chinese tourists in the UK spent on average US$12,998 (£8,000) per person1 – making them a sea of VIP customer that any savvy business person in their right minds would try to cash in on.
In the US, Trump SoHo New York launched a Chinese language option on its website and added Chinese cuisine to its in-room dining menu. Chinese guests who stayed during Golden Week also walked away with a free $100 credit for the hotel spa, as well as a complimentary shopping card offering discounts at Bloomingdale’s, La Perla, and DKNY.7
Not to be outdone, competitor The Ritz-Carlton New York at Battery Park launched its Golden Week package offering a five-night stay, four-hour private luxury shopping tour and airport transfer.7
Closer to home in Hong Kong, while much has been said about the influx of Mainland Chinese, it remains undeniable that Chinese tourists are vital – 159,681 Chinese tourists generated US$0.12 billion (HK$0.9 billion) in revenue on the first day of the 2013 Golden Week alone.1
Like it or not, Golden Week stimulates the economy worldwide.
Golden Week 2014 – where Chinese are heading
This year, multiple factors have propelled South Korea, Thailand and Japan to become the top 3 countries for the rising middle-class Chinese.8
South Korea fell onto the radar of Golden Week outbound travellers' interest thanks to the booming popularity of Korean soap operas – which even China's first lady, Peng Liyuan is a fan of – as well as affordable flight promotions.8
Meanwhile, the drop in Japanese yen that amounts to a decrease of 30% in travel cost has stimulated a flood of Chinese visitors to the Land of the Rising Sun, leading to a 57% increase in Chinese tourist in August YoY.8
As for Thailand, the abolishment of visa requirements for Chinese has greatly boosted its appeal to the Chinese, who are equally attracted to its beautiful beaches and shopping appeal.8
For China's affluent, the US, Australia, New Zealand, Europe and Dubai are seen as potential choice destinations. This is largely due to the evolution in Chinese luxury consumer behaviour, whereby wealthy Chinese are beginning to seek once-in-a-life-time luxury experiences over tangible luxuries.
Another factor is the rise in medical tourism. As China’s ultra-rich are beginning focus more on their health and wellbeing, Switzerland and the US are becoming more popular for Chinese HNWIs seeking recuperation and professional medical, beauty and anti-aging expertise.9
The golden impact on real estate
Perhaps what’s more important is that many of these countries are also on the list of Top 10 destinations for Chinese property buyers.10
The US is the #1 real estate destination for Chinese HNWIs, with New York, Miami and Los Angeles as top three favorite cities.10 What’s more, American universities are also most favoured by the Chinese, and they currently have more than 333,000 Chinese students enrolled.
This is vital for property agents to take note, as education drives Chinese buyers looking to buy property abroad, and is the main reason for affluent Chinese who desire to migrate.11
Australia – with its sunny blue skies and stunning natural environment – is the next favourite country for wealthy Chinese buyers, students and tourists alike. Chinese students make up 28.9% of Australia’s international students12, and between the period of June 2013 – 2014 alone, a record-breaking 760,000 Chinese visited the land Down Under.13
It doesn’t take a genius to see the connection between education and Chinese property investments.
On Juwai.com, we’ve even released our Studying Abroad Series for the Chinese elite, which sheds light on the top four education destinations preferred by Chinese HNWIs – the US, UK, Canada and Australia.
How to capitalise on Golden Week
While there’s much to be learnt about Golden Week, there is one thing that we can say for sure: NEVER, EVER dismiss Golden Week as a fad and something you can ignore. (You’ll be crying rivers later if you do.)
And if you’ve missed out on this Golden Week, fret not. The next Golden Week will be in February 2015 during the Chinese New Year holidays, or Spring Festival, as it’s more commonly referred to in China.
Need some pointers on how to get started? Read up on our five Golden Week real estate tips here, and find out how you too, can benefit and reap rewards from Golden Week.
You have 4 months to go, so shape up and get ready for it.
Sources: 1. SCMP; 2. SCMP; 3. The China Tourism Academy; 4. China National Tourism Administration; 5. World Tourism Cities Federation (WCTF); 6. SCMP; 7. Jing Daily; 8. Financial Times; 9. Hurun Report “Chinese HNWIs and their Healthcare 2014”; 10. Juwai data as seen on Forbes; 11. Hurun Report “Immigration & The Chinese HNWI 2014”; 12. China Daily; 13. SCMP