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| +Shaun Rein |
Shaun Rein:
I met Wang Yan one evening in 2014 in the ramshackle store from which she sells Nu Skin’s personal care products. She now earned $800 a month, almost double her earnings when she sold pirated DVDs in previous years. Originally from Guizhou, one of China’s poorest provinces, the 34-year-old Wang had jet black hair cut short and wore stylish blue jeans and a tight-fitting black T-shirt.
As she sold face cream to an elderly woman, she said, “I want to see the world, see new cultures, and do things other Chinese have never done before.” She whipped out her mobile phone and showed me photos of exotic locales she had visited.
She had been to Thailand, Cambodia, and France and now was saving up for her biggest trip yet. She was going to go either to Egypt or Mauritius; she hadn’t yet made up her mind, but she would definitely go to Africa. Considering how little she earned, I was surprised at how widely she traveled.
Rising oil prices made transportation expensive. I asked how she traveled. “I always take the cheapest transportation available, whether red-eye flights or train. I even took a bus to Myanmar,” she answered.
That made sense and explained why airlines schedule so many red-eye flights from China to Southeast Asia. Red-eyes save time and money—most workers get 5 to 10 vacation days a year in addition to 11 holidays but also save two nights’ hotel fare by sleeping on the plane. Budget travelers prefer spending on sight- seeing and buying products than on transportation.
She said she always stayed in cheap hotels most nights—“I expect to be and out and about most days so [I] look for cheap hotels.” She continued, “But every trip, either the first or the last night, I spend extra for a night in a luxury hotel to indulge.” She said on a recent trip to Myanmar, she splurged on a $400-a-night room at the Shangri-La, equivalent to 50 percent of her monthly income.
Wang Yan likes to plot out arrangements by herself. Traditionally Chinese traveled in groups, often forced to because of visa policies that prevented them from traveling alone but also because they had little experience abroad and were scared. But that is changing fast. CMR research has found Chinese under the age of 35 prefer to book their own trips, going where they want at the pace they desire.
As I spoke with Wang Yan, spending habits for middle-class Chinese and Americans diverged. Instead of staying the whole trip in a three-star hotel, such as a Holiday Inn, as many Americans might, Chinese mixed staying in five-star and one- star hotels.
(Ajai) Zechai does business development for General Hotel Management Limited (GHM), a stylish chain of hotels that include the Legian in Bali and the Chedi Dhapparu in the Maldives. Known for creating a distinctive lifestyle experience, with an emphasis on the land and local culture, the chain attracts only the most sophisticated and well-heeled tourists.
The hotel industry runs in Zechai’s blood. His father, Adrian Zechai, was the founder of the Aman Resorts chain, one of the most exclusive resort chains in the world, and serves as nonexecutive chairman of GHM.
“Cheers,” Ajai Zechai said, clinking my glass, and then we took a sip of Soju, a fiery Korean rice-based alcohol. Zechai divulged GHM’s China strategy: “We plan to open dozens of properties in China because we see the demand as more Chinese vacation at our properties in China and globally.” I asked whether Chinese like GHM’s brand position of more intimate experiences.
“Developing a strategy for China is becoming one of our main priorities,” Zechai responded, because GHM has seen a huge increase of Chinese guests over the past few years—it even had a Chinese buy one of its multimillion-dollar apartments in Europe.
“Chinese are becoming increasingly sophisticated and discerning in what they want,” Zechai explained, as I plopped a juicy, perfectly marbled piece of beef in my mouth. Nothing beats Korean barbecue, I think to myself. Zechai continued, “It is not just about bigger is better anymore but distinct experiences, which is exactly what GHM offers.”
GHM is well positioned to grab the shift toward individual and localized experiences. Standardized properties that look the same in New York as they do in Bali or Milan are becoming passé for many Chinese who want to experience local culture in more intimate settings.More in Red Luxury, where part of his book is excerpted.
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.
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