It's clear that the future of online travel will be shaped by Chinese and other Asian consumers as well as millennials. As an Asian based hospitality company, CACHET has spent years analyzing Chinese leisure, business and group travelers.
Consider these facts: the number of Chinese tourists going abroad rose by 12% last year to 120 mm. China’s outbound tourism spending has increased from US$15 billion in 2000 to US$205 billion in 2015, representing CAGR of 22.3%, as compared to 4.8% for the US and 5.0% for Britain. The recent increase in U.S. outbound tourism is mainly attributed to a stronger dollar against euros with European countries among the top destinations for U.S. travelers. The Chinese travelers, however, travel and spend across the globe including the Americas, Asia Pacific and Europe.
Source: World Bank, UNWTO
One thing we have learned is that Chinese travelers mostly use travel guides as well as family and friends’ recommendations and brick and mortar travel agents as the basis for their decisions. This is quite different from the U.S. where online reviews websites and social media are the most popular sources for American travelers.
We believe that this is a reflection of a cultural difference and that Chinese travelers will not evolve to become like their American counterparts. Their travel spending decisions will always be more social and community based. In this context, the traditional tools and methods employed by the big hotel groups, including expensive loyalty programs and mass market promotions will have a diminishing marginal return for hotel owners. Asian travelers have also become quite sophisticated and embrace new mobile technologies and adopt online social media platforms quicker and on a larger scale than those based in the West.
Another important trend is the dramatic increase in mobile traveling bookings in China. It is estimated that by 2017, 60% of the country's online bookings will be made on a mobile device. In contrast, France and Germany lag in mobile bookings. By 2017, just 20% and 24% of the countries' online bookings, respectively, will be transacted via mobile. China is set to become the world’s leader in mobile travel bookings.
Based on years of proprietary research, we are developing our hotel and residential platform, CACHET World, to serve as online and mobile app travel guide starting in the lifestyle segment. Our primary focus is on Chinese travelers. The “soul” of our platform are social communities formed by families and friends with expert reviews and content from designers, chefs, artists and other locals.
The “brains” of our platform will provide customers with 24/7 mobile based service and individualized local offers and promotions. We are developing these solutions globally but testing them in China so that we can be prepared to serve the Chinese outbound traveler. To ensure its ongoing relevance, CACHET world will be an open architecture platform, engaging 3rd party developers who build tools not just for travelers but also the community of designers, chefs and developers.
One area where we see significant opportunities for individualization, rather than generic segmentation is in food and beverage offerings. While most of the industry is standardizing buffets and outsourcing restaurants, we are developing a food and beverage CRM component that will enable us to personalize restaurant offerings, room service and banquets and catering for social events.
Please contact us ([email protected]) to access a preview of CACHET World, which is expected to launch in its entirety in early 2017.