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China’s Once-Dependable Tourists Are Growing Younger and Spending Less

Chinese tourists are traveling again, but reportedly aren’t spending like they did before the pandemic.

There was a time when the retail world catered to travelers from China, The Wall Street Journal (WSJ) reported Sunday (Dec. 17), using the example of department stores in Paris hiring Mandarin speakers.

And when China lifted its pandemic restrictions late last year, the retail world waited for a wave of luxury shoppers. Before the pandemic, the China Outbound Tourism Research Institute estimated that there were 170 million outbound trips from the mainland in 2019, and while the United Nations World Tourism Organization pegged spending by tourists that year at $255 billion on 154.6 million trips abroad. The number fell to as low as about 25.6 million in 2021.

“The triple-digit surges are hopeful signs for the brands that derive a significant percentage of top-line contribution from Chinese tourists’ spend,” PYMNTS wrote earlier this year. “Pre-pandemic, Chinese consumers purchased about one-third of the world’s luxury goods, as Bain & Co. estimated.”

However, the WSJ said, the new breed of tourists is skewing younger, and veering away from the tradition of taking tour buses to malls and shopping centers. Instead, they use an app called Xiaohongshu, dubbed “China’s Instagram,” which helps them find new destinations to visit and take selfies. 

“I can buy anything I want online in China,” Yu Jin Huan, a 24-year-old traveler who told the WSJ she used to travel to Hong Kong just to shop. “Now I’m seeking different things on my trips — I want to get an authentic experience.”

The WSJ said this has impacted firms that had counted on “travel retail,” that is, opening stores in popular tourist destinations.

For example, Estée Lauder saw its shares fall sharply last month following a profit warning that was chiefly fueled by expected pressures on its Asia travel retail operations and a slower-than-expected recovery in mainland China. 

Also in November, luxury department store Harvey Nichols said it would be closing one of its two stores in downtown Hong Kong, the WSJ said.

“Chinese tourists coming to Hong Kong are no longer focused on shopping as they used to be before the pandemic,” Dickson Concepts, the operating company for Harvey Nichols, said in a regulatory filing. This “has now been proven … despite the reopening of the borders in February.”