Chinese Tourists Are Driving Global Payment And Retail Change

One of the small joys of travel is waking up a bit later than expected, then skipping the check-out desk on the way to a cab or shuttle bus, the morning off to a strong start because there was no need to wait in a line. That’s one of the driving ideas behind a new service that Marriott International recently launched for Chinese travelers going overseas — a service that also helps to demonstrate how the country’s growing tourist class is changing payments and retail.

At first glimpse, the Marriott move seems small  just another example of the ongoing divorce between payments and physical cards. Last year, the U.S.-based hospitality company signed a deal with Alibaba that enabled consumers to book Marriott hotel stays via Fliggy, the travel services platform owned by the China eCommerce giant. This spring, Marriott redesigned its Fliggy storefront and added a feature called Post Post Pay (PPP).

The Fliggy Payment Feature

PPP enables “qualified Fliggy users to book hotels without paying a deposit, have a comprehensive wallet-free experience during their stay and enjoy an express check-out service,” Marriott said in a press release. “Room charges and incidental expenses are automatically settled afterwards, providing a seamless, wallet-free payment experience for both customers and hotels.”

Launched on Fliggy in 2015, and prior to the Marriott’s new global push of the service, PPP was available at some 100,000 hotels across mainland China. Marriott began working with Fliggy in August 2017. Travelers access Fliggy via web or mobile devices.

According to China Outbound Tourism Research Institute, making the payment feature available for more hotel stays represents more than an effort by Marriott to earn revenue from Chinese overseas travelers, who will spend an estimated $261 billion this year on their trips. Analysts and media reports say that the service more than likely foreshadows other China-centric features to come from the hospitality, tourism and payments industries.

Fliggy Moves To Secure Loyalty

In the coming months, Marriott plans to sweeten its Fliggy offering by adding Mandarin-language features, VIP member experiences and other tools for Chinese consumers traveling abroad. The research institute estimates that other non-Chinese hospitality and tourism companies are making similar moves to capture the loyalty of the 154 million Chinese consumers who will travel overseas this year.

Charles Ralston, chief commercial officer for travel services firm Custom Travel Solutions, said, “Specific attention [is] being paid to Chinese tourists, and that segment has grown significantly over the last several years both in terms of pure size and volume. Hotels can’t ignore it. There have also been a few recent gaffs by U.S. travel companies related to China, so that may also be a factor in terms of sensitivity.”

According to tourism officials, the changes undertaken by Marriott and other companies in that space are being driven more specifically and in large part  by the same factor fueling China’s embrace of mobile payments, social media and eCommerce: The desires of younger consumers. A recent report from the United Nations World Tourism Organization (UNWTO) said that millennials in China are the “forerunners” of mobile apps and “revolutionary” payment methods a finding not lost on tourism officials.

Kobkarn Wattanavrangkul, former Thailand tourism minister, said in a statement, “We need to adapt fast or we may miss the train.”

Granted, the Marriott services on Fliggy — when rendered in Chinese, the word means “flying pig,” by the way — are hardly outliers when it comes to tourism. Among the biggest trends in hotel technology, Wi-Fi and mobile makes checkout less of a pain, and saves guests the trouble of reaching into their wallets or purses for any type of purchase. However, the current and future Marriott services on the Alibaba travel platform are, indeed, part of the larger trend of better targeting Chinese travelers.

Expanding Payment Methods

Alipay is expanding overseas as it follows the flood of Chinese travelers — and students — and seeks their business. So is WeChat. The social media and messaging provider recently signed a deal with Western Union to add WeChat Pay to Western Union’s GlobalPay for Students.

Serving Chinese tourists, or Chinese students studying abroad, will obviously require hospitality and related companies to focus heavily on mobile and stay ahead of the curve. After all, 98 percent of Chinese tourists use “their smartphone abroad to keep in touch with others and to search for travel-related information,” according to Coresight Research.

But mobile is only the beginning. Retailers and payment providers will have to find ways to respond to the changing nature and different types of Chinese traveler — and keep in mind that many of those travelers have now made multiple trips overseas, and have become sophisticated consumers.

The key is constant engagement and digital word-of-mouth, Coresight said. “Brands and retailers should engage with Chinese tourists online at every stage of their trip, apart from conventional advertising. Encouraging Chinese tourists to share their experiences at retail outlets is more influential, as it directly reaches new potential customers.”