Going for Gold

Helena Beard, managing director of China Travel Outbound, asks: will Golden Week reach the UK this year?

It’s ‘back to school’ week, and in offices everywhere people are busy organising their plans for the rest of the year. On the China Travel Outbound office calendar, the next dates with a double thick red ring encircling them are October 1-8: Golden Week.

Golden Week is one of the most important dates in the Chinese year, marking National Day on October 1, the anniversary of the founding of the People’s Republic in 1949.

While the national holiday is officially only three days, most Chinese will take the full week off work.

Traditionally, the Chinese have flocked throughout China via train and by car, seeing friends and family, taking breaks in the country, and visiting domestic tourism attractions.

Images of crowded train stations and gridlocked roads fill the media and the numbers take your breath away.

Last year it was reported that 590 million tourists visited attractions in China during the week. More than 14 million people took to the train on the first Saturday of Golden Week, and the next day, the Forbidden City attraction sold 166 tickets per minute.

Looking further afield

But while past Golden Week frenzies have been confined to domestic travel and short haul destinations such as Singapore, Japan and South Korea, now, more Chinese tourists are turning their attention to more distant shores.

It is estimated that a record 6 million Chinese nationals opted to travel overseas for their Golden Week holiday in 2016. With shopping high on the agenda, Europe, with its authentic designer goods, tax-back schemes and lower taxes on luxury items, is becoming a more and more popular choice for this high spending market.

Luxury goods can be up to 30% cheaper than they are in China plus there is the added kudos of having bought your Mulberry handbag in the country of, if not its birth, at least its conception.

Exchange rates have a big impact. Following Brexit, Golden Week 2016 saw sterling at the lowest it had been in 10 years, meaning the UK was around 10% better value for money than in 2015, enticing Chinese tourists not only to come to the UK, but to take advantage of great retail prices and spend, spend, spend.

The UK saw a 58% rise in Chinese tax-free shopping during Golden Week last year fuelled not only by the great value prices, but also by dedicated promotions on Chinese travel websites such as Ctrip. Most were coming to London.

Prediction for 2017

Admittedly, sterling has made a slight come back so the UK isn’t quite so cheap. In October 2016, tourists could expect to receive around £0.12 for their Renminbi, where today they would receive slightly less; around £0.115. But this remains a very good rate in comparison to previous years.

London still competes for attention with Paris, Madrid and other Eurozone capitals, and while history, culture and iconic attractions have a big influence on travel choices within Europe, value for money is a key motivator for the Chinese market.

Looking at the euro, last year the Renminbi would have bought you €0.136 to splash out in the designer boutiques of the Champs-Élysées. Today, that same Renminbi may only take you to Printemps, with a rate of €0.127.

So the Chinese will get around 6% less for their money in the Eurozone this year, and around 4% less in the UK.

Minor exchange rate nuances will obviously be weighed up against general costs including hotel rates, flights and, of course, visa prices and accessibility.

More importantly perhaps, and yet to be fully understood, is the impact of the terrorism attacks suffered in Manchester and London earlier this year.

Terror impact

In the wake of the Paris attacks in 2015, France saw a drop of approximately 30% in visitors to its capital. Anecdotally, we heard from our staff in China that the media coverage of the UK attacks has been fairly minimal in comparison.

Stories reaching China of the Manchester attack seemed to focus most heavily on the kindly actions of the Mancunian community, and we were told the Westminster attacks took prominent position on Weibo feeds for only 24 hours.

In comparison, the Chinese media coverage of the 2015 Paris attacks was high-impact and long-lasting. A reflection of media ennui, or simply a result of the limited film footage taken in the UK, compared to the extensive user generated content from France?

Whatever the reason, it seems that the China-UK market remains resilient. This summer, travel consultancy ForwardKeys claimed forward bookings to the UK from China for June-August were up 29%.

Consider this on top of a 40% two-year growth since 2014 and a UK which remains good value for money, has great shopping options, fascinating heritage – and now even a new royal baby on the way – and it looks like the first week of October may well see London’s streets paved with gold.