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Get ready – the Chinese middle class is coming to Britain
The hotel industry is catching on to the growing financial might of China's middle class, says Merryn Somerset Webb.
About five years ago, I interviewed Russell Napier for MoneyWeek; we've talked many times since (you can watch the latest interview here). When I asked him what he thought the best long-term investment a person could make was at the time, he said a guest house or hotel in a city the Chinese might like, designed in such a way as to make Chinese guests feel comfortable and staffed by at least one Chinese speaker. Good call.
A report just out from Intercontinental Hotel Group makes it clear that the future of global tourism is all about the future of the Chinese middle class. Last year Chinese tourists made a total of 67 million trips abroad. They particularly like Bangkok (where they spent nearly $4bn last year) plus Seoul, New York, and Tokyo. By 2023, they are forecast to be making 97 million trips a year there's a nice chart on this here and arising proportion of those trips will belong haul.
So far, the UK hasn't made it into the top ten destinations for the millions of Chinese households with incomes of over $35,000 (considered to be the threshold at which they start packing their wheely suitcases), but that, says The Times, may soon change. The report forecasts that between now and 2023, "Chinese holiday spending in Britain's capital will have risen by more than 18% annually, the highest forecast rate of leading tourist cities".
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Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
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There are other ways to take advantage of the growing financial power of the middle classes in China. The new regime has been very clear that their focus from here on will be their attempt to shift China's economy away from cheap production and towards consumption rising wages should be part of that.
And as for hotels that suit the Chinese? Intercontinental has clearly been listening to Napier: itslaunched Hualuxe, a China-centric hotel brand that will be rolled out worldwide and offer everyone staying congee (rice porridge) for breakfast.
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