Get ready – the Chinese middle class is coming to Britain

Chinese tourists in front of Tower Bridge © Getty images
Chinese tourists are heading for London

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 a rising proportion of those trips will be long 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”.

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.

In this week’s magazine – out today (get your first four issues free if you’re not already a subscriber) – Jonathan Compton is discussing his views on China. And for more, you can watch my interview with Paul Hodges (he’s impressed by China’s current strategy), and read John Stepek on why you should stay invested in the Chinese stockmarket.

And as for hotels that suit the Chinese? Intercontinental has clearly been listening to Napier: its launched Hualuxe, a China-centric hotel brand that will be rolled out worldwide and offer everyone staying congee (rice porridge) for breakfast.