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BizReport : Trends & Ideas archives : August 19, 2016

Chinese travelers increasingly embrace credit for holiday costs

Long-held assumptions of China being a culture in which saving is king have been challenged by a new report from Worldpay that reveals Chinese travelers are increasingly using credit to pay for their trips.

by Helen Leggatt

Almost three-quarters (72%) of Chinese travelers in Worldpay's study said they paid for their last vacation using a credit option such as a loan or a credit card. This, says Worldpay, is quite a culture shift and brings the country more in line with its counterparts in the US.

And, found Worldpay, it is not the younger generations causing this shift. Credit-funded holidays were most common among "late millennials" and younger Gen-Xers with 73% of 26 to 35 year olds and 77% of 36 to 45 year olds in China admitting they had gone into debt to pay for their last vacation. By comparison, 69% of 26 to 35 year olds and 71% of 36 to 45 year olds in the United States said the same.

However, a significant trend highlighted by Worldpay's research is the demand among Chinese travelers for alternative payment methods. Just 44% of travelers from China said they would use a credit card to pay for their next vacation, compared with 81% in the U.S. Instead, 32% of Chinese respondents said they would use Alipay to book their next flight, while 10% said UnionPay.

"These findings show when it comes to flights and holidays China is now very much a consumer-driven economy and is beginning to challenge the US in terms of spending power," said Worldpay general manager Asia Pacific global eCommerce, Phil Pomford.

"Yet the real learning for airlines and travel companies who want to tap into the passion for international travel means recognizing that while everyone wants to go on holiday, the way they pay for it varies remarkably from country to country. This is especially true in APAC where markets such as China and India have long preferred to use alternative payment methods, as opposed to traditional debit and credit cards."

Tags: payment method trends, research, travel booking, travel trends, Worldpay

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