There are up to 500,000 extremely wealthy millionaires and billionaires in China, the majority of whom are looking for high end tourism experiences. Crucially, too, Cayman’s financial industry can offer wealth management services superior to anywhere else in the world.
Although it is difficult to obtain exact statistics as to the number of, and the net worth of, this new astoundingly-wealthy Chinese market, Gervois says that an approximation of Chinese billionaires could be between 100,000 and 500,000, nearly all of whom travel abroad.
“It’s an essential part of their social status; they need to go abroad and be seen with other Western billionaires.
“The first thing is to communicate the high quality of the hotels that they will find because they like to be in an international high-quality hotel of super-luxury. The second thing is the appeal of luxury shopping with minimal or no taxes which is extremely important as they will come to do shopping.
“The third thing is the opportunity for financial services and private wealth management services and Cayman Islands has excellent services which is something that will hold a lot of interest for high net worth Chinese people. It is something that they won’t find if they go to France or the United States; they may find leisure and shopping but they won’t find these specialised wealth management services.”
These nouveau-riche businessmen are the chief executive officers and owners of recently-privatised companies in China, says Shanghai tourism expert Pierre Gervois, and they are all looking for ways to spend their money.
“These companies were former, state-owned Chinese companies and at the beginning of 2000 the Chinese government privatised them. They have worked very hard and grown these companies, which as they bought the companies for nearly nothing they became millionaires and in some cases billionaires in a very short amount of time, mostly by manufacturing products that have been sold to Europe and the United States.
“They are between 40 and 60 years old and there is therefore a second category of wealthy travellers – their sons and daughter. These entrepreneurs give a lot of money to their kids so there is a young generation in their twenties who really don’t know how to use the money of their parents. These young people buy luxury clothes, luxury brands in China and of course want to travel abroad to discover the world of luxury shopping and to show off,” says Gervois, who held a position on the staff of former French prime minister Laurent Fabius.
The marketing expert subsequently went on to be Head of Chinese Affairs at the French National Federation of Chambers of Commerce before being appointed to his current role, CEO at China Elite Focus, a marketing agency based in Shanghai which targets the affluent travel sector in China.
The market is an explosive one in terms of tourism, he says.
“The new generation of Chinese outbound traveller is a complete new generation of traveller that has not been seen in Europe or the United States. Ten years ago, the concept of outbound travel just did not exist in China. Since then the number of outbound tourists went from nearly zero to 50 million so it has been an incredible growth never seen before in the history of the tourism industry.
“The Caribbean is very far from China and Asian destinations like Thailand and the Philippines offer similar services – a sunny destination with beautiful beaches, luxury resorts. They have marketed very well to the Chinese and these destinations are just an hour from China,” continues M. Gervois.
However, he feels that Cayman has a good opportunity to attract the very affluent market because it is an exclusive destination and therefore high on the list of the extremely wealthy Chinese traveller.
“Those destinations are for budget Chinese travellers but these very affluent Chinese do not want to be in the same resorts. They are really looking for exceptional and rare destinations. The first destination is to go shopping in Europe; London, Paris and Milan. Their second destination is New York and Los Angeles, also to do shopping.
“The Caribbean could be the third step for these people or can be combined with their stay in the United States. It’s not a problem that it’s far because if they already go to New York or LA it’s absolutely do-able to spend a couple of days in Cayman Islands.”
Gervois notes, “They may choose to come to Cayman Islands to buy very expensive jewellery, watches, and pieces costing several hundred thousand dollars. This particular tourist can spend a really huge amount of money. Rich Chinese people love diamonds and high end jewellery; it’s very important for them in their culture and they love to buy this very exclusive jewellery. If they can buy it in a very tax-friendly environment it is a card to play.”