5 Key Facts You Need to Know About the Chinese Tourism Market
Guest Post by Dr.Berenice Pendzialek, Chinese Tourism Specialist
I’m thrilled to be invited as a writer for the blog series about China ́s outbound tourism.
In this first piece, I would like to present you with key information about the Chinese market, its tourists, as well as future perspectives and challenges. This is a compilation of answers to questions I usually receive from clients during consulting projects.
Beyond giving you a general picture of the market ́s current situation, I hope this information serves as a starting point for your future involvement with the market if you are not yet working directly with Chinese tourists. Or perhaps this may serve as an update for those more experienced.
Table of Contents
1. Chinese are traveling everywhere
According to the World Tourism Organisation (UNWTO), 135 million Chinese traveled overseas in 2016, 6% more compared to 2015. While these figures may be impressive, a closer look at this data is needed. Hong Kong, Macau, and Taiwan are still the top destinations of choice among Chinese tourists. But fortunately for long-haul destinations, these traditionally popular destinations in China are losing their share of the market.
Chinese are interested in discovering new destinations around the globe. For first-time long-haul travelers, typical must-see destinations in Europe and the USA are on the top of the list. However, for experienced travelers, there are no boundaries. A recent survey from the China Tourism Academy (CTA) and the online travel agency Ctrip mentioned the countries Chinese would like to visit during Chinese New Year 2018. Besides neighboring countries (Thailand, Japan, Singapore, Vietnam, and Indonesia), there is a strong demand to visit distant places in Antarctica, Argentina, Brazil, Tahiti, Norway, Tanzania, Iceland, Mexico, New Zealand, and Finland.
2. Champions in international tourism expenditure. But no longer only shopping
In 2012, China took Germany ́s place as the number one tourism source market worldwide, and since then the expenditure by Chinese tourists has been parabolic. In 2016, it grew by 12% to US$261 billion, dwarfing the United States in second-place with expenditure rising 8% to US$124 billion.
Over the years, spending habits have shifted from allocating one ́s budget on shopping, to investing in self-recreation. According to the latest Chinese International Travel Monitor 2017 of Hotels.com, Chinese outbound travelers spent around US$315 daily on local expenses. Their daily budget was mostly consumed by dining expenses, sightseeing, and wellness activities. As far as accommodation and transport are concerned, young families traveling with children are likely to spend more on these. However, Chinese millennials are more likely to sacrifice their comfort in the areas of accommodation and transport and prefer to allocate more of their budget for entertainment experiences.
3. Daily Expenses by Chinese travelers
Regardless of whether the Chinese are traveling alone or in a group, quality plays a crucial role.
China’s outbound market represents a constellation of segments and niches overlapping and interacting with each other. To categorize and simplify the market, we can separate them into two groups. There is a mass amount of tourists traveling in organized groups and there are independent travelers.
Mass group travelers represent about 40% of the market. Many of them have limited travel experience and foreign language skills, therefore they prefer the comfort and security of traveling with a group.
The tourism offers for this segment are all about intense sightseeing and low quality. These offers consisted of itineraries which are referred to as ‘’seeing flowers from a galloping horse.’’ This translates to seeing 10 different countries within 9 days. The pace is so fast, it is nearly impossible to truly experience each location to its full potential. However, the mass segment is evolving: groups are smaller, fewer countries are visited and tour routes are packed under a thematic umbrella.
Independent travelers have a greater sense of freedom. Many of them started their tourism career in a tour group and now they completely or partially organize their travels for themselves. Beyond a superficial consumption of a destination, they look for immersion and to experience a place like a local. To increase their social capital, they constantly seek out new activities, in new destinations, and in unexpected times of the year.
As far as demographics are concerned, most travelers are middle-aged (30-49 years) coming from China’s first and second-tier cities. Women make the majority of Chinese outbound travelers with around 56% of the total. Family tourism is quite present in the market and it is not just about families traveling with young children, but also about adult children traveling with their parents or showing them the places where they study abroad.
The market has evolved and tourism is no longer seen as an extraordinary activity, but as one that shapes and improves one’s life. Access to information and travel experience has made the market into a more demanding one where quality is a winning card for businesses wanting to attract Chinese tourists.
Recommended reading: The Top Digital Platforms to Reach Chinese Tourists
4. Extreme tech-savvy. Go online or go home
With 731 million internet users, China is the country with the most citizens online. Nearly 80% of this tech-savvy group consists of mobile internet users. Digital usage is their top choice to plan and manage their experience of a new destination. A typical digital customer journey will have a Chinese tourist gathering inspiration from official Chinese websites and key opinion leaders (KOL).
To book a flight, Taobao offers cheap options, that can be easily paid via Alipay App. For other amenities, day-time activities or to rent travel-related services, tourists can just have a look at service providers’ official accounts or at Alipay Live Accounts
At their destination, according to the research of Hotels.com, Chinese tourists use their digital equipment to keep in touch (74%), take photos/videos (67%), search for travel info (57%), check the weather (49%) and for navigation (45%). Tons of photos are posted on social media. Reviews of their tourism experiences are also posted on the travel website QYER.com.
Unlike China, shopping is not quite as agile in Europe. Only a few retailers have an online pre-order function and even while many accept China UnionPay credit card, Chinese mobile payments Alipay) acceptance is rather low. Fortunately, this is not the case for Regiondo ́s clients. Regiondo users now have Alipay as Dashboard features, allowing them to cater to the growing Chinese market.
5. Positive perspectives with enough room for improvement
In general, there is a positive outlook regarding the development of the Chinese outbound tourism market. This is mainly fueled by travel affordability, easier visa application, and an increase in direct flights from China. According to the China Outbound Tourism Research Institute (COTRI), currently, 27 destinations offer visa-free entry for Chinese citizens, and 39 offer visa on arrival or E-Visa. On direct flights, the institute reported that more than 100 new connections were started in 2017 and for 2018, emphasis will be made in starting connections between China’s second-tier airports and abroad.
Forecasts are quite optimistic. For example, CLSA ‘s report expects that 200 million Chinese will travel overseas by 2020.
Recommended reading: How to Design the Perfect Experience for Chinese Tourists
On the other side, there is still plenty to do in terms of communication and product adaptation to cater to Chinese travelers. On a macro level, initiatives like the 2018 EU – China Tourism Year help to reduce knowledge gaps and promote cultural and commercial exchange.
On a service provider level, being present on social media is also important. How can you create relevant messages that stand out from the crowd and reach these desired customers? As a service provider wanting to provide quality experiences and make Chinese tourists feel welcome in a destination, what should you take into consideration when designing tourism experiences? These two questions will be explored in the upcoming blog entries of this series.
This article was written by Dr.Berenice Pendzialek, a writer for Travel Massive. For over 10 years, Berenice devoted herself to Chinese Tourism and possesses extensive knowledge on the topic of outbound tourism to Europe. She is the former general manager for China Outbound Tourism Research Institute (COTRI) and since 2015 she lives in Hamburg and works for Travel Massive.