WORLD ROUTES: China Becomes the Star Performer

China is set to become the world’s biggest travel market and will continue to grow strongly in the next 12 months – Lucy Siebert reports.

Chinese tourist numbers are expected to soar over the next 12 months, despite slowing economic growth and a government-led ‘anti-hedonism’ programme, new research shows. An easing of visa regulations, new Chinese government-led travel initiatives, changing tourist preferences, strong growth in first-time travellers in Tier II cities and the growing influence of social media will fuel growth in outbound travel.

While tourism giants such as the US and France will continue to grow their share of Chinese tourist numbers, smaller countries that have already relaxed their visa rules, boosted air services and which offer pristine natural landscapes, such as New Zealand, Seychelles and Switzerland, are also reaping the Chinese tourism rewards.

This is according to the China Outbound Market Intelligence (COMI), a quarterly publication by the China Outbound Tourism Research Institute (COTRI), one of the most complete sources of outbound travel trends in China.

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According to the report, China has already overtaken the US and Germany in terms of border crossings and spending, making it the leading outbound tourism source market, with Chinese tourists spending US$102 billion last year – up 40% on 2011.

According to the report, China’s outbound travel sector will grow by 17% during 2013, unless there are any exceptional events. This will see 106 million border crossings between July 2013 and June 2014, with spending by Chinese travellers hitting US$129 billion during the 12-month period.

The value of the China market is clear in destinations such as Australia, which will this year see China becoming its biggest source market, and New Zealand, which during 2013 is expected to double the number of Chinese visitors it welcomed in 2011.

New Zealand has already seen Chinese arrival figures leap by 22.9% in the first quarter of this year, which has been followed by strong growth in subsequent months. The report attributes this success to New Zealand’s easing of visa processes and its fast-track scheme for high-end Chinese travellers. The country has also succeeded in marketing its natural beauty and outdoor activity offering products to a maturing Chinese market. This segment is increasingly moving away from packaged tourism offerings towards becoming independent travellers who are seeking clean air and green spaces.

Many other Asian countries are also seeing huge growth in Chinese tourist numbers, with South Korea, Thailand and Vietnam registering sharp spikes this year due to Asia-Pacific politics and the growing influence of social media and other media channels. However, Japan has seen its numbers plummet over the Senkaku Islands crisis and this is expected to continue over the next 12 months.

Within China

A number of economic and social changes are taking place in China that are impacting the outbound travel industry.

Firstly, despite a slowing economy, with China’s GDP growth declining in the second quarter to 7.5%, travel remains a priority for Chinese consumers. While China’s mega-cities continue to provide a steady supply of wealthy and increasingly experienced travellers, the growing middle class in China’s ‘lower tiered’ cities means there are new people who are keen to take their first steps abroad. According to the report, between January and September 2012, the number of tourists from Tier II cities rose by 28% year-on-year. In comparison, in Tier I cities the number of tourists grew by 18%.

Secondly, the Chinese government remains broadly supportive of the outbound travel industry, according to the report. It states that China’s premier Xi Jinping has said 400 million Chinese tourists are expected to travel abroad in the next five years and he has also specifically talked about tourism during a number of his official trips abroad, including a recent one to Mexico. Xi’s comments come despite the Chinese government’s campaign against ‘hedonism’ in society, which does not extend to travel. Instead, for Chinese citizens’, travelling abroad is still viewed favourably and as a means of cultural interchange and education, according to COMI.

Meanwhile, new regulations came into effect in July that allow Chinese citizens from 43 major cities to apply for or renew their passports in a city that is not the one where they are registered with their official ‘hukuo’. This is seen as removing a hurdle for travel abroad and should positively impact outbound travel.

And in April a new Chinese Tourism Law was passed, which for the first time drafts a policy for domestic, inbound and outbound tourism products. This came into effect on October 1 and is aimed at improving the quality of services offered by Chinese tour operators, including banning extremely low-cost tours and forced shopping. “Effects on destinations with a high level of package groups from China could be noticeable,” the COMI report states.

Challenges remain

While developments within China signal the ongoing strength of the travel industry in the country, visas and air access continue to be stumbling blocks for many destinations seeking to grow their Chinese arrivals.

The Schengen states, the US and the UK are among the countries trying to make their visa regimes less cumbersome, and COTI forecasts there will be a wave of countries opening their doors to Chinese tourists this year. “Within the forthcoming 12 months, an easing of visa regulations for Chinese visitors can be expected around the globe,” it states.

Changing times

Many Chinese tourists have embarked on a number of international trips within Asia and beyond, and these more experienced travellers are changing the stereotypical image of a Chinese tourist.

While most Chinese tourists still go on organised package tours, more experienced tourists are steadily moving towards independent travel. This is impacting not only the type of travel product on offer, but also the type of destination and when Chinese tourists choose to travel, with more taking trips outside traditional holiday periods. “Considerable increases in bookings for group travel as well as for self-organised trips reflect the trend to arrange more than one journey per year outside the busy holiday periods of the Golden Weeks, both for domestic and international travels,” the report states.

According to the report, the share in self-organised travel will increase in the next 12 months, with rough estimations suggesting about a third of outbound Chinese travel is self-organised. “Travel agencies increasingly offer more quasi-individual tour products, allowing the participants to spend some days organised as a group, combined with several days to fill up independently,” the report states.

It adds that Chinese tourists will continue to shift their holiday preference from sightseeing to activities, with a growing desire to “seek out pristine, outdoor destinations that offer greenery and open spaces, which are increasingly rare in China’s over-populated, industrial cities,” it says.

Getting social

Social media is proving to be a huge driver of travel for Chinese consumers. Most Chinese travellers are below the age of 44, making social media the ideal channel for travel brands to reach young, upwardly mobile and tech-savvy consumers. According to the report, Sina Weibo has more than 536 million users and its main competitor Tencent is China’s fastest growing social media channel, with more than 400 million users. Social media channels entirely dedicated to travel are also growing, such as, which generates an average of 200,000 users monthly and is seen as an important travel influencer.

According to the report, Shen Wei is a “famous young frequent traveller and is a key influencer among younger travellers and has several hundreds of thousands of fans following his everyday moves and comments online. In March 2013 Shen Wei went on a 12-day tour through Canada, posting pictures on Weibo as he went. Following this social media campaign, organizer CTrip is developing tour packages which emulate his journey.”

Meanwhile, McKinsey has identified a new generation of Chinese consumers called Generation-2. These upper-middle class youngsters who were born in the mid-1980s will become the main engine of consumer spending in the next 10 years and are already the main group for mass tourism in China, according to the consultancy.

The outlook for 2014

Despite a slowing economy, demand for travel abroad will grow in Mainland China in the next 12 months. “The basic travel motivations remain in place: relaxation and visiting other Chinese-dominated regions and countries within South East Asia, gaining prestige, self-esteem and knowledge for travels to long distance destinations.”

It adds that destinations that have already eased their visa regimes will grow their share of Chinese visitors, and with Chinese outbound travel expected to grow by 17% until the middle of 2014, spending on international travel by Chinese consumers will reach US$129 billion between July 2013 and June 2014 – making it a lucrative market for all destinations to tap into.

This article was reproduced and edited from an original story that appeared on our sister publication Routes News. The latest bumper World Routes edition of the official air service development magazine is available in your delegate bags or can be read online by clicking here.

Richard Maslen

Richard Maslen has travelled across the globe to report on developments in the aviation sector as airlines and airports have continued to evolve and…