Keeping pace with changes in China’s outbound tourism market

Insight from the World Routes Tourism Summit in Chengdu, China.

“China keeps changing,” said Professor Dr Wolfgang Arlt, director, COTRI, China Outbound Tourism Research Institute at the World Routes Tourism Summit in Chengdu, China. “However, still almost all Chinese travellers are money rich, but time poor”. What this offers is a great opportunity for destinations looking to secure a piece of the fast expanding China international outbound market.

“’The’ Chinese tourist does not exist anymore, said Dr Arlt.”The mass-market package tours frantically rushing around ticking off main sights with a selfie are still existing with 100+ million Chinese still waiting for their first trip abroad. However, the interest of many more experienced Chinese tourists are changing, after the first phase of sightseeing tours they now look for experiences and immersion during customised or self-organised trips.”

The destinations visited by Chinese outbound travellers are also changing from “must-see” destinations to discovering new places, from national capitals to other cities, regions and landscapes including beaches, national parks and the ocean.

Instead of postcard confirmation the more experienced travellers look for “authenticity”, says Dr Arlt, following their own interests to visit football stadiums, medieval city centres, natural spaces, museums, wineries or ski slopes rather than just the top sights.

It is same with shopping, notes Dr Arlt, and famous but oversold brands like Louis Vuitton are no longer valued by Chinese travelling customers, with smaller lifestyle-orientated brands, variety and regional products gaining in importance.

China is clearly changing global tourism and since 2012 it is the biggest international tourism source market both in terms of border crossings and in terms of spending. In 2016 up to 140 million border crossings from Mainland China will take place and more than $220 billion will be spent by Chinese travellers. In 2016 for the first time less than half of the international trips will end in the traditional Greater China markets of Hong Kong, Macau and Taiwan.

China continues to be the biggest international tourism outbound source market, but for the first half of 2016 the growth rate for the first time dropped below double-digit figures to 3.4%, but this drop can be mainly attributed to a fall in demand to the SARs since summer 2015. This loss was more than compensated for by growth into Japan, South Korea and Thailand during the first half of this year.

This diversification can be explained by changing Chinese traveller demographics. From a majority of middle-aged travellers in the first wave of Chinese outbound tourism, now persons born after 1980 (balinghous) and even after 1990 (jiulinghous) make up almost 60% of all Chinese international travellers.

“Demographics are also becoming more diverse: The first cohorts of affluent 60+ citizens are entering the market, more children (linglinghous) accompany their parents or go on school trips,” said Dr Arlt.

Average life expectancy for a person living in China 1960 was just 43 years, but has risen now to 76 years. “More than 200 million Chinese citizens are aged 60 and over,” said Dr Arlt. “Some of them also have enough money – or children with enough money – to take part in outbound tourism.” Outbound data shows a constant growth rate for this market since 2013 of more than 50% year-on-year.

Dr Arlt believes that with secondary destinations now competing for a greater share of Chinese arrivals especially among repeat visitors in the wake of the new opportunities provided by multiple-entry visa, there are strong opportunities for network development.

“Direct flights from China are often seen as the panacea, overlooking that not all Chinese live in China and most Chinese outbound travellers visit multiple countries during one trip,” he said. “Direct connections are an important ingredient, but not the only one. Swiss arrivals numbers are falling despite direct flights, Latvian arrival numbers have risen without direct flight connections.”

It is clear that airports can play an increasingly important role in Chinese outbound tourism as gateways to a region. “With the second wave of Chinese travellers slowing down, a gateway with convenient air connection and airport services, plus a close coordination with the regional tourism service providers and attractions can establish new places on the mental map of Chinese tourists. As an example think not ‘Manchester’ but ‘Northern England’,” he said.

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