Spotlight on: the unstoppable rise of Chinese tourism

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The inexorable rise of Chinese tourism continues to be felt in the global travel industry, with outbound tourism enjoying explosive growth in recent years. Click. examines the impact and what lies ahead

Here are some statistics to give you pause for thought. According to the United Nations World Tourism Organisation, China’s outbound tourism expenditure reached $261bn in 2016, an amount not only more than double that of any other country but a tenfold increase on the same figure from 2006. On a similarly gargantuan note, the CEO of Chinese travel agency Ctrip announced in September 2017 that international trips made by Chinese travellers had now created – directly and indirectly – up to 100 million jobs worldwide.

The figure that really puts the situation into context, however, is this: as of 2016, fewer than 9% of China’s population were in possession of a passport. The growth in outbound Chinese tourism over recent decades (around 8.2 million international travellers in 1997, compared to an estimated 140 million-plus outbound trips from Mainland China in 2017) has had a profound impact on the global travel industry – yet in some ways it’s barely got started.

The country has become the driving force for the growth of the global travel and tourism industry - David Axiotis, ITB China

There are clear reasons for the dramatic upturn of the last 20 years. One is the Chinese government’s Approved Destination Status policy, which through bilateral agreements determines the countries that groups of Chinese leisure tourists can visit. It has grown from encompassing a handful of Southeast Asian destinations in the early 1990s to a list that now contains well in excess of 120 sovereign states worldwide. The well-documented surge of Chinese tourists to Europe tells just part of the story.

“China is also the number one source market for Thailand, Japan, Korea, Vietnam, Cambodia, the Maldives, Indonesia and the Democratic People’s Republic of Korea,” says David Axiotis, General Manager of new Shanghai trade show ITB China. “The country has become the driving force for the growth of the global travel and tourism industry.”

Loosening economy

In broad terms, since the loosening of the nation’s economy in the latter part of the 20th century, there are far more Chinese people who can not only afford to travel, but who have the means to be cash-happy while they’re away. “They’re normally from better-off economic backgrounds,” says Dr Jieyu Liu, Deputy Director of the research centre SOAS China Institute. “Their ability to spend is considerable.”

It means that in many places, Chinese tourists have become synonymous with shopping for high-end goods – in part because the same luxury brands tend to cost more in China. It’s been estimated that more than half of all Chinese visitors to the UK visit the designer stores of Bicester Village, an hour outside of London, while the likes of Fidenza Village near Milan and La Vallee near Paris are similarly well attuned to large numbers of Chinese visitors. All, for example, have certain outlets that accept Alipay, the Chinese online payment platform.

To see Chinese tourists first and foremost as sightseeing shoppers, however, would be short-sighted. A Financial Times Confidential Research survey from 2017 showed that the trend is slowing. Shopping now represents some 37% of average trip expenditure, compared to 47% in 2013, while spending on accommodation, entertainment and meals increased from 31% to 44% over the same period.

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These figures can partly be put down to the growing choice of branded goods in China itself, but they also show the obvious (though often overlooked) fact that as the number of Chinese tourists continues to increase, so too do the diversity, tastes, budgets and preferences of the individual travellers – particularly among those now accustomed to overseas trips.

“The main point is that the Chinese outbound market is not uniform,” says Professor Dr Wolfgang Arlt, Director of the Hamburg-based China Outbound Tourism Research Institute (COTRI). “Many travellers are tiring of meeting mostly their fellow countrymen when they’re travelling overseas. The more experienced are moving more towards immersion and deep, but short, experiences, instead of sightseeing and shopping, while of course there are still millions of newcomers who are happy to do eight European countries in seven days, for example, and for whom shopping is still important.”

Domestic tourism evolution

The past two decades haven’t just altered the face of China’s outbound tourism sector. In terms of its inbound and domestic tourism, the country has also evolved considerably. The classic sights – the likes of Beijing’s Great Wall, Shanghai’s Bund and Xian’s Terracotta Warriors – remain hugely popular, but China’s wider attractions, of which there are an extraordinary number, now enjoy a greater share of the limelight.

“As China has opened up further, off-the-beaten-track regions have become more accessible,” says Jonathan Wilson, Global Product Director of tour operator Wendy Wu Tours. The SOAS China Institute’s Dr Liu, meanwhile, points out that today’s visitor infrastructure in China is infinitely better than it’s ever been, in terms of facilities, technology, staff training and transport. “There are places that used to take two days to travel between in my parents’ generation, which now take only three hours because of high-speed trains,” she says.

She explains that many domestic Chinese tourists are now looking more at travelling to the western part of the country, rather than the more established east. “And at the same time, a lot of young middle-class professionals basically don’t have any cash on them anymore. You can do everything by WeChat Pay or AliPay,” adds Dr Liu.

But the greatest effects on the industry, of course, will continue to be felt in outbound terms. “By 2030 more than 400 million outbound trips will originate in Mainland China, most of them going beyond Greater China,” says COTRI’s Professor Dr Arlt. “That’s 250 million more than 2017.”

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It’s estimated that more than 140 million outbound trips were made last year from Mainland China
As of 2016, fewer than 9% of China’s population had a passport
Experienced Chinese travellers are moving away from sightseeing and shopping
Technology and infrastructure are helping China’s domestic tourism sector to evolve