Make hay from the second wave
Updated: 2011-12-02 11:05
By Wolfgang Georg Arlt (China Daily European Edition)
New Chinese tourists offer rich pickings for destinations and service providers off the beaten track
Outbound tourism in China is entering its second phase, and bringing with it new opportunities and challenges for global tourism service providers.
More and more Chinese are now looking for travel experiences beyond the ticking off of major sights and the dubious pleasures of forced shopping. With a correctly adapted product and the right kind of marketing, locations off the beaten track can become popular among affluent visitors from China.
In line with its impressive economic growth, China has developed into the biggest Asian outbound tourism source market. Within a dozen years, the annual number of border crossings has grown sevenfold, from less than 10 million in 1999 to probably close to 70 million in 2011. Chinese tourists can now get group visas for almost any country across the world, while the hurdles for individual tourism visas have also been lowered.
Today, traveling internationally is an important element of the accumulation of "social capital" in China's new consumer society. Have money - will travel.
Chinese have been traveling within their own country for many centuries for pleasure, crisscrossing the country as officials, traders, poets, pilgrims, nature seekers or refugees. Outbound travel, however, was not part of that tradition.
In the 20th century, turmoil and wars in the first half and a policy of self-reliance and frugality during the bigger part of the second half prevented the development of outbound travel for any reason other than emigration. Even after the start of the opening up and reform policy in 1978, less than 1 percent of the population annually had a chance to fulfill their wish to see the outside world.
The first decade of the new millennium has witnessed, in stark contrast to earlier times, a rampant growth of outbound travel. About 70 percent of all outbound trips from China only happened within the last six years.
When global tourism contracted due to the economic crisis in 2009, China's outbound tourism still managed to rise by 4 percent, bouncing back to 20 percent growth rates in 2010, both in number of travelers and in terms of spending. Today, Chinese travelers spend more than $10 billion annually while traveling abroad, more than the total income from foreign inbound visitors to China.
China is already the biggest domestic tourism market in the world by number of trips, and the Chinese Outbound Tourism Research Institute projects that the China outbound market will account for 10 percent of the global international tourism market within the decade, propelling it to the top of global tourism source markets before 2020.
Chinese tourists have turned into a major target group for destination marketing organizations and tourism companies in major destinations around the world. They have had to learn that Chinese group tourists have their own distinct expectations and needs, and that success in the Chinese outbound market requires careful product adaptation and new forms of marketing.
But despite the efforts, previously 90 percent of Chinese travelers stayed within Asia and even those who traveled further concentrated on the most famous sights in the most famous cities in major destinations. Luxury brand retailers in San Francisco, Paris and Johannesburg had reason to smile, but for destinations and companies not located on the beaten track, the much-hyped deluge of Chinese tourists has, until now, been little more than a mirage.
With the start of the second wave of China's outbound tourism, all this is changing. The "New Chinese Tourists", knowledgeable, sophisticated, travel-savvy and predominantly below 45 years of age, are entering the scene. New Chinese tourists look for deeper experiences and closer contact with local host populations during their self-organized trips.
Earlier they took photos of themselves in front of the Sydney Opera House or the Eiffel Tower, but are now drawn more to new places and activities. Freed of the commission-driven tour guide, they will purchase more goods for themselves and fewer for their friends and relatives back home, as their peers are more likely to travel internationally as well.
New Chinese tourists offer an increased chance for destinations and tourism service providers off the beaten track to get a piece of the Chinese outbound market. They will have to make sure that their product is adapted to the special needs and expectations of this new kind of Chinese guest, that their staff are prepared to welcome global yet patriotic travelers and that they make their travel product attractive and prestigious to the customers through social media and other forms of "WOM squared" (word of mouth and word of mouse) communication.
The author is the founder and director of the China Outbound Tourism Research Institute, based in Heide, Germany, and Beijing.