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Nine Important Developments In China's Outbound Tourism 2013

Jan 1 2014, 5:46pm CST | by

In the year that just ended, China has consolidated its position as the No.1 global tourism source market in terms of both number of travels and money spent on international travel. There have at...

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30 weeks ago

Nine Important Developments In China's Outbound Tourism 2013

Jan 1 2014, 5:46pm CST | by

In the year that just ended, China has consolidated its position as the No.1 global tourism source market in terms of both number of travels and money spent on international travel. There have at the same time been further profound changes in the framework of outbound travel from Mainland China and in the behaviour of the travellers themselves.

Here is a look back at nine important developments in China’s outbound tourism in the year 2013:

1.       Quantitative growth

2.       New push factor pollution

3.       New push factor overcrowding

4.       Encouragement by new Chinese Government

5.       Visa policy dominos starting to fall

6.       Move towards more self-organised trips

7.       Move towards new destinations

8.       Chinese investors shopping spree

9.       Major players enter the scene

1. Quantitative growth continued in 2013. With more than 72 million border crossings reported for the first nine months of 2013 alone, the total number will probably land somewhere between the 95 million my institute COTRI forecasted at the beginning of 2013 and the 98 million CTA (China Tourism Academy) recently predicted. Spending will have jumped to more than 120 billion US$, high above the 80something billion US$ spent by Germans and US-Americans respectively. Chinese statistics stay however as opaque as ever, who and what exactly is included or excluded in these numbers remains a secret. In any way the importance of the Chinese source market for an increasing number of destinations is not to be doubted, even if you allow some margin of error in the numbers.

2. Pollution has been worsening for many years in China, but 2013 moved air pollution from the level of irritating to the level of plainly unbearable. Particulate matter intensities never seen before on this planet are no longer just a problem of Northeast and North China, in recent months East and South China also suffered heavily. In October, in Harbin the police officially declared not to fine motorists for crossing a red light as the traffic lights could not be seen anymore in the smog, in December Shanghai and Xian reported health-threatening air for days on end. In Hong Kong big poster show the Hong Kong island skyline in the sun, they had to be erected on the Kowloon side to give Mainland visitors a background for the obligatory photo which on most days of the year is no longer possible to have, the real skyline across the harbour being barely perceptible. Together with food scandals and other environmental problems, pollution has developed into a major push factor, driving former domestic tourists out of their country whenever they can afford it.

3. A second new push factor concerns overcrowding. The October 2013 Golden Week of collective holidays was even by the official Chinese media criticised as a “Golden Mess”. The railway system alone had to carry 70 million people around the country in a single week. Ignoring regulations in the new tourism law, many sights, including the Forbidden City in Beijing, sold much more ticket than there carrying capacity should allow them, highways turned into giant parking lots. Even outside this period of travel madness, natural and man-made attractions suffer from overcrowding, again pushing Chinese tourists more and more to destinations beyond the border – in some cases however only to meet the same Chinese crowds in Phuket or on Jeju Island.

4. The Chinese government policy changed dramatically in 2013, with the new leadership for the first time explicitly supporting Chinese outbound tourism in front of international audiences. The new tourism law, which came into effect on October 1st, further changed the rules of the game by trying to end the worst practices of subsidising below-cost package tour offers with income from forced shopping and poor quality services. In many destinations the number of package tour arrivals fell in the last quarter of 2013 as a result, with longer staying individual visitors making up most of the losses. New Zealand for instance suffered in October and November 2013, as arrival numbers dropped by 12% and 16% YoY respectively, with short-stay holiday group visas down by 41 per cent. However, long-stay group holiday visas were up 14 per cent and individual visitor visas up by 70 per cent.

5. For a long time security concerns triumphed over the demands of the tourism industry in lowering the barriers of entry for Chinese visitors. 2013 witnessed the first dominos falling with some destinations like the holiday island republics Maldives, Seychelles and Mauritius entering into visa waiver agreements with China, Thailand followed in the last days of the year. About 40 countries and regions mostly in Africa and South-East Asia offer already visa on arrival for Chinese, bigger countries including UK and Germany started to differentiate between regular visitors and first-time visa applicants or to issue residence permits for investors. .  

6. Off-the-shelf package tours became decisively unfashionable in 2013, with self-organised trips or customised tours organised by tour operators gained ground. Depending on definition and the kind of destination, on average about a third of the market is no longer hostage to the tour operator and the tour guide. Many of the package tour members moreover feel bad about doing the less prestigious thing, another change accelerating in the last year.

7. Exotic location gain popularity, for instance Nepal recorded already for 2012 71,861 Chinese tourist arrival, among whom 64,275, almost 90%, were first time visitors. This trend is witnessed not only by countries less in the limelight of Chinese travel but also by smaller cities within popular destination countries. To gain prestige, a trip to Phuket or to Paris is not enough anymore among more experienced travellers.

8. If outbound travel can be seen as an investment in personal self-esteem and social capital within the peer group, Chinese investors take the term more and more literally. Solid numbers are hard to come by, but buying they do. 2013 certainly witnessed the highest ever level of Chinese outbound investment into real estate, including tourism infrastructure. The case of the billionaire tea trader Lam Kok (Hao Lin), who crashed just before Christmas together with his son in a helicopter accident in France on the day of celebrating the 40 million US$ acquisition of a 16th century Bordeaux chateau and vineyard, brought the activities of Chinese investors to the attention of the world press. The chateau was supposed to be turned into a resort offering the best wines and teas in the world.

9. 2013 finally witnessed the entry of many major players who had been watching the market before. International hotel groups, cruise ship companies, credit card issuers and other companies which are traditionally not directly involved in providing tourism services all started to take serious money into their hands to create “China-centric” offers for Chinese overseas travellers, many of which will see the light of the day in 2014. Chinese companies were not to be left behind, with UnionPay credit cards starting to push into the market beyond the traditional shops frequented by Chinese tourists and Maotai liquor acquired a distribution network in Europe for the pronounced purpose of selling not to European customers but to the Chinese on the move abroad.

What to expect for 2014? See my next post!

Source: Forbes Business

 
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