world travel ceo forum oct07

investing in China’s tourism investing in China’s tourism futurefuture

中国旅游业发展咨询有限公司中国旅游业发展咨询有限公司

World Travel CEO Forum 2007World Travel CEO Forum 2007

The growth of Chinese travel and tourism: how will it impact the global tourism industry?

• Origins and growth trends in Chinese tourism

• The impact of Chinese tourism on domestic and regional economies

• How hard is it for foreign travel companies to succeed in China?

• Opportunities for western companies in China's tourism sector

• What the future holds for China's tourism sector?

8 October 2007


About the speaker

• Expertise on China business and culture as well as speaking fluent Chinese.

• Lived in China's two commercial power houses, Beijing and Shanghai and travelled extensively to China's major cities, forging good personal relationships with key private industry leaders and public officials.

• Served as China Director of E-commerce for Gullivers Travel Associates, overseeing all aspects of the company's electronic product distribution in China.

• Planned and executed a high level three-day conference on modern tourism trends titled 'The Future of Travel is Here', co-hosted by Beijing Municipal Tourism Board.

Returning to Europe in 2005, Roy founded ChinaContact to assist tourism companies, travel providers and tourism promotion bodies eager to discover the tremendous potential of China as both market and destination.


Chinese Outbound Travel

China outbound tourism will greatly impact the international tourism industry by 2020, accounting

for the single largest source of international tourism. Each and every tourism organisation and company needs to formulate a China strategy and

prepare the ground work now.


Challenges: The ‘Open Door’ myth

• China has announced an Open Door policy. However, in the

service sector…

– The government puts barriers to foreign competition to

protect local business.

– Business relations are based on trust and friendship built

over time.

– Chinese travel agents are largely ignorant of long haul

destinations, therefore are weary of promoting new

products. 門


Popular destinations (ADS)

• Most popular destinations for Chinese

– Reasons: politics, time, cost, cultural affinity, language, food

Hong Kong, Macau, Japan, Korea, Thailand, Vietnam, Russia, USA, Singapore, Australia, Malaysia

France, Switzerland, USA, UK, Australia, Germany, Canada, Italy

• Top aspirational destinations

– Reasons: status, novelty, culture, business needs, shopping


Size of outbound market

YEAR DEPARTURES Approved Destination Status

1995 4,520,000 Hong Kong/Macau

1996 5,060,000

1997 5,323,900

1998 8,425,600

1999 9,232,400 Australia / New Zealand

2000 10,472,600 Japan / ASEAN

2001 12,000,000

20022003200420052006

16,600,00020,220,00028,850,00031,000,00034,000,000

Turkey / EgyptGermany / South Africa

EU / AfricaUK / Russia / South America

Caribbean / Mongolia


Statistical overview

Chinese Outbound Travel Destinations(2005)

Zhang Qing/Byecity.com

2006:

34 million outbound travellers

Market Value:

17 Billion Dollars

2007 projected:

Over 37.4 million


The nature of the Chinese outbound traveller

• Middle and high income city dwellers

• White collar annual income: USD $25k on average

• Established pattern of business trips combined with leisure

holidays

• Increased awareness of luxury destinations

• Desire to ‘outclass’ others

• Prefer convenience and access to range of activities一


Group package versus Independent travel

• Chinese prefer group travel

– Familiarity

– Culture

– better (perceived) value

– Habit of past experience

上


Group package versus Independent travel

• A shift to Independent travel

– Negative experience

– Growing affluence

– Status symbol

– Better access to information

– Self confidence

– Changing attitudes and lifestyle 下


Business or Leisure?

• Business

– Paid by company/bureau

– Predominantly company of

male colleagues

– Convenience and time

– Concentrated shopping

– Appreciate flexibility and

attention to time management

• Leisure

– Self financed

– Small groups of friends or

family members

– More flexibility and interest in

attractions

– Allocate more time for

shopping.

Most high spending still driven by business and delegations


Satisfying a Chinese client

• Attention to personal details

• Understanding of cultural sensitivities

• Knowing your Hans from your Hui

• Knowing of regional differences

• Being flexible - adaptable to changes in plan

• Chinese language information

• Exceeding expectations


Market entry steps

• Review and audit your services

• Adjust and prepare suitable products

• Localise your information

• Launch and promote through the trade

• Build relationships over time

• Follow through on promises


Chinese Inbound and domestic Travel


Overview of China’s inbound tourism

• Has been growing at 19.9% a year on average since 1990.

• Will receive 129 million inbound visitors from overseas in

2007, five million more than 2006.

• 22 million visitors in 2006 excluding Taiwan, HKG, Macau.

• Tourism boosted by world class events (2008 Beijing

Olympics, 2010 World Expo, Formula 1 racing, Tennis,

Summer Davos)


Photograph by very kind permission of Mr Li, Cultural Heritage Management Officer, Matisi Scenic Area Administration Office

Foothills of the Qilianshan, western Gansu


Overview of China’s domestic tourism

• China has 12,930 star-rated hotels

• International hotel chains are expanding fast in China

• Domestic tourists are projected to take 1.5 billion trips

across the country, up eight percent in 2007.

• Spend US $250 billion on developing its railway network by

2020.

• $17.4 billion between 2006 and 2010 for airport

development.


Influences on inbound tourism

• Leading up to 2008 Beijing Olympics and 2010 Shanghai World Expo,

China will receive unprecedented media attention – double edged sword

• The 2008 Beijing Olympics will show more faces of China to an

international public previously not aware of China's tourism resources.

• China will become a popular destination for incentives, conference,

meetings, sports and business.

• 2010 World Expo in Shanghai will attract large numbers of short-haul

visitors from Asia and enhance China's image internationally.


Differences in tourist behaviour

Chinese domestic tourist market is

different:

• Prefer to spend time in crowded places

with large groups

• Seek comfort and convenience above

exotic experiences

• Less educated about the impact of tourism

on destinations


Thanks to Silk Road hotels


Examples of tourism culture differences


Future Trends for China

• South East Asia will grow as a market for luxury travel and short

breaks

– golf, sailing, gaming, shopping (short excursions)

• Europe will become fashionable as a cultural attraction

• USA/Canada will become most popular destination when visa

restrictions are eased.

• China will become the world’s number one inbound tourist

destination by 2014 according to UN-WTO.

http://www.cnto.org/chinastats.asp#Stats


China Travel Industry blogChina Travel Industry blog

14 November 2007, World Travel Market, 14 November 2007, World Travel Market, Excel, LondonExcel, London

• The only international event outside of China designed to unlock the mystery of doing business with China’s tourism sector.

• Full day of forums and interactive workshops for effective communication, sales and marketing methods and understanding how to navigate the market.

Forum on China’s tourism industryForum on China’s tourism industry


The China Outbound Travel Handbook

“an excellent introduction to an amazingly complex market... relevant to every sector of the tourism business... contains lots of tips and practical advice for suppliers and is written in a down-to-earth style, with a minimum of meaningless statistics...”

BBT Online, Belgium


Contact Us:

Roy GraffLondon, UKEmail: [email protected] [email protected] Tel: +44 20 78719886 Mobile: +44 7821

093199

www.chinacontact.org

http://chinacontacttourism.ning.com/http://chinacontacttourism.ning.com/

Consultancy service:Consultancy service: • market access, marketing strategy, public relations, deal brokering

Localisation:Localisation: • tourism marketing materials, websites, press releases

Event management:Event management: • exhibitions, product launches, trade fairs, business trips

Representation:Representation: • local sales and marketing representatives

North America: New YorkEmail: [email protected]

South East Asia: SingaporeEmail: [email protected]