China Seminar April 2016
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1 China Seminar April 2016 Per Holte
2 China outbound market overview 2
3 Outbound Arrivals (Million Person-times) 28,85 22,98 91,96 98, Total Visitors For Private Purpose In 2013, Chinese outbound arrivals reached million person-times, 18% more than million person-times are for private purpose, 19.35% yoy increase. The latest statistics by CNTA on 28 Aug 2015 shows that Chinese outbound arrivals exceeded 100 million persontimes in a calendar year for the first time in 2014 with total 107 million person times. It is predicted to fulfill a 16% increase in (Source: China National Tourism Administration) 3
4 Destinations of Chinese Outbound Tourists 2013 (Source: China Tourism Academy) Asia was still the main outbound destination. The share of total tourist arrivals to Europe and America slightly declined. The number increased significantly for African countries. 4
5 Top 10 Destinations Outside Asia % 20 19,67 45,1% 40% 15 30% 10 14,2% 20% 5 3,02 10% 0 0% (Source: CNTA) 100,000 person-times YoY USA was still the main destination country outside Asia, with 14.2% YoY growth. Maldives received 302,400 person-times arrivals, a 45.1% YoY increase. 5
6 Chinese nights in Scandinavia 2015 Denmark Norway Sweden 198,038 (+23%) 287,153 (+62%) 261,476 (+28%) 6
7 Consumption of Chinese Tourists in Overseas (Source: World Tourism Cities Federation) Over half of the tourists (57.76%) interviewed by WTCF in June 2014 spent their travel budget on shopping. Their preference to buy luxury goods abroad is mainly ascribed to the price gap between domestic and overseas markets. 7
8 Per Capita Spending of Chinese Outbound Tourists (Source: WTCF) Overseas spending of independent tourists ranks the first, followed by semi-independent and group tourists. The per capital overall spending of Chinese outbound tourists is around 19,871 CNY (eq USD or NOK). 8
9 Chinese Outbound Tourism Consumption ( ) 128,652 (Source: CTA) In 2013, Chinese outbound tourism consumption continued to thrive, jumped 26.8% from 102 billion USD in 2012 to 128 billion USD. Chinese tourists purchased 23% and 10% of luxury goods in Europe and US respectively. Latest report by WTCF on 7 th Sep 2015, Chinese outbound tourism consumption reached 165 billon USD
10 Who are they? Where are they from? What are they attractive to? 10
11 The gender gap among Chinese outbound tourists is relatively small % Chinese outbound tourists are the post-80s. Given the characteristics of family life cycle of the post-80s and the one-child status, parents focus more on their children s growth. Thus family tours with minor children have featured in Chinese outbound tourism as a way to broaden their horizons. (Source: WTCF) 11
12 Source Markets of Chinese Outbound Tourists ( ) (Source: WTCF) Mega cities Beijing, Shanghai and the economic hub Guangdong province are the main source markets. Coastal provinces Jiangshu and Zhengjiang are the 2nd tier markets. Sichuan, Hubei, Shandong and Liaoning provinces are the emerging markets with great potential. 12
13 Tourists in group travel mainly for sightseeing, while F.I.T travelers for relaxation and shopping purposes. Tourists with lower monthly incomes are more attracted to affordable cost. Breathtaking landscapes, history, unique cultures, cozy environment, landmark buildings and renown museums of Europe and US are particular attractive to Chinese tourists. (Source: WTCF) 13
14 How to reach them? 14
15 Source of Outbound Travel Information in 2014 (Source: WTCF) Top two channels of information preferred by Chinese outbound tourists are tourism websites in China and travel agencies retails and websites Group tourists mainly obtain information from travel agencies; F.I.T travelers prefer information from tourism websites in China; offical websites of destinations/tourists boards and WOM. 15
16 Source of Outbound Travel Information in Selected Cities 2013 (Source: WTCF) Beijing and Chongqing tourists paid more attention to the Internet and social media. Shanghai and Chengdu tourists relied more on the WOM. Over half of tourists in selected cities obtained outbound travel information from travel agencies. 16
17 China Social Media Impact Report 2015 by Kantar WeChat replaces QQzone, becoming the most popular social medium in China. 12% Netizens use Weibo as source of travel information. STB China has a Sina Weibo account with 171,499 followers by 9 th Sep We also run 3 Wechat accounts for STB China, VisitDenmark and VisitNorway respectively. By 9 th Sep 2015, the STB China Wechat account has 12,212 followers, VisitDenmark Wechat has 5,288 followers and the number of followers on VisitNorway Wechat are 6,092 followers. 17
18 The most awesome resign letter ever! World is so big, I want to see it. This resign letter of a Chinese middle school teacher from a 2 nd tier city of China created a virus on Chinese social media early People admire her courage, life values and respect her choice. Doesn't she speak for the majority of Chinese people today? In the 21 st century people of the Middle Kingdom become open-minded, self-confident and curious about what is going on out there in the world. 18
19 As the world's second-largest economy, China GDP experienced 7.67% growth in 2013 and is estimated to reach 7.4% in 2014 and 7.2 % in After 35 years ( ) of average annual growth close to 10%, a new normal of China's economy has emerged with several notable features: The economy has shifted gear from the previous high speed to a medium-to-high speed growth. The economic structure is constantly improved and upgraded. The economy is increasingly driven by innovation, domestic consumption instead of input, investment and exportation. 19
20 <<China Tourism White Paper>> (State Council of PRC 2014) ADS Visa-exempt 116 destinations 81 countries Unilateral visa-exempt 6 destinations Visa-on-arrival 35 countries (Source: CTA) (Source: To stimulate domestic consumption, the State Council of PRC published a << Tourism Whitepaper >> in 2014 aimed at achieving an average of 4.5 person-time visits, and the contribution of tourism added value to exceed 5% of GDP by A series of actions were taken in 2014 by the government to boost the sustainable development of tourism. 1 Reinforcing the implementation of paid holiday stipulated by the Labor Law of China. 2 Unleashing the tourism consumption potential of the elderly and students in next 10 years. 3 Signed bilateral visa exemptions or agreements to simply visa application for Chinese tourists. 20
21 Key Trends of China Outbound Tourism Market Giving the uncertainty of global economy, there will be more destination countries to streamline their visa application process to attract Chinese tourists, which will stimulate the outbound tourism of China but results in furious competition among destination countries. The appreciation of the CNY will also help China outbound tourism sustain a rapid growth. Along with economic development in the 2nd and 3rd cities of China, group tours will continue to be the volume generator of the market. Online travel services are emerging with penetration rate increasing every year. In 2013, China s online travel revenue reached 2,850 billion CNY (incl. inbound, domestic and outbound). The market is growing more rapidly than the overall tourism industry. With growth in number of experienced tourists and development of OTAs in China, the market will change as a result of the notable increase in the number of FIT tourists. However, the main volume of Chinese tourist arrivals to Europe will still be in groups. There is an obvious market need for personalized and tailor-made products. Experiential and authentic traveling is gaining its momentum. The outbound tourism market of China has witnessed more independent and engaging travelers. In general, the market will remain fragmented over a period of time and consumer needs will become even more diversified for different products, quality of services and various destinations. (Source: CTA, WTCF) 21
22 Scandinavian Tourist Board (STB) China is a joint initiative by the national tourist boards of Denmark and Norway with the mission of promoting tourism of Denmark and Norway in greater China. Our Main Activities in China incl. For travel trade partners in Norway Providing market intelligence via primary and secondary researches Localizing marketing communications Organizing workshops in greater China Facilitating cooperation with Chinese travel trade For Chinese travel trade partners Conducting destination educational programs such as FAM tours, in-house and online training Encouraging and assisting product innovation Facilitating business growth via joint marketing for instance co-op advertising, b2c event, POS and street activates Providing marketing content incl. images, videos and copywriting of destinations Updating travel trade news of Denmark via monthly newsletter For Chinese consumers Maintaining destination information on B2C website ( Carrying out online, offline and social media campaigns incl. co-branding with non-travel trade organizations. Establishing and maintaining strategic cooperation with media Organizing inspection tours for press and SNSs Exhibiting at travel fairs For other stakeholders Maintaining good relation and providing necessary information and assistance 22
23 Norway s position & current market situation 23
24 Asian overnights in the Nordic countries
25 Asian nights in the Nordic region JAN & FEB
26 . The appreciation of the CNY is stimulating outbound tourism Market situation faces a challenge due to the new biometric visa processing (introduced 15OCT15) EU agreement signed last month regarding 11 new visa centers in China; 5 already in operation (Norway not included) Possible visa solution for Norway Bilateral situation not improving 26
27 . New air route STO-HKG by SAS New charters by Utour and Caissa Online booking of FITs are constantly increasing, but the bulk of Chinese arrivals in Europe will still be dominated by groups in the near future Diversification in consumer demand will continue, necessitating the need innovation inproduct development and quality Norway s long-term strategy for the market 27
28 Thank you! 28
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