How to Develop Tourism Offers for the Chinese market. Mr. Zhu Shanzhong Executive Director, UNWTO

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1 How to Develop Tourism Offers for the Chinese market Mr. Zhu Shanzhong Executive Director, UNWTO

2 A Brief Outlook of Chinese Outbound Market Chinese outbound market: starts late, grows fast, stays active Outbound visits from China Time of growth Time span 20 million + 17 years million 7 years million 5 years million 1 year million 1 year 2014 (Source: CNTA)

3 China s outbound market contributes a 19.62% of world tourism growth, in other words, almost 20% of growth in international tourism is generated in China. Example of destination that benefits from Chinese market In 2012, Chinese travelers spent 8.8 billion US dollars in the United States of America, ranking the 6 th among all inbound tourists of USA. 8.8 billion USD makes 5% of USA s exports in tourism services. In general, this 8.8 billion USD creates a 6.38% of USA s direct and indirect employment. (Source: China Tourism Academy, 2014 China Outbound Tourism Report )

4 1. Where are Chinese tourists going? Chinese tourists like places nearby, but they are traveling further. Chinese Hong Kong Chinese Macau Europe Korea Thailand Chinese Taiwan USA Japan Vietnam Cambodia Malaysia Singapore Russia Indonesia Australia Canada (Source: CNTA, 2013 China Tourism Statistical Bulletin)

5 2. How to describe Chinese tourists? Two most important age groups in tourism: Chinese citizens born in late 1940s and early 1950s already retired. Young generations regard travelling as part of their lives.

6 They are young. Ba Ling Hou (travelers born in the 80s) takes up 54% of China s outbound tourist market. Jiu Ling Hou (travelers born in the 90s) takes up 11.3% of China s outbound tourist market. They are educated. Over 70% of Chinese outbound tourists are graduated from colleges or universities. (Source: China Tourism Academy, 2014 China Outbound Tourism Report )

7 3. How do Chinese like to travel? Over 60% of Chinese tourists travel abroad more than once. Over 75% of Chinese outbound tourists travel by themselves. Less than 25% of Chinese outbound tourists travel in groups organized by agencies. (Source: China Tourism Academy, 2014 China Outbound Tourism Report )

8 Over 70% of Chinese outbound tourists tend to travel with friends or family. Most Chinese outbound tourists choose destinations based on: Good experiences of friends, family and colleagues Information available on the internet Recommendations and brochures from travel agencies

9 4. How do Chinese spend while traveling? The power of Shopping China is world s No. 1 luxury product market with an annual purchase of 600 billion RMB (almost 100 billion USD) of which 500 billion RMB (almost 80 billion USD) of luxury product purchase is made abroad. 27% of DFS global sales is made by Chinese customers. Shopping items are changing recently from mainly luxury products to clothes, cosmetics and even daily groceries like food and beverages. More and more Chinese outbound tourists tend to choose comfortable and economical hotels. Expenditure in luxury hotels is declining.

10 5. Where in China do they come from? First-tier cities and eastern China are steady outbound tourist sources. Second-tier cities and south-western China show great potential. % Source province/city of Chinese outbound tourists >50% Beijing, Shanghai, Guangdong 5%-10% Jiangsu, Zhejiang 3%-5% Liaoning, Shandong, Hubei, Sichuan, Chongqing 1%-3% <1% Heilongjiang, Hebei, Tianjin, Shanxi, Henan, Anhui, Hunan, Fujian, Guangxi Jilin, Inner Mongolia, Ningxia, Qinghai, Xinjiang, Tibet, Gansu, Yunnan, Guizhou, Jiangxi, Hainan (Source: Ipsos)

11 Outlook on Inbound Tourism in Central/Eastern Europe International Tourist Arrivals in Central/Eastern Europe (% change over same period of the previous year)

12 Inbound tourism in Central/Eastern Europe in 2014 A general trend in Central and Eastern Europe: a rise of business tourism. May, 2014, Budapest, the establishment of China Central and Eastern Europe Tourism Cooperation Coordination Center. A general growth of Chinese outbound tourists in Central/Eastern Europe. Hungary, Czech Republic and Poland becoming emerging destinations in Europe for some Chinese outbound tourists.

13 Strategies and Suggestions in Chinese Market 1. Challenges Lack of awareness of CEEC countries for Chinese tourists Limited airlines and flights. Currently only one direct airline from Beijing to Warsaw by LOT. From May 1 st 2015 Air China will fly Beijing to Minsk, Budapest. No Chinese signs available in international transport facilities Few Chinese TV channels available in hotels. Visa not easy to obtain.

14 Visa Issue Visa applications from China examined within 24 hours Good examples: USA, Canada 10-year multiple entry visa Preparing visa of multiple entries in 3-5 years Up to 15 days of visafree trips in La Réunion and Tahiti Visa applications from China examined within 36 hours (Source: European Commission Seminar in Brussels, Proposal of Vice Policy Reform in 2015 )

15 Customization in hospitality services Top 10 services favored by Chinese tourists Important Should improve Union Pay / Chinese Pay-Pal 58% 26% Chinese-speaking hotel staff 54% 42% Free wi-fi 54% 17% Chinese version of tourist guidebook/map 49% 27% Chinese catering in hotel 37% 25% Chinese TV program 37% 26% Chinese website of hotel/ scenic spots 34% 22% Chinese room service 34% 30% Chinese breakfast 34% 22% (Source: Chinese outbound tourist investigation by IDN 2014)

16 2. Know the audience Diverse Chinese market Target market 1: tourists to neighboring popular destinations Austria Germany

17 Diverse Chinese market Target market 2: Business and MICE market Business travel MICE travel

18 Diverse Chinese market Target market 3: Increasing Chinese students in Europe

19 Different offers and products Theme tours for focused destinations A Czech wedding or honeymoon Healthcare trip in Hungary

20 Special offers Create phenomena Movie star, pop idol Filmed in Prague + Hit movie Somewhere Only We Know (270 million RMB box office) + City guide of Prague

21 Special offers International events Plzen, Czech Republic 2015 European Capital of Culture

22 Forecast on Future Chinese Outbound Market China to see higher growth in its outbound market Chinese outbound tourist market is to grow even faster thanks to favorable factors such as: Lower oil prices and strong GDP growth. Emerging sub-market starting from second-tier cities. Normative vacation-with-pay holiday system Tourism has become one of the major new patterns of consumption of Chinese

23 China to form clear tourist market segmentation Big family Couple (with children) Friends Couple (with no children) Independent

24 China to change patterns of outbound tourism expenditure: More practical shopping expenditure More cultural events More life experiences

25 Thank you

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