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www.china-outbound.com
Introductory Workshop for Exhibitors
COTTM 2013
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Organiser: COTRI China Outbound Tourism Research Institute Presenter: Prof. Dr. Wolfgang Georg Arlt, COTRI Anders Ellemann Kristensen, CEO Albatros Travel
www.china-outbound.com
Introductory Workshop for Exhibitors
10.00-10.10 h Introduction 10.10-10.30 h Prof. Dr. Arlt: China’s Outbound Tourism 2013 10.30-10.45 h Anders E. Kristensen: How to do successful business with Chinese tourism companies 10.45-11.45 h Q&A from the audience 11.45-12.00 h Summing up
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www.china-outbound.com
China’s Outbound Tourism 2013
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New Chinese Tourists looking for
niche products, new destinations
and investment opportunities
Prof. Dr. Wolfgang Georg Arlt Director COTRI
www.china-outbound.com
COTRI China Outbound Tourism Research Institute
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The world's leading independent research institute for information,
training, quality assessment, research and consulting relating to the
Chinese outbound tourism market.
Established: 2004
Headquarter: Heide/Germany
China office: Beijing/China
COTRI Country Partner in Bosnia-Hercegovina, Croatia, Estonia,
Finland, France, Ireland, Italy, Kosovo, Latvia, Lithuania, Macedonia,
Mexico, Morocco, New Zealand, Serbia, Slovenia, Tunisia, UK
Germany: Fritz-Thiedemann-Ring 20 25746 Heide / Germany Phone +49 481 85 55 523 Fax +49 481 85 55 121 E mail [email protected]
China: 101/2B Gui Gu Liang Cheng 1 Nong Da Nan Rd., Haidian District Beijing 100084 / P.R. of China Phone +86 134 2603 6722 E mail [email protected]
www.china-outbound.com
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Prof. Dr. Wolfgang Georg Arlt FRGS First visit to People’s Republic of China in 1978 1991-1999 owner of Inbound Tour Operator
China -> Europe (offices in Beijing and Berlin) COTRI founder and director since 2004 Professor for International Tourism Management
at West Coast University of Applied Sciences (Heide) Visiting Professor at universities in China and
United Kingdom Fellow Royal Geographical Society (London) Research Fellow Japanese Society for the Promotion
of Science (Tokyo)
Germany: Fritz-Thiedemann-Ring 20 25746 Heide / Germany Phone +49 481 85 55 523 Fax +49 481 85 55 121 E mail [email protected]
China: 101/2B Gui Gu Liang Cheng 1 Nong Da Nan Rd., Haidian District Beijing 100084 / P.R. of China Phone +86 134 2603 6722 E mail [email protected]
www.china-outbound.com
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GOOD NEWS:
China to continue pushing outbound tourism China will continue encouraging its citizens to travel overseas,
despite the economic slowdown at home.
During a meeting with UNWTO Secretary-General, Taleb Rifai, the
Chairman of the China National Tourism Administration (CNTA), Shao
Qiwei said that tourism remained one of the Chinese government’s ‘key
strategic pillars’ for economic growth, and that outbound tourism will
also boost China’s development in the long-term.
“With 148 countries now included in the list of ‘Approved Destination
Status’ (ADS), the government, and particularly CNTA, will continue
to promote the travelling of Chinese people abroad as we believe
in the mutual benefits of collaboration. By continuing to send Chinese
travellers to Europe, the benefits will eventually flow back to China,”
Shao said in Madrid.
In 2012, 80 million Chinese travelled abroad.
22.01.2013
www.china-outbound.com
But a word of caution: “The government, and particularly CNTA, will continue to promote the
travelling of Chinese people abroad.”
Good news: Support, but „continue“? This is the first time ever CNTA China National Tourism Administration is saying it is „promoting“ outbound tourism. “In 2012, 80 million Chinese travelled abroad.”
Delightful number mentioned by the Chairman, but his own research institute CTA gives 83.2 million border crossings (not different persons!) for Chinese outbound in 2012.
Chinese sources are important but official information and oversimplifying media reports should be taken with a pinch of salt.
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www.china-outbound.com
Chinese Outbound travel – approaching the 100 million border-crossings mark
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www.china-outbound.com
Travel has been an important part of the education process in Imperial China, but outbound travel has no tradition: Xu Xiake (1587-1641), China’s most famous traveller, was no Ibn Battuta or Marco Polo, he was interested in China only Exceptions: Buddhist monks and Zheng He (1371-1433), the “Chinese Columbus”
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www.china-outbound.com
Before the start of Reform and Opening policy in 1978, travel and leisure were held in contempt in the P.R. of China 1983 - 1996 VFR and delegations
1996: 8 mio. 1997 - 2004 ADS and chaotic growth
2004: 29 mio. 2005 - 2010 Gaining experience and scope 2010: 57 mio. 2011 - ? The Second Wave of China‘s Outbound Tourism:
Sophistication and segmentation 2011: 70 mio. 2012: 83 mio.
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www.china-outbound.com
Demand pushing open the gates
After 1989 (Tiananmen movement and Fall of Berlin Wall) preventing outbound tourism (politically dangerous and expensive) is no longer feasible ADS Approved Destination System installed after 1995 to control and slow down demand for outbound leisure travel – unsuccessful Since 2004 incremental paradigm change toward “Soft Power” approach Since 2009 government support of outbound tourism – opening to selected foreign tour operators in 2011 unsuccessful 2013 new party leadership curbing official travels but first time officially “encouraging” outbound tourism
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www.china-outbound.com
Becoming Global No. 1 China has developed into the number one producer of many things - Gold, TV sets, Cell Phones, Solar Panels, Beer, Apples, Cars, Carbon Dioxide and much more. In cases where the country is still only number two, like tomatoes and space stations, this is going to change soon. In tourism, China is just arriving at the top position.
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www.china-outbound.com
Global No. 1, increasing segmentation In 2012, 83.2 million border-crossings and 102 billion US$ spending elevate China to the position as the biggest global outbound tourism source market, overtaking Germany and the USA. In 2013, both in terms of numbers of travels (forecast: 95+ million border crossings) and spending (forecast: 110+ billion US$) China will be the undisputed No. 1 global source market 5% of all Chinese (app. 65 mio.) can afford to travel beyond Greater China - app. equal (and mostly identical) with the group of Chinese car owners - app. equal to the total German population 14+ years old Chinese tourists are not only growing in numbers, a rapidly increasing section of the Chinese outbound source market, the “New Chinese Tourists”, look for experiences and new destinations offering high quality services according to the specific Chinese customs, values, and demands
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www.china-outbound.com
Growth slowing down…
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www.china-outbound.com
… and China’s HNWI getting nervous…
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Survey results from Bank of China/Hurun (10/2012): 44% of all Chinese with more than 10 million RMB (app. 1.25 million Euro) in personal wealth (about one million households) are considering emigration 85% of all Chinese with more than one 10 million RMB in personal wealth are planning to send their child to study at a foreign university
www.china-outbound.com
… but outbound travel continuing to expand
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China’s economic growth: single digit Wealth creation slowing down China’s outbound tourism: double digit Importance as consumption pattern grows in importance China for Hong Kong, Macau, Taiwan by far most important source market China also for growing number of other destinations most important source market, examples: Australia, Maldives For Europe: most important Asian source market, 2012 +20%
www.china-outbound.com
The “New Chinese Tourists” – Opportunities and challenges
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www.china-outbound.com
2012: Diversification of destinations Hong Kong and Macau loosing market share
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Hong Kong +11% Macau +5% Taiwan +57% Thailand +62% Singapore +35% Malaysia +25% USA +41% Switzerland +27% Germany +19% Spain +55% N. Zealand +35% Dubai +29% Japan Jan-Sept +71%, Oct-Dec -37%
www.china-outbound.com
Niche products and destinations gaining ground
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Package tours no longer deliver much bragging power More self-organized travelers from China are slowing down and spreading
further afield Desperately seeking: Simplicity, authenticity (with Chinese characteristics) Getting away from it all, clean air and genuine products New Chinese Tourists are arriving in special locations, doing special things
and are staying for more than just a snapshot Most of them have already been to Europe and come as repeat visitors Appearance of the first ever generation for whom international travel is a
normal experience since childhood Niche products get a chance to profit from Chinese customers – and small
niches in China are still big
www.china-outbound.com
New Chinese Tourists – why do they exist?
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15 years experience since the official start of outbound leisure tourism More than 1.5 million Chinese have finished their studied outside China
since 1978; most of them went back Currently app. 1 million Chinese students in USA and Europe each About 3 million households possess personal wealth of at least 1 million US$ Average age of Chinese millionaire: 39 years About 1 million households with personal wealth of at least 1 million Euro More than 60,000 households with personal wealth of more than 100 million
RMB (app. 12 million Euro) More than 4,000 households with personal wealth of more than 1 billion
RMB (app. 120 million Euro) 550 million active internet users
www.china-outbound.com
New Chinese Tourists – becoming “normal” (a.k.a. like us)?
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Package tours developed a negative image, mostly for lower end of upper class (“rich coalmine owner”), first-time visitors, or very specialised offers (bird photography in Bhutan)
More experience and language skills lead to different forms of “semi-” or “partly”-organized trips with tour operators providing visa, air trip and maybe a few hotel bookings
Self- or semi-self organized travellers are however not be confused with “individual” travellers in the western sense
New Chinese Tourists are still Chinese: They are still happy to see signage and other information in Chinese as a sign of respect for their country, they will still rely mainly on peer group information from other Chinese, they will still travel outside Asia for prestige, education and investment, not for holidays, they are still “Money-rich, Time-poor”
www.china-outbound.com
Travel motivation
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Travelling long distance means for Chinese outbound travellers first of all:
Investment in - Personal prestige within the group - Self-esteem - Social capital - Learning But also: - Business opportunities - Investment in Real Estate / companies
www.china-outbound.com
Travel goals
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If inter-continental travel is investment, the services and products offered have to be organised in a way to guarantee a good Return on Investment (ROI):
Value for money and for time Guaranteed quality as seen from a Chinese point of view No more time spent on an activity as needed for prestige gain Supporting the bragging value of a place/an activity: famous, typical, oldest/highest/awarded, celebrities choice, unusual, hard to get, VIP only, authentic, as seen in TV and movie Connecting fun und investment opportunities Giving face to China and all Chinese Without risk
www.china-outbound.com
How to learn to provide service quality the way the New Chinese Tourists want it and how to communicate it to the market?
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CHINA OUTBOUND TOURISM RESEARCH INSTITUTE
www.china-outbound.com
Training and Quality Assurance by CTW Chinese Tourists Welcoming Programme Visibility in China on www.welcoming Chinesetourists.cn
www.china-outbound.com
Developing successful niche products
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Consulting, Market Research, Strategy Development and Coaching for Tourism Product adaptation and Marketing optimisation China Market Entry Support for Investment-related Service Providers in cooperation with
www.china-outbound.com
Travel future
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The low price, low quality Chinese package outbound tourism will suffer from the pending economic crash in China, annual growth rates in terms of number of persons travelling may fall below the 20% mark.
But the New Chinese Tourists will continue to go abroad, as the motives for international travel – prestige, networking, distinction, experience – will not change.
The annual growth rates in spending on international travel will probably stay above the 20% mark.
www.china-outbound.com
TOP 5 things to understand about the New Chinese Tourists
1. “New Chinese Tourists” (NCTs) are different from the first-time package-tour visitors: arriving in smaller, often self-organised groups, visiting less countries but more destinations in one country during one trip
2. NCTs are middle-aged (25-40), Social media driven, often speak English, often studied abroad, are first-generation affluent, mostly work hard for their money, are therefore “money-rich” but “time-poor”
3. NCTs are not coming to Europe for holidays and relaxation, but for seeking prestige, self-esteem and individual distinction within the group
4. NCTs are less interested in sightseeing and more interested in experiences, which have to be intensive, short and carrying bragging potential
5. NCTs are still Chinese, looking for signs of appreciation of China and the Chinese culture, seeing themselves as representing China and as part of the Chinese travel community
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www.china-outbound.com
Thank you for you attention – looking forward to your questions and comments during the Q&A discussion! Contact: [email protected]
Have a successful COTTM 2013 in the Year of the Water Snake!
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