The Rapid Rise of China's Outbound Millions

China Outbound The Rapid Rise of China’s Outbound Millions

PromPeru Workshop

March 30, 2017

Cees Bosselaar Vice President Business Development The Rapid Rise of China’s Outbound Millions

Shanghai

Guangzhou Shenzhen

Source: PhoCusWright's China Consumer Travel Report Kunming

4 Kunming 3.5Mil

Source: PhoCusWright's China Consumer Travel Report 5 Kunming 3.5Mil

Source: PhoCusWright's China Consumer Travel Report 6 Travel is our world. PhoCusWright is the global travel research authority on how travelers, suppliers and intermediaries connect

27% 8% 25%

27%

The Middle East

Source: Phocuswright’s Global Online Travel Overview Third Edition Eastern Europe & Russia

Global Online travel share by region

6% 35% 31% 4%

21%

The Middle East

Source: Phocuswright's Global Online Travel Overview Third Edition Eastern Europe & Russia

50%

40%

Europe 30% U.S. APAC 20% Eastern Europe Middle East

10% Latin America

0% 2011 2012 2013 2014 2015 Note: 2013-2015 projected. Source: Global Online Travel Overview Third Edition

Are literally breaking new ground

Not just traveling farther and spending more.

China Unbounded: The Rapid Rise of China’s Outbound Millions • Analyses traveler behavior, attitudes and intentions. • Provides in-depth segmentation across a wide array of characteristics, from trip types to income levels and travel experience • Explores the travel life cycle across devices and platforms.

. Survey fielded online in 2016

. Average length of survey was 23 minutes

. About 25,000 people participated in the survey with 3,143 qualified

. Qualifying respondents:  Adults 18+ years of age  Took at least one leisure trip outside of mainland China in the past year  Played an active role in planning their trips

Source: Phocuswright Inc.

. Quota was set in survey fielding to ensure enough sample for each destination region

. Results are weighted by age and gender against online population, and also by shares of Chinese outbound trips to each destination

. Overall unweighted sample size: 3,143  Travelers to Americas: 541  Travelers to Europe: 573  Travelers to Northeast Asia: 515  Travelers to Southeast Asia: 476  Travelers to Greater China: 523  Travelers to AUS/NZ: 515

Source: Phocuswright Inc.

. Long-haul vs. Short-haul travel  Short-haul is defined as travel within Asia, including Hong Kong, Macau, Taiwan, Southeast Asia and Northeast Asia.  Long-haul includes travel to the Americas, Europe, Australia and New Zealand.

. Sample includes significant representation beyond Beijing, Guangzhou, Shanghai and Shenzhen, to include respondents from Tier 2 and 3 cities

. City tiers  First-tier: Beijing, Shanghai, Guangzhou, Shenzhen  Second-tier: Changchun, Changsha, Chengdu, Chongqing, Dalian, Fuzhou, Harbin, Hangzhou, Jinan, Nanjing, Ningbo, Qingdao, Shenyang, Suzhou, Tianjin, Wuhan, Wuxi, Xiamen

Source: Phocuswright Inc.

Source: Chinese National Tourism Administration (CNTA)

For 23% of them, it was their first trip outside of Mainland China

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

$205.7 billion Dining Air 6% 10% Other (Rail, Coach, Cruise, Car) Lodging 2% Shopping 9% 22% Destination activities 3%

1.3 trillion RMB Vacation packages 650 billion PEN 48%

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Dining 20% Air 33%

Destination activities 10%

Other (Rail, Coach, Cruise, Car) 7% Lodging 30%

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project *Share of spend on products bought individually, whether the traveler also purchased a vacation package or not

Most dramatic devaluation of Chinese yuan in two decades

2016: Stock market circuit breaker incident

Annual growth fell to 6.7%

Overcapacity and service sector problems

2015: Budget for 6% 8% 28% 58% INTERNATIONAL trips

2013: Budget for 11% 7% 28% 55% LEISURE trips

2015: Number of 6%3% 36% 54% INTERNATIONAL trips

2013: Number of 10% 5% 30% 55% LEISURE trips

Not sure/Not applicable Less/Lower No change More/Higher

Question: A15: What adjustments, if any, do you expect to make to your international leisure travel plans over the next two years (compared to the past 12 months)? Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project Source: Phocuswright’s China Consumer Travel Report, 2013

© 2016 Phocuswright Inc. All Rights Reserved. 35 Future Travel Destinations Outside of China 46% Northeast Asia (e g , Japan, Korea) 34% 43% Hong Kong, Macau, Taiwan 31% 43% Australia/New Zealand 40% 40% Europe 50%

Southeast Asia (e g , Thailand, Singapore, Malaysia) 40% 29% Short Haul 37% Long Haul United States/Canada 46% South and Central Asia (e g , India, Maldives, Nepal, 22% Kazakhstan) 19% 9% Central or South America 14% 5% Mexico or the Caribbean 9% 5% Africa or the Middle East 9%

Question: A17: What regions outside of Mainland China will you likely visit in the next two years? Select all that apply Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

34% 33%

27% 27% 23% 23% 23% 23% 21% 22% 21% 22% 19% 14% 15% 14% 11% 10% 10% 8%

18-24 25-34 35-44 45+ <8,000 Yuan 8,000 - 9,999 Yuan 10,000-14,999 Yuan 15,000-19,999 Yuan 20,000+ Yuan

Question: SA: How old are you? SD: What is your approximate total monthly household income? Select one Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Total 47% 18-24 37% 25-34 53% 35-44 53% 45-54 39% 55+ 37% Under 4,000 RMB 12% 4,000 – 5,999 RMB 22% 6,000 – 7,999 RMB 28% 8,000 – 9,999 RMB 40% 10,000 – 14,999 RMB 58% 15,000 – 19,999 RMB 78% 20,000+ RMB 83%

Question: Eb. How many leisure trips did you take to the following places in the past year? Base: Chinese online survey respondents (N=23,192) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

By Last Trip Destination

6.88 6.04 5.2 4.82

Overall Greater China NEA/SEA Long Haul

Question: SF: How many times have you traveled outside of mainland China, Hong Kong, Macau and Taiwan in your life, including your most recent trip? Base: Chinese Outbound Travelers: Hong Kong, Macu, Taiwan: (N= 528); Northeast Asia (N=538); Southeast Asia (N=487); Australia/New Zealand (N= 446); Europe (N=490); Americas (N=497) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

1 trip 2 trips 3+ trips Mean: 5.2 6.0 4.9 4.9

56% 61% 62% 65%

20% 21% 24% 20% 23% 18% 14% 15%

Overall Tier 1 Tier 2 Other

International Domestic 6.0

4.9 4.9 4.4 4.3 4.6 3.7

3.1 3.1 3.0 3.0 2.9

2.3 1.8 1.7 1.4 1.4 1.5

Overall <8,000 Yuan 8,000 - 9,999 10,000-14,999 15,000-19,999 20,000+ Yuan Yuan Yuan Yuan

Question: SE: How many leisure trips did you take in the past year. Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

1 trip 2 trips 3+ trips

8% 5% 9% 14% 18% 15% 22% 27% 23% 25% 24%

38%

78% 73% 68% 61% 58% 35%

Overall <8,000 Yuan 8,000 - 9,999 10,000-14,999 15,000-19,999 20,000+ Yuan Yuan Yuan Yuan

1 trip 2 trips 3+ trips

14% 9% 12% 21%

25% 21% 25% 30%

61% 65% 66% 50%

Overall Tier 1 Tier 2 Other

. China’s outbound travelers are young and relatively well off. Adults aged 25-34 made up 42% of 2015 outbound travelers, and 44% in that age group earned a monthly income of 15,000 yuan or more. . Outbound travelers 45+ trail travelers 25-44 in income. The 35-44 age group fell into the two highest-earning brackets at the highest rate (49%), but the 25-34 age group was not far behind. . Travelers aged 25-34 and 35-44 were much more likely than any other age groups to have taken an international trip in 2015. The lowest outbound travel incidence was found in travelers 18-24 and 55+. . High income was a strong indicator of likelihood to travel abroad, as well as frequency of international travel. City tier exhibited smaller differences, but Tier 1 residents were better traveled than Tier 2. . Travelers who visited long-haul destinations had more lifetime travel experience than those who went to short-haul destinations.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Around calendar New Year (January 1) 3% Other dates in January 2% Around Chinese New Year 7% Other dates in February 2% March 3% April 6% Around Labor Day (May 1) 12% Other dates in May 7% June 5% July 7% August 9% September 6% Around National Day (October 1) 26% Other dates in October 4% November 1% December 0%

Question: A9: When did you take your most recent international leisure trip? Please select one, based on when the majority of the trip occurred Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Around calendar New Year (January 1) Other dates in January Around Chinese New Year Other dates in February March April Around Labor Day (May 1) Other dates in May June July August September Around National Day (October 1) Other dates in October November December 0% 5% 10% 15% 20% 25% 30% 35% 3 Nights or Less 4-6 nights 7+ nights

See natural/cultural/historical attractions 54% Get away/take a break/relax 53% Learn about life in other parts of the world 42% Shop 40% Visit an attraction (amusement park, museum) 30% Indulge in upscale/luxury experiences 21% Business trip extended for leisure 19% Celebrate an occasion, such as a birthday 14% Engage in a particular activity (eg golf, ski) 13% Satisfy a sense of adventure 13% Visit friends or family 10% Attend a specific event (eg concert/sporting event) 9%

Question: B3: What motivated you to take your most recent international trip? Select all that apply Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Australia/ Hong Kong, Northeast Southeast Americas New Europe Macu, Taiwan Asia Asia Zealand Get away/take a break/relax 51% 60% 66% 54% 50% 49%

See natural/cultural/historical attractions 50% 68% 63% 65% 68% 58% Shop 40% 56% 29% 33% 42% 45% Learn/experience how people live in other parts of the world 38% 54% 51% 54% 49% 43% Visit an attraction such as an amusement park or museum 29% 33% 26% 34% 37% 35%

Had a business trip there and chose to extend it for leisure 20% 16% 15% 20% 17% 21%

Indulge in upscale/luxury experiences 20% 24% 20% 32% 29% 30%

Celebrate an occasion, such as a birthday or anniversary 14% 10% 13% 13% 11% 15%

Engage in a particular activity, such as golf or ski 14% 9% 11% 13% 11% 12%

Satisfy a sense of adventure 13% 11% 13% 14% 14% 16%

Visit friends or family 11% 6% 8% 7% 7% 13%

Attend a specific event, such as a concert or sporting event 9% 6% 9% 9% 8% 10%

Question: B3: What motivated you to take your most recent international trip? Select all that apply Base: Hong Kong, Macau,Taiwan: (N= 528); Northeast Asia (N=538); Southeast Asia (N=487); Australia/New Zealand (N= 446); Europe (N=490); Americas (N=497) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

With an adult (spouse or significant other) 49%

By myself 24%

With family including children under 18 years old 23%

With friends or colleagues 14%

With adult family (siblings or cousins) 7%

With elder family members (elderly parents or 6% grandparents)

Question: A5: Who did you travel with on this trip? Select all that apply. Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

49% With an adult 33% 23% (spouse or Americas 22% 8% significant other) 9% 52% 22% By myself 19% Europe 20% 9% 7% 53% 25% With family 23% including Australia/New Zealand 16% 9% children under 18 3% years old 52% 18% With friends or 26% Southeast Asia (e g , Thailand, Singapore, Malaysia) 17% colleagues 6% 6% 60% 20% With adult family 25% Northeast Asia (e g , Japan, Korea) 16% (siblings or 5% cousins) 5% 47% 25% With elder family 22% Hong Kong, Macau, Taiwan 13% members (elderly 8% 6% parents or grandparents)

© 2016 Phocuswright Inc. All Rights Reserved. 52 Key Findings: Seasonality/Destination SEASONALITY  The outbound travel season kicks off with the May 1 holiday, and peaks at the early-October National Day. A quarter of outbound trips occur in early October, and 72% of outbound trips take place between May 1 and National Day.  Chinese New Year, while a huge season for domestic travel, is not as big for international travel. Outbound trips at Chinese New Year also tend to be short, with the highest portion lasting three nights or fewer. DESTINATION TRENDS (

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

TRAVEL PARTY  Solo trips represented about a quarter of Chinese travelers’ outbound trips.  The most popular destinations for family travel were within Asia. MOTIVATION . The desire to see natural/cultural/historical attractions is on par with the desire to get away/take a break as the top two motivations for most ( recent international trip. . Nearly one in five international leisure trips were an extension of a business trip. Long-haul travelers were more likely than short-haul to cite this as a trip motivation. . Shopping was a commonly cited reason for outbound travel, especially to Japan, where 56% of travelers said shopping was an important motivation for their trip.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

¥17,685 ¥17,490

¥17,019

Overall Non-Package Purchasers Package Purchasers

10,000 CNY = $1,500 = 5,000 PEN (March 27, 2017 - approx.)

¥17,685

¥7,980 ¥7,295

¥2,265

Vacation packages Shopping Dining Total Spend

¥6,850

¥4,568

¥3,090 ¥2,505 ¥1,955 ¥1,946 ¥1,228 ¥1,372 ¥807 ¥485

Airplane Hotel, motel, Car rental Home, Overnight Long distance Long Destination Shopping Dining ticket inn or bed apartment, cruise rail ticket distance activities and breakfast room rental coach

Question: A14: How much did you spend on the Following for this trip? Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project *Averages for each component based only on travelers who reported purchasing that component individually.

¥18,000 ¥16,000 ¥14,000 ¥12,000 ¥10,000 ¥8,000 ¥6,000 ¥4,000 ¥2,000 ¥0 Airplane ticket Hotel, motel, inn or Car rental Home, apartment, Destination activities (e Shopping (e g , luxury bed and breakfast room rental g , sightseeing tour, products, household museum ticket) items, souvenirs, gifts)

Hong Kong, Macau, Taiwan Northeast Asia (e g , Japan, Korea) Southeast Asia (e g , Thailand, Singapore, Malaysia) Australia/New Zealand Europe Americas Question: A14: How much did you spend on the Following for this trip? Base: Chinese Outbound Travelers: Hong Kong, Macau, Taiwan: (N= 528); Northeast Asia (N=538); Southeast Asia (N=487); Australia/New Zealand (N= 446); Europe (N=490); Americas (N=497) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

¥25,541

¥21,019

¥14,458 ¥13,508

¥10,197

<8,000 Yuan 8,000 - 9,999 Yuan 10,000-14,999 Yuan 15,000-19,999 Yuan 20,000+ Yuan

+32% ¥25,541

¥10,864 ¥11,317

¥6,107 ¥4,193 ¥2,833 ¥3,060 ¥1,943 ¥2,149 ¥1,860 ¥760 ¥535

Airplane Hotel, Car rental Home, Overnight Long Long Destination Vacation Shopping Dining Total ticket motel, inn apartment, cruise distance distance activities packages Spend or bed and room rental rail ticket coach breakfast

Question: A14: How much did you spend on the Following for this trip? Base: Chinese outbound travelers with monthly household income of 20,000 Yuan or more : (N=635) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project *Averages for each component based only on travelers who reported purchasing that component individually.

¥20,872

¥18,097

¥14,642

Tier 1 Tier 2 Other Question: A14: How much did you spend on the Following for this trip? Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

¥23,119 ¥21,758 ¥20,111

¥17,490 ¥16,180 ¥14,975 ¥14,695 ¥13,863

Beijing Shanghai Sichuan Guangdong* Jiangsu Shandong Zheijiang Overall Average

¥40,223 ¥40,016

¥34,318

¥23,135

¥17,490 ¥16,461 ¥14,384

Hong Kong, Macau, Northeast Asia Southeast Asia Australia/New Europe Americas Overall Taiwan Zealand

3 nights or less 4-6 nights 7+ nights Short Haul 21% 50% 29%

Long Haul 4% 34% 61%

Hong Kong, Macau, Taiwan 37% 41% 22%

Northeast Asia 13% 57% 29%

Southeast Asia 13% 52% 36%

Australia/New Zealand 6% 36% 58%

Europe 2% 30% 67%

Americas 5% 37% 58%

Question: A3: How long was your most recent international leisure trip? Please enter number of nights Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

¥16,606 ¥15,522

¥13,355

¥10,518

¥6,481 ¥6,517

Southeast Asia Hong Kong, Macau, Northeast Asia Australia/New Zealand Europe Americas Taiwan

Question: A14: How much did you spend on the Following for this trip? Base: Chinese Outbound Travelers: Hong Kong, Macu,Taiwan: (N= 528); Northeast Asia (N=538); Southeast Asia (N=487); Australia/New Zealand (N= 446); Europe (N=490); Americas (N=497) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

. The average spend per trip was ¥17,490. Package purchasers spent an average of roughly ¥700 more than non-package purchasers. . The most affluent travelers spent 32% more than the overall average. Categories where they outspent by the biggest margins were car rental, cruises, shopping, dining and vacation packages. . Travelers from bigger cities spent more per trip. The gap was wider between Tier 2 and smaller cities (24%) than it was between Tier 1 and Tier 2 (15%). . Travelers to Europe spent the most overall, followed closely by the Americas. . Longer trip distance led to higher spend. Travelers to both the Americas and Europe spent more than twice as travelers to Southeast Asia, and nearly twice as much as travelers to Northeast Asia. . Long-haul travelers not only spend more on flights, but also have more time in destination to drive up their spend. The share of long-haul trips that lasted one week or longer was twice the share for short-haul trips.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

FIT standalone 29% Group packages FIT Both 66% 2% FIT packages 3%

Question: A4. On this trip, did you travel with an escorted tourist group, where the majority of in-destination transport and activities were led by one or more tour guides? A11: When purchasing travel components (e g , airline tickets, paid lodging, car rental, rail tickets) for your most recent international leisure trip, how did you purchase them? Select all that apply Base: Chinese Outbound Travelers : (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Hotel, motel, inn or bed & breakfast 85%

Airplane ticket 84%

Destination activities 64%

Long-distance coach 29%

Vacation home, apartment, room rental 25%

Car rental 19%

Long-distance rail ticket 16%

Question: A12A. What was included in the package that you purchased? Select all that apply. Base: Chinese Outbound Travelers: (N=3,043): Package Purchasers: (N=2,156) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Hotel, motel, inn or bed & breakfast 85%

Airplane ticket 76%

Destination activities 69%

Long-distance coach 23%

Vacation home, apartment, room rental 21%

Car rental 25%

Long-distance rail ticket 18%

Question: A12: Which of the following travel products did you purchase individually (not as part of a package) for your most recent international leisure trip? Select all that apply Base: Chinese Outbound Travelers: (N=3,043): Package Purchasers: (N=2,156); Individual Bookers (N=939) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

FIT standalone , 35% Group packages, 60% FIT Both, 1% FIT packages, 3%

Question: A4. On this trip, did you travel with an escorted tourist group, where the majority of in-destination transport and activities were led by one or more tour guides? A11: When purchasing travel components (e g , airline tickets, paid lodging, car rental, rail tickets) for your most recent international leisure trip, how did you purchase them? Select all that apply Base: Chinese outbound travelers with monthly household income of 20,000 Yuan or more (N=635) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

69% 69% 66% 66%

57%

Overall 18-24 25-34 35-44 45+

Question: A4: On this trip, did you travel with an escorted tourist group, where the majority of in-destination transport and activities were led by one or more tour guides? Base: Chinese Outbound Travelers (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Escorted Tour Group FIT

32% 38% 34%

68% 62% 66%

Tier 1 Tier 2 Tier 3

19% 31% 26% 24% 25% 29%

76% 69% 71% 68% 65% 60%

Hong Kong, Northeast Asia Southeast Asia Australia/New Europe Americas Macau, Taiwan Zealand

81% 74% 76% 75% 71% 69% 71%

33% 31% 30% 27% 25% 26% 21%

Overall Hong Kong, Macau, Northeast Asia (e g Southeast Asia (e g Australia/New Europe Americas Taiwan , Japan, Korea) , Thailand, Zealand Singapore, Malaysia) Individually Part of a Vacation Package

Question: A11: When purchasing travel components (e g , airline tickets, paid lodging, car rental, rail tickets) for your most recent international leisure trip, how did you purchase them? Select all that apply Base: Chinese Outbound Travelers : (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

73%

66%

54%

Overall First Time Visitor Repeat Visitor

83% 77% 78% 78% 78% 76% 75% 69% 68% 63% 63% 57% 55%

45%

Overall Hong Kong, Macau, Northeast Asia Southeast Asia Australia/New Europe Americas Taiwan Zealand First Timers Repeat Visitors

43% 41%

31% 29%

21% 17% Escorted Tour Group FIT

7% 4% 4% 2%

I feel very comfortable I can understand most I know common I know a few words I am not at all familiar communicating in English words/phrases, but with English English would have difficulty communicating in English

Question: F6: How well do you understand written English? Base: Chinese Outbound Travelers (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

53%

45% 44%

33%

15% 11%

Completely prepackaged Customized vacation package Vacation package with some components modified First Time Visitor Repeat Visitor Question: A13: Which type of packages did you purchase on your last outbound leisure trip Select all that apply Base: Package Purchasers: (N=2,156) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

. Tour groups are far from dead. Two thirds of outbound travelers joined an escorted group. Package purchase incidence was slightly higher, at 71%. . Flight and hotel were the travel components included in the highest share of packages, followed by destination activities. . Group tour purchases vary significantly by region visited. Australia/New Zealand had the highest share of group tour travelers. Northeast and Southeast Asia, both popular( with less experienced travelers, also had a high share of group tourists. Europe had a higher share of groups than the Americas, perhaps due to its greater diversity of languages and cultures requiring more support for travelers than the Americas.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

. The strongest predictor for FIT travel is comfort level. Travelers who rate their English skills highly and those returning to a destination are much less likely to travel with a group. Repeat visitors to long-haul destinations are especially more likely to travel independently. . The wealthiest and youngest travelers were significantly less likely to travel with escorted groups. Tier 1 residents also were more likely than Tier 2 ( residents to travel independently. . With the youngest, wealthiest and most experienced travelers all leaning toward independent trips, it is likely that outbound travel from China will trend more toward FIT over the next several years. . The transition to independent trip planning is not a direct and immediate change; it happens gradually. As travelers become more experienced, many opt for packages that give them more control than a completely bundled, one- size-fits-all package.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

89% 86% 79% 77% 69%

54%

23%

Overall 1st time Hong Kong, Northeast Asia Southeast Asia Australia/New Europe Americas Outbound Travel Macau, Taiwan (e g , Japan, (e g , Thailand, Zealand Korea) Singapore, Malaysia)

Question: A7: Was it your first time to visit the destination? Base: Chinese Outbound Travelers: Hong Kong, Macu,Taiwan: (N= 528); Northeast Asia (N=538); Southeast Asia (N=487); Australia/New Zealand (N= 446); Europe (N=490); Americas (N=497) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Internet websites via computer 76% Websites or applications via smartphone 50% Personal recommendations from friends/family 50% Personal advice from travel professionals/travel agents 37% Printed travel guidebooks 35% Websites or applications via tablet 22% Calls to travel providers, such as airlines and hotel… 21% Printed newspapers, magazines or brochures 19% Calls/visits to city/state visitor bureaus/tourism offices 18% Online advertising/email promotions 15% TV/radio 12% Printed advertising/billboards/posters 7% Not sure 1%

Question: B7: What sources of information/media did you reference when selecting the destination(s) for this trip? Select all that apply Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Online travel booking websites/apps, such as Ctrip, Tuniu or Qunar

General search engines/apps, such as Baidu

Online mall, such as Taobao, Alitrip or JD

Social networking websites/apps, such as Sina Weibo, WeChat or Renren

Expert travel guide websites, such as Mafengwo or Qyer 18-24

Online forum or blogs such as Tianya cn, mop com, Baidu forums 25-34

Group buy or local services sites, such as Meituan or Nuomi 35-44

Traveler review websites, such as TripAdvisor/Mao Tu Ying or 45+ Dianping

General portal websites, such as sina com or sohu com

Destination websites/apps, such as Hellola cn

Magazine/newspaper websites, such as Southern Metropolitan Daily 0% 20% 40% 60% 80%

Question: B8: What type(s) of websites/apps do you recall using while researching the destination of this trip? Select all that apply Base: Online Researchers: (N=1,980) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

7% I had the specific place in mind and did 11% 26% not research destination options

I had a few places in mind when I started researching destination options

I had no idea where I wanted to go until I started researching options

I hadn’t been thinking about taking this trip, but saw a good deal for this 56% destination and decided to book it

Question: B4: Which of the following statements best describes the circumstances of this trip? Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

One day or less 2 to 6 days 1 to 2 weeks 3 to 4 weeks 1 to 2 months 3 months or longer 4% 2%

17% 21%

30% 26%

Question: B5: How far in advance of your departure did you decide on the destination for this trip? Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

3+ 3% months 8% 9% 17% 1 to 2 months 30% 31% 3 to 4 25% weeks

1 to 2 30% 26% weeks 32% 2 to 6 days 23% 27% One day 20% or less 9% 7% 3% 1% Greater China NEA/SEA Long Haul Question: B5: How far in advance of your departure did you decide on the destination for this trip? Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Safety/political stability 62% Clean environment with low pollution 38% Natural features/landscapes (mountains, rainforests, lakes) 37% Appeal of local culture (food, music, arts) 31% Visa requirements/entry procedures 30% Ease of travel to the destination (length of flight, number of stops) 30% Reputation/popularity as a travel destination 28% Landmarks/cultural/historical attractions (historical sites, museums) 27% Travel cost 26% Quality of beaches 25% Shopping 21% Dining and nightlife 20% Language (I or someone in my group speaks the local language) 19% Activity options (mountain climbing, diving) 16%

Question: B1: Please rate how important each of the following destination characteristics was to you when deciding on where to go for your last international leisure trip. Please rate each characteristic on a scale from 1 to 5 (1 being not at all important, 3 being moderately important and 5 being extremely important) Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Australia/ Hong Kong, Northeast Southeast Americas New Europe Macau, Taiwan Asia Asia Zealand Safety/political stability 61% 70% 64% 54% 54% 52% Clean environment with low pollution 38% 42% 39% 42% 32% 35% Natural features/landscapes (mountains, rainforests, lakes) 35% 46% 39% 43% 34% 35% Visa requirements/entry procedures 31% 31% 25% 28% 27% 27% Appeal of local culture (food, music, arts) 30% 36% 29% 35% 27% 31% Ease of travel to the destination (length of flight, number… 30% 31% 27% 34% 21% 26% Reputation/popularity as a travel destination 27% 33% 27% 29% 24% 26% Travel cost 27% 24% 21% 20% 23% 23% Landmarks/cultural/historical attractions (historical sites,… 27% 33% 26% 35% 27% 28% Quality of beaches 25% 28% 24% 31% 25% 26% Shopping 21% 28% 13% 24% 20% 23% Language (I or someone in my group speaks the local…20% 15% 17% 23% 19% 20% Dining and nightlife 20% 26% 15% 26% 16% 24% Activity options (mountain climbing, diving) 17% 18% 11% 18% 16% 21%

Question: B1: Please rate how important each of the following destination characteristics was to you when deciding on where to go for your last international leisure trip. Please rate each characteristic on a scale from 1 to 5 (1 being not at all important, 3 being moderately important and 5 being extremely important) Base: Chinese Outbound Travelers: Hong Kong, Macau,Taiwan: (N= 528); Northeast Asia (N=538); Southeast Asia (N=487); Australia/New Zealand (N= 446); Europe (N=490); Americas (N=497) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Australia/ Hong Kong, Northeast Southeast New Europe Americas Macu, Taiwan Asia Asia Zealand Safety/political stability 43% 56% 38% 51% 49% 45% Ease of travel to the destination (length of flight, number… 42% 43% 33% 33% 29% 37% Shopping 39% 45% 22% 35% 32% 37% Visa requirements/entry procedures 36% 33% 34% 33% 29% 31% Appeal of local culture (food, music, arts) 36% 37% 31% 41% 37% 38% Landmarks/cultural/historical attractions (historical sites,… 35% 34% 30% 38% 38% 37% Reputation/popularity as a travel destination 35% 39% 33% 41% 31% 39% Natural features/landscapes (mountains, rainforests, lakes) 34% 39% 36% 50% 36% 40% Clean environment with low pollution 34% 49% 35% 53% 38% 41% Language (I or someone in my group speaks the local… 33% 19% 22% 31% 24% 30% Dining and nightlife 31% 31% 23% 34% 27% 37% Quality of beaches 28% 26% 31% 49% 29% 35% Travel cost 25% 22% 22% 28% 20% 26% Activity options (mountain climbing, diving) 22% 20% 19% 35% 20% 28%

Question: B2: Thinking about your most recent leisure trip to [question(title), id=23], how would you rate your destination on the following characteristics?. Please rate each characteristic on a scale from 1 to 5 (1 being poor3 being adequate 5 being excellent) Base: (N= 528); Northeast Asia (N=538); Southeast Asia (N=487); Australia/New Zealand (N= 446); Europe (N=490); Americas (N=497) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

High Satisfaction

Safety/political stability

Natural/landscapes Reputation/popularity Clean Environment Local culture Shopping Landmarks/cultural Ease of travel to Low Beach quality High Importance Importance Dining & nightlife

Activity options Language Visa requirements Travel cost

Low Satisfaction Question: B1: Please rate how important each of the following destination characteristics was to you when deciding on where to go for your last international leisure trip. Please rate each characteristic on a scale from 1 to 5 (1 being not at all important, 3 being moderately important and 5 being extremely important); B2: Thinking about your most recent leisure trip to [question(title), id=23], how would you rate your destination on the following characteristics?. Please rate each characteristic on a scale from 1 to 5 (1 being poor3 being adequate 5 being excellent) Base: Chinese Outbound Travelers to North America: (N=494) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

High Satisfaction

Landmarks/cultural Clean Environment Local culture Natural/landscapes Low High Importance Reputation/popularity Importance Shopping Beach quality Visa requirements Ease of travel to

Dining & nightlife

Language

Activity options Travel cost Low Satisfaction Question: B1: Please rate how important each of the following destination characteristics was to you when deciding on where to go for your last international leisure trip. Please rate each characteristic on a scale from 1 to 5 (1 being not at all important, 3 being moderately important and 5 being extremely important); B2: Thinking about your most recent leisure trip to [question(title), id=23], how would you rate your destination on the following characteristics?. Please rate each characteristic on a scale from 1 to 5 (1 being poor3 being adequate 5 being excellent) Base: Chinese Outbound Travelers to Europe: (N=489) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

High Satisfaction

Ease of travel to Safety/ political stability Visa requirements Shopping Reputation/popularity Local culture Low High Dining & Landmarks/ Clean Environment Importance Natural/ Importance nightlife cultural Language landscapes Beach quality

Travel cost

Activity options

Low Satisfaction Question: B1: Please rate how important each of the following destination characteristics was to you when deciding on where to go for your last international leisure trip. Please rate each characteristic on a scale from 1 to 5 (1 being not at all important, 3 being moderately important and 5 being extremely important); B2: Thinking about your most recent leisure trip to [question(title), id=23], how would you rate your destination on the following characteristics?. Please rate each characteristic on a scale from 1 to 5 (1 being poor3 being adequate 5 being excellent) Base: Chinese Outbound Travelers to Hong Kong/Macau/Taiwan: (N=527) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

High Satisfaction

Safety/political stability

Clean Environment Shopping Ease of travel to Reputation/popularity Local culture Natural/landscapes Low Landmarks/cultural High Importance Dining & nightlife Visa requirements Importance

Beach quality Travel cost

Activity options

Language Low Satisfaction Question: B1: Please rate how important each of the following destination characteristics was to you when deciding on where to go for your last international leisure trip. Please rate each characteristic on a scale from 1 to 5 (1 being not at all important, 3 being moderately important and 5 being extremely important); B2: Thinking about your most recent leisure trip to [question(title), id=23], how would you rate your destination on the following characteristics?. Please rate each characteristic on a scale from 1 to 5 (1 being poor3 being adequate 5 being excellent) Base: Chinese Outbound Travelers to North East Asia: (N=537) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

High Satisfaction

Reputation/popularity Natural/landscapes Safety/ Visa requirements Ease of travel to political stability Clean Environment

Beach quality Local culture Low Landmarks/cultural High Importance Importance Dining & nightlife Travel cost

Shopping Activity options

Language Low Satisfaction Question: B1: Please rate how important each of the following destination characteristics was to you when deciding on where to go for your last international leisure trip. Please rate each characteristic on a scale from 1 to 5 (1 being not at all important, 3 being moderately important and 5 being extremely important); B2: Thinking about your most recent leisure trip to [question(title), id=23], how would you rate your destination on the following characteristics?. Please rate each characteristic on a scale from 1 to 5 (1 being poor3 being adequate 5 being excellent) Base: Chinese Outbound Travelers to South East Asia : (N=486) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

High Satisfaction

Clean Environment Natural/landscapes Safety/ Beach quality political stability

Reputation/popularity Low Local culture High Importance Landmarks/cultural Importance Ease of travel to Dining & nightlife Activity options Shopping Visa requirements

Language

Travel cost

Low Satisfaction Question: B1: Please rate how important each of the following destination characteristics was to you when deciding on where to go for your last international leisure trip. Please rate each characteristic on a scale from 1 to 5 (1 being not at all important, 3 being moderately important and 5 being extremely important); B2: Thinking about your most recent leisure trip to [question(title), id=23], how would you rate your destination on the following characteristics?. Please rate each characteristic on a scale from 1 to 5 (1 being poor3 being adequate 5 being excellent) Base: Chinese Outbound Travelers to ANZ : (N=445) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

. Online via laptop or desktop is the most-used platform for destination research, followed closely by mobile platforms. Personal recommendations also rated highly, used by half of outbound travelers. . OTAs play a big role at the top of the funnel. Intermediary travel booking sites (including OTAs like Ctrip and Tuniu, and online malls like Alitrip) were more popular destination research resources than travel guide sites and traveler review sites. . Travelers over 44 are heavily dependent on OTAs and general search to research destinations. Younger travelers use a greater variety of resources, including their social networks, travel guide sites and traveler review sites. . Although Chinese outbound travelers spend heavily on shopping, quality of shopping rated relatively low in importance for destination selection. It may be that travelers expect good shopping options will abound in many destinations, making it less of a differentiator than other factors.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Internet websites via computer 75%

Websites or applications via smartphone 45%

Personal recommendations from friends/family 39%

Printed travel guidebooks 29%

Websites or applications via tablet 20%

Travel professionals/agents 18%

Printed newspapers, magazines or brochures 16%

Calls to travel providers, such as airlines and hotel companies 13%

Calls/visits to city/state visitor bureaus/tourism offices 12%

Online advertising/email promotions 11%

Question: C4: What sources of information/media did you reference when comparing and choosing leisure travel products, such as airline tickets or hotel rooms? Select all that apply Base: Individual Bookers: (N=939) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Online travel booking websites/apps, such as Ctrip, Tuniu or Qunar 66%

General search engines, such as Baidu 43%

Online mall, such as Taobao or JD com 37%

Travel guide websites/apps, such as Qyer, Mafengwo com 32%

Traveler review websites/apps, such as TripAdvisor (Mao Tu Ying) or Dianping 31% Social networking websites/apps, such as Qzone, WeChat, or Sina Weibo 30%

Group buy or local service site or app, such as Meituan or Nuomi 26%

Online forum or blogs 21%

General portal websites, such as sina com or sohu com 20%

Travel provider websites/apps, such Air China or Sheraton 17%

Destination websites/apps, such as Hellola cn 14%

Question: C5: What type(s) of Internet websites/apps did you use when comparing and choosing leisure travel products? Select all that apply Base: Online Shoppers: (N=800) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

75% Ctrip 75% 61% Qunar 54% 36% Tuniu 47% 35% Alitrip/Taobao 31% 31% LY.com 32% 22% eLong 31% 21% Meituan 13% Short-Haul 10% CITS.cn 17% TripAdvisor/Mao Tu Ying 10% 16% Long-Haul 9% TravelingBestOne 11% 9% Nuomi 9% 8% JD.com 12% 6% Springtour.com 8% 6% Mangocity 7% Question: C5: What sources of information/media did you reference when comparing and choosing leisure travel products, such as airline tickets or hotel rooms? Select all that apply Base: Online Travel Website Shoppers: (N=694) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

. PCs are the most-used platform for searching and shopping, followed by mobile platforms and word of mouth. . Shopping channels used varied little based on destination visited. Notable exceptions: Visitors to Australia/New Zealand were heavier users of desktop web and printed guidebooks; visitors to Southeast Asia were heavy users of smartphone. . Among offline resources, personala) recommendations and printed guidebooks significantly outperform travel agents. . Ctrip dominates travel shopping, being used by three fourths of outbound travelers. Among its competitors, Qunar, Alitrip and Meituan were the only ones that performed better with short-haul than long-haul travelers. Sites that did better with long-distance travelers included Tuniu, CITS.cn, eLong and Maotuying (TripAdvisor).

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Online Offline

38% 35% 34% 37% 52% 62%

62% 65% 66% 63% 48% 38%

Total 18-24 25-34 35-44 45-54 55+

Question: Please indicate which method you used to book each type of travel component for your last trip? Select one response per row. Base: Chinese Outbound Travelers : (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

I wanted personal service 37%

I believe I get better customer service if something goes wrong 31%

I believe I can get better deals when I call/visit 27%

I had questions that were not answered by the website 26%

I wanted to use a particular travel agent/agency 19%

Couldn’t find the product that met destination or travel time needs 15%

I did not want to submit my credit card information online 13%

I had technical issues/got frustrated when trying to book online 13%

I didn’t trust that the information I saw online was accurate 10%

I didn’t have Internet access when I needed to book 9%

The travel provider/agency did not have a website I could use to book 9%

I didn’t trust that the booking would go through online 7%

I did not book in advance 4%

Question: C10: Why did you book some or all of your travel offline? Select all that apply Base: Offline Bookers: (N=1,516) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Australia/ Hong Kong, Northeast Southeast Americas By Region Visited New Europe Macau, TaiwanAsia Asia Zealand I wanted personal service 38% 42% 34% 37% 29% 30%

I believe I get better customer service if something goes wrong 31% 31% 34% 34% 37% 30%

I believe I can get better deals when I call/visit 26% 28% 34% 33% 30% 27%

I had questions that were not answered by the website 26% 33% 25% 23% 26% 24%

I wanted to use a particular travel agent/agency 18% 21% 22% 25% 19% 17%

I did not want to submit my credit card information online 14% 9% 13% 13% 11% 15%

Couldn’t find product that met destination or travel time needs 13% 23% 19% 18% 21% 18%

I had technical issues/got frustrated when trying to book online 13% 11% 13% 10% 13% 14%

I didn’t have Internet access when I needed to book 10% 9% 8% 9% 7% 13%

I didn’t trust that the information I saw online was accurate 9% 17% 11% 11% 11% 16%

Travel provider/agency did not have a website I could use to book 8% 10% 8% 15% 15% 18%

I didn’t trust that the booking would go through online 7% 10% 8% 5% 5% 7%

I did not book in advance 5% 3% 3% 1% 3% 2%

Website/app of OTA

Flights Website/app of supplier

Website/app of online Lodging mall or group buy site

Calling/visiting a travel agent

Car Rental Calling travel suppliers

Called an OTA Destination Activities In person

0% 20% 40% 60% Question: C6: Please indicate which method you used to book each type of travel component for your last trip? Base: Individual Bookers: (N=938) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Using a travel booking website or 53% 50% app, such as Ctrip, Qunar or eLong 41% Calling airlines directly, such as Air 13% 18% China 15% Calling a travel booking website, 12% 4% such as Ctrip or eLong 10% Using an airline website or app, 11% 12% such as Air China 14% Tier 1 Using an online mall website or app, 3% such as Taobao, Alitrip or JD com 4% 13% Tier 2 Calling/visiting a travel agent, such 3% 5% as CITS 3% Other Using a group buy or local service 2% 1% site or app, such as Meituan 2% 1% In person at the airport 6% 1% Using a social media platform such 0% 0% as WeChat 2% 2% Other 0% 0%

Question: C6: Please indicate which method you used to book each type of travel component for your last trip? Base: Individual Airline Bookers: (N=710) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

56%

41%

27%

Desktop Mobile Web Mobile App

Question: C6: Please indicate which device you used to book each type of travel component for your last international trip. Base: Individual Bookers: (N=762) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Mobile Apps Desktop 20% 47%

Mobile Web 33%

Question: C6: Please indicate which device you used to book each type of travel component for your last international trip. Base: Individual Online Bookers: Vacation Packages (N=1,165) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Desktop Mobile web via smartphone or tablet Application via smartphone or tablet

62%

49% 49% 47%

42% 41% 39% 33% 32% 32% 31% 28% 24% 25% 21% 19%

14% 12%

Air Hotel Car Rental Private Accomodation Long-Distance rail Destination Activities ticket Question: C6: Please indicate which device you used to book each type of travel component for your last international trip. Base: Individual Online Bookers: Air: (N=490); Hotel: (N=508); Car Rental: (N= 86); Private Accommodation: (N=114); Long Distance Rail (N=94); Destination Activities (N= 297) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

In person after arriving in destination 21%

Calling a car rental company directly, such as Hertz or Sixt 20%

Using a travel booking website or app, such as Ctrip, Qunar or eLong 15%

Using a car rental website or app, such as Hertz com or Sixt com 14%

Calling/visiting a travel agent, such as CITS (China International Travel… 12%

Using an online mall website or app, such as Taobao, Alitrip or JD com 7%

Calling a travel booking website, such as Ctrip or eLong 4%

Using a group buy or local service site or app, such as Meituan or… 1%

Using a social media platform such as WeChat 0%

Other 5%

Question: C6: Please indicate which method you used to book each type of travel component for your last trip? Base: Individual Car Renters: (N=801) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Using a travel booking website or app, such as Ctrip, Qunar or eLong 39%

Worked directly with the individual homeowner 17%

Using a vacation rental or shared accommodation site such as Tujia… 13%

Calling a travel booking website, such as Ctrip or eLong 8%

Calling/visiting a travel agent, such as CITS (China International Travel… 8%

Using a group buy or local service site or app, such as Meituan or… 4%

Using a social media platform such as WeChat 2%

Using an online mall website or app, such as Taobao, Alitrip or JD com 2%

Other 8%

Question: C6: Please indicate which method you used to book each type of travel component for your last trip? Base: Individual Lodging Renters: (N=201) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Using a travel booking website or app, such as Ctrip, Qunar or eLong 33%

Calling a cruise line directly (e g , Carnival, SkySea) 28%

Calling a travel booking website, such as Ctrip or eLong 12% Calling/visiting a travel agent, such as CITS (China International Travel 7% Service) Using an online mall website or app, such as Taobao, Alitrip or JD com 6%

Using a cruise line website such as Skysea com or Carnival com 5% Using a group buy or local service site or app, such as Meituan or 2% Nuomi Using a social media platform such as WeChat 1%

Other 5%

Question: C6: Please indicate which method you used to book each type of travel component for your last trip? Base: Individual Over Night Cruise Bookers: (N=80) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

In person at the train station 28%

Using a travel booking website or app, such as Ctrip, Qunar or eLong 25%

Using a rail company website, such as RailEurope com or JapanRailPass 23% com

Calling a rail company directly, such as Rail Europe or Japan Rail Pass 8%

Calling a travel booking website, such as Ctrip or eLong 8%

Using an online mall website or app, such as Taobao, Alitrip or JD com 6%

Calling/visiting a travel agent, such as CITS (China International Travel 1% Service) Using a group buy or local service site or app, such as Meituan or 1% Nuomi

Question: C6: Please indicate which method you used to book each type of travel component for your last trip? Base: Individual Rail Bookers: (N=172) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Ctrip 67%70% Qunar 55% 58% Tuniu 27% 43% LY.com 25% 38% Alitrip/Taobao 25% 32% Meituan 22% 25% eLong 21%22% Nuomi 12%14% CITS.cn 12% 20% Escorted Tour Group TravelingBestOne 9% 13% JD.com 7% 11% FIT Mangocity 7% 9% TripAdvisor/Mao Tu Ying 6%6% Springtour.com 6%7% Kuxun 5% 7% Aoyou 4% 12% Priceline/Booking/Agoda 1%3% Tianxun/Youbibi 2% 6% Expedia 1%1%

Question: C7: Which of the following sites/apps do you recall using while booking leisure travel products? Select all that apply Base: Online Bookers: (N=1839) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

I trust the brand 55%

It is easy to use 48%

It has the best prices/offers 40%

It offers the widest selection of travel options 38%

Had a good experience with this website/application before 38%

It gives me good trip ideas and options to consider 38%

It provides the most information and photography 33%

It has the best customer service 22%

It was the official website/application for the brand or destination 20%

It has my personal information stored 19%

I am a member of the company’s frequent traveler program 14%

It has no booking fees 14%

Question: C8: Why did you choose the particular website(s) you used? Select all that apply Base: Online Bookers: (N=1,839) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

82% 77% 76% 71% 69% 67% 65% 60% 57% 53% 48%

40% 41%

26% 27% 23%

18-24 25-34 35-44 45+ Credit card Bank card Alipay, WeChat Wallet/Tenpay or other online payment method Cash

Question: C11: How did you typically pay for your leisure travel component purchases (such as airline tickets and hotel rooms) in the past 12 months? Base: Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

© 2016 Phocuswright Inc. All Rights Reserved. 120 Typical Method of Payment, by Travel Product 53% 10% Hotel, motel or other paid lodging (individually, not as a package) 15% 17% 49% 6% Airline ticket (individually, not as a package) 17% 21% 46% 16% Vacation package 15% 14% 37% 19% Vacation home/apartment rental (individually, not as a package) 9% 11% 30% 23% Overnight cruise (individually, not as a package) 9% 7% 29% Destination activities such as sightseeing tours (individually, not as a 50% 8% package) 9% 24% 30% Long-distance rail ticket (individually, not as a package) 10% 17% 18% 46% Car rental (individually, not as a package) 6% 11%

Credit card Cash Bank card Alipay, WeChat Wallet/Tenpay or other online payment method

It is easy to use 51% 56% 60% 55% 51% I have had a good experience with this website/application before 43% 41% 43% 44% 41% It offers the widest selection of travel options 43% 43% 46% 47% 47%

It has the best prices/offers 42% 46% 49% 48% 47%

It gives me good trip ideas and options to consider 42% 41% 51% 50% 45%

It provides the most information and photography 35% 37% 39% 39% 42%

It has the best customer service 25% 26% 24% 29% 29% It was the official website/application for the brand or destination 22% 21% 31% 30% 26% It has my personal information stored 20% 18% 23% 22% 17%

I am a member of the company’s frequent traveler program 17% 13% 12% 15% 12%

Question: C8: Why did you choose the particular website(s) you used? Select all that apply Base: Online Bookers: (N=1,1839) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

. Offline channels remain significant. While the majority of outbound travelers book at least some travel components online, 38% booked their last trip entirely offline. . Travelers 55 and older book offline at nearly twice the rate of the overall outbound population. . Mobile is the platform of choice. The majority of travel bookings were made via mobile, whether travelers booked components individually or purchased a package. Mobile web beat out apps, used roughly 1.5 times as much.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

. OTA websites and apps own about half of standalone hotel and air bookings. For car rental and in-destination activities, booking channels were much more fragmented and more likely to be offline. . Ctrip dominates travel shopping, being used by three fourths of outbound travelers. Among its competitors, Qunar, Alitrip and Meituan were the only ones that performed better with short-haul than long-haul travelers. Sites that did better with long-distance travelers included Tuniu, CITS.cn, eLong and Maotuying (TripAdvisor). . What about Priceline and Expedia? They barely register with China’s outbound travelers, each being used by 3% or less of online bookers. Skyscanner, which is known in China as Tianxun and acquired homegrown metasearch Youbibi, performs better.

Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

. Credit cards and cash are widely used. Online payment platforms such as Alipay and Tenpay are becoming very important as well, used more by outbound travelers than bank cards (UnionPay). . Credit cards dominate for big components, pre-trip purchases (flight, hotel, vacation packages). . Online payment methods like Wechat Wallet, Alipay were also used by roughly one in five to purchase air,( lodging. For travelers aged 18-24, they are the second most prevalent form of payment after cash. . Cash is king for in-destination activities and ground transport . Bank card (aka Union Pay) usage is relatively low. It is most frequently seen in air purchases (17% of Chinese outbound travelers) and lodging (15% of Chinese outbound travelers)

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Luxury hotel/resort (five-star) 13%

Upscale hotel/resort (four-star) 34%

Midscale hotel/resort (three-star) 45%

Budget hotel/motel 24%

Hostel 15%

Residential home of friends/family 10%

Home, condo or apartment that you rented 10%

Rented room in a private home/apartment 7%

Bed & breakfast or inn 6%

Timeshare or fractional ownership property 5%

Question: A16: What type(s) of lodging did you use in this trip? Select all that apply Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

<8,000 Yuan 8,000 - 9,999 Yuan 10,000-14,999 Yuan 15,000-19,999 Yuan 20,000+ Yuan

4% 3% Luxury hotel/resort (five-star) 9% 16% 27% 18% 23% Upscale hotel/resort (four-star) 32% 44% 46% 41% 54% Midscale hotel/resort (three-star) 45% 48% 38% 37% 28% Budget hotel/motel 29% 17% 14% 21% 15% Hostel 14% 12% 16%

Question: A16: What type(s) of lodging did you use on this trip? Select all that apply Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

© 2016 Phocuswright Inc. All Rights Reserved. 128 Most Important Accommodation Features Security 60% Cleanliness 50% Value for money 49% Convenient location/proximity to key attractions 46% Free Wi-Fi 30% Staff friendliness/customer service 23% Chinese speaking staff 20% Well-known brands 19% Facilities and amenities (swimming pool, room service, etc ) 17% Complimentary breakfast 16% Design (unique/boutique look and feel of the property) 16% Privacy 16% Information/ menus available in Chinese 13% Lowest price 12% Proximity to local Chinese community 10% On-site restaurants with Chinese food 6% Chinese TV channels 5% Social opportunities – ability to meet other travelers 5% In-room kitchenette/cooking facilities 4%

Question: C3: When you chose an accommodation for your last international leisure trip, which of the following were most important to you? Base: Individual Bookers: (N=939) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Convenient location/proximity to key attractions

Chinese speaking staff

Hotel information and menus available in Chinese

Staff friendliness/customer service

Facilities and amenities

Well-known brands

Lowest price

Design

Complimentary breakfast

Proximity to local Chinese community/ Restaurants

Social opportunities – ability to meet other travelers

0% 10% 20% 30% 40% 50% 60% 70% 18-24 25-34 35-44 45+

Chinese speaking staff

Hotel brochures and menus available in Chinese

Well-known brands

Facilities and amenities

Design (look and feel of the property)

0% 5% 10% 15% 20% 25% 30% 35% 40%

Budget hotel/motel Midscale hotel/resort (three-star) Upscale hotel/resort (four-star) Luxury hotel/resort (five-star)

56% 56%

47%

21% 19% 19% 18% 19% 16% 15% 14% 15% 12%

6% 5% 1%

Budget hotel/motel Midscale hotel/resort (three-star) Upscale hotel/resort (four-star) Luxury hotel/resort (five-star) Credit card Bank card Alipay, WeChat Wallet/Tenpay or other online payment method Cash Other

Question: C11: How did you typically pay for your leisure travel component purchases (such as airline tickets and hotel rooms) in the past 12 months? Base: Hotel Stayers: (N=2,684) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

26% 25% 26% 23% 21% 22% 19% 17% 14% 15% 12% 11% 10% 11% 8% 8% 7% 5% 3% 5% 4% 1% 1% 2% 2%

Hong Kong, Macau, Northeast Asia (e g ,Southeast Asia (e g , Australia/New Europe Americas Taiwan Japan, Korea) Thailand, Singapore, Zealand Malaysia)

One day or less 2 to 6 days 1 to 2 weeks 3 to 4 weeks 1 to 2 months 3 months or longer

Question: C2: How far in advance of your departure date did you book your lodging? Base: Non-Package Hotel Bookers : (N=801) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

44% 43%

35%

29% 30% 25%

18% 19% 14% 14% 10% 6% 2% 3% 3% 2% 0% 1%

One day or less 2 to 6 days 1 to 2 weeks 3 to 4 weeks 1 to 2 months 3 months or longer

3 Nights or less 4-6 Nights 7+ Nights

. Midscale (three-star) resorts were included in nearly half of travelers’ trips. . Just over a third stayed in 4-star properties, and 13% in 5-star. Upscale experiences are an important part of travel abroad, even for not-so-affluent travelers. . Chinese-speaking staff is the most appreciated adaptation that a hotel can make for Chinese travelers, more important than Chinese restaurants or brochures/hotel informationa) available in Chinese. . As Chinese travelers go more upmarket with their lodging, attributes like brand recognition, amenities and distinctive design become more important. Younger travelers also show a higher interest in these features than do older travelers. . Travelers who made non-package hotel bookings often did so on tight lead times of a week or less, suggesting that a fair amount of hotel booking may occur in destination, during an international trip.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Shopping 73% Sightseeing tour 68% Dining out 67% Theme park or amusement park 59% Beach activities (e g , relaxing on the beach, beach volleyball) 35% Bars/nightclubs 34% Museum, gallery or cultural attraction 28% Water-related activities (e g , water sports, snorkeling, jet… 20% Mountain activities (e g , hiking, mountain biking) 19% Local festivals 19% Scenic drives 18% Ticketed music event/performance (e g , concert, play, etc ) 17% Spa 15% Wineries/distilleries 11% Ticketed sporting event (e g , basketball game, tennis match,… 9% Winter activities (e g , skiing, snow tubing, snow shoeing) 8% Golf 5%

Question: D1: What types of activities did you do while in-destination during this trip? Select all that apply Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

© 2016 Phocuswright Inc. All Rights Reserved. 137 In Destination Activities Incidence Region Visited Last Trip Hong Kong, Macau, Taiwan Northeast Asia (e g , Japan, Korea) Southeast Asia (e g , Thailand, Singapore, Malaysia) Australia/New Zealand Europe Americas

Shopping 71% 84% 77% 66% 74% 65% Sightseeing tour 66% 80% 71% 68% 75% 60% Dining out 65% 75% 72% 59% 68% 58% Theme park or amusement park 60% 61% 52% 58% 54% 60% Museum, gallery or cultural attraction 37% 41% 37% 48% 56% 42% Bars/nightclubs 33% 37% 42% 33% 37% 28% Beach activities (e g , relaxing on the beach, beach volleyball) 33% 33% 50% 51% 33% 36% Mountain activities (e g , hiking, mountain biking) 19% 19% 18% 25% 21% 17% Local festivals 18% 17% 22% 22% 23% 18% Water-related activities (e g , water sports, snorkeling, jet skiing,…18% 21% 35% 33% 21% 18% Scenic drives 18% 18% 18% 19% 23% 19% Ticketed music event/performance (e g , concert, play, etc ) 17% 14% 21% 22% 23% 21% Wineries/distilleries 11% 6% 6% 17% 23% 13%

© 2016 Phocuswright Inc. All Rights Reserved. 138 The Next Five: Top Activities by Region Beyond Shopping, Dining, Sightseeing Greater NE Asia SE Asia ANZ Europe Americas China Theme Park Theme Park Theme Park Theme Park Museum Theme Park

Museums Museums Beach Beach Theme Park Museum

Bars/clubs Bars/clubs Bars/clubs Museums Bar/club Beach

Beach Beach Museums Bars/clubs Beach Bar/club

Mountain Water-related Water- Water- Scenic Ticketed event Activities Activities related related drives, (music, sports, Activities Activities festivals, etc.) events, wine

43%

38%

Before departing for trip While in destination, one day or more in While in destination, same day as activity advance of activity

Question: D2: When did you book the activities for this trip? Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

72% 69%

Offline Online Question: D4: How did you research and/or book the following destination activities for this trip? Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Escorted Tour Group FIT Travelers

75% 70% 66% 67%

Booked and paid for activity in person 33%

Using travel booking website or app, such as Ctrip, Qunar or eLong 29%

Using an online mall website or app, such as Taobao, Alitrip or JD com 8%

Calling an activity operator directly 8%

Using a group buy or local service site or app, such as Meituan or… 7%

Calling a travel booking website, such as Ctrip or eLong 7%

Calling/visiting a travel agent, such as CITS (China International Travel… 3%

Using an activity operator website or app 2%

Using a social media platform such as WeChat 1%

Other 3%

Question: C6: Please indicate which method you used to book each type of travel component for your last trip? Base: Individual Destination Activity Bookers: (N=645) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

. Shopping, sightseeing and dining out are the most popular activities, all done by more than two thirds of travelers on their last international trip. . The largest amount of activity booking occurs during the trip, a day or more in advance. But there are also significant amounts of bookings going on pre-trip and same-day. a)( . Online and offline channels are almost equally important as research platforms and booking channels for activities.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

WeChat 85%

Qzone 66%

Sina Weibo 58%

Tencent Weibo 42%

Renren 30%

Pengyou 22%

Kaixin 21%

Douban 20%

Momo 15%

Facebook 11%

Twitter 7%

Instagram 6%

Line 4%

Question:E1: In which of the following online social networks, if any, have you actively participated in the past 12 months? Select all that apply Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Viewed friends’ travel photos and read about friends’ travels 60%

Shared photos and posts when traveling 55%

Sought travel advice from friends 53%

Looked for deals/promotions 35%

Subscribed to travel company accounts 33%

Looked for local activities 32%

Wrote about part of my travel experience on a review site such as Dianping or TripAdvisor (Mao Tu Ying) 32%

Asked questions/got advice from a travel company 29%

Connected with locals or other travelers in the destination 26%

Contacted a travel company with a complaint or customer service problem 16%

Used a social media payment platform such as WeChat Wallet 14%

Question:E2: Which of the following have you used social media for in relation to travel? Base: Chinese Social Media Users: (N=3,016) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

1 - Did not use/not important at all 2 3 - Moderately important 4 5 - Extremely important

Traveler-submitted photos 1%3% 26% 41% 29%

Interactive maps that display lodging and 1%4% 20% 48% 27% attractions

Traveler-submitted videos 1%3% 25% 45% 26%

Traveler-submitted ratings/reviews 1%7% 32% 36% 23%

Professional photos 2% 8% 31% 41% 18%

Professional ratings/reviews 2% 9% 31% 40% 18%

Professional videos 3% 7% 35% 39% 17%

Question:E3: How important were each of the following online features in helping you make travel purchases? Please rate each on a scale of 1 to 5, from did not use/not important at all, to extremely important Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

View maps/get directions 53%

Reference existing travel reservation information 41%

Research travel products such as hotel rooms or flights 38%

Post photos or videos of my trip on a social network such as… 37%

Research local attractions or activities such as restaurants and… 37%

Book/purchase travel products such as hotel rooms or flights 32%

Book/purchase local activities such as restaurants and show… 30%

Check-in for flight, hotel, train or car rental 27%

Update an online blog or contribute to an online/social travel… 27%

Submit a complaint or question to customer service with a… 21%

Communicate with other travelers or locals staying in the same… 19%

Use as a boarding pass or ticket for flight or train 19%

Make changes to existing travel reservations 13%

Write a review on TripAdvisor or another website/app 10%

Question:E4: Please indicate which of the following travel-related activities you have done online using your mobile phone during your most recent international leisure trip Select all that apply Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

View maps/get directions

Reference existing travel reservation information

Research travel products such as hotel rooms or flights

Post photos or videos of my trip on a social network such as Weibo or WeChat

Research local attractions or activities

Book/purchase local activities such as restaurants and show tickets

Update an online blog or contribute to an online/social travel forum

0% 10% 20% 30% 40% 50% 60% 70% Hong Kong, Macau, Taiwan Northeast Asia (e g , Japan, Korea) Southeast Asia (e g , Thailand, Singapore, Malaysia) Australia/New Zealand Europe Americas Question:E4: Please indicate which of the following travel-related activities you have done online using your mobile phone during your most recent international leisure trip Select all that apply Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

41% 40% 40% 37% 35% 33% 34% 32% 31% 31% 30%

24%

Research local attractions or Book/purchase local activities Research travel products such as Book/purchase travel products activities such as restaurants and such as restaurants and show hotel rooms or flights such as hotel rooms or flights shows tickets 3 Nights or Less 4-6 Nights 7+ Nights Question:E4: Please indicate which of the following travel-related activities you have done online using your mobile phone during your most recent international leisure trip Select all that apply Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

56%

47% 41%

31% 30% 27% 22%

I find it useful and My friends/family Already use their Saw it had a high I read about the I read about the I received an relevant to my recommended this website and find it ranking in the app in a travel app in a social incentive to needs convenient to app/Android store magazine or media article download this download their publication app

Question:E5: What are some of the factors that impact your decision to download a travel app? Select all that apply Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Ctrip Qunar Alitrip/Taobao LY.com Meituan Tuniu

I find this useful and relevant to my needs. 63% 63% 63% 64% 59% 57%

I am an existing user of the travel website and find it more convenient to download their app. 49% 49% 58% 52% 56% 49%

My friends/family recommended this. 47% 48% 45% 53% 50% 50%

I saw it had a high ranking in the app/Android store. 37% 35% 44% 38% 36% 42%

I read about the app in a travel magazine or publication. 33% 31% 33% 37% 38% 38%

I read about the app in a social media article. 30% 31% 30% 38% 34% 35%

I received an incentive to download this. 24% 22% 22% 27% 23% 29%

Question: E5: What are some of the factors that impact your decision to download a travel app? C7. Which of the following sites/apps do you recall using while booking leisure travel products? Select all that apply. Base: Online Bookers: (N=1,1839) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

. Social platforms are integral to travel research, experience and sharing. A majority sought friends’ travel advice through social networks, shared photos and posts during their trip, and viewed their friends’ photos and posts. . Preferred types of media for travel information are maps and multimedia shared by other travelers. Photo and video have more influence than reviews, and amateurs more than professionals. a) . Using mobile during trips to research and book travel products is fairly common, especially for local activities and for longer trips. . Chinese travelers are pragmatic about their app downloads. Usefulness and relevance was the top reason for downloading a travel app. Friends’ recommendations and previous exposure to a brand through its website were also big factors. Incentives to download were the least important factor.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

© 2016 Phocuswright Inc. All Rights Reserved. 154 A Peek at the Future Future Travel Destinations Outside of China 46% Northeast Asia (e g , Japan, Korea) 34% 43% Hong Kong, Macau, Taiwan 31% 43% Australia/New Zealand 40% 40% Europe 50%

Budget for meals 7% 8% 41% 45%

Budget for flights 10% 14% 47% 28%

Class/rating of hotels (or any other paid lodging) 6% 5% 50% 39%

Budget for hotels 8% 12% 47% 34%

Length of trips 7% 3% 35% 55%

Budget for trips 6% 8% 28% 58%

Number of trips 6% 3% 36% 54%

Not sure/Not applicable Less/Lower No change More/Higher

Financial considerations/travel is too expensive 56%

Did not have enough vacation time 51%

Language/cultural barriers 25%

Getting a visa is too complicated/difficult 22%

Getting a passport is too complicated/difficult 20%

Personal obligations/need to remain close to home 14%

No desire to travel 12%

Lack of appealing travel destinations 5%

Question: Exit1: Which of the following reasons describes why you did not travel internationally for leisure in the past 12 months? Select all that apply. Base: Chinese online survey respondents who did not travel internationally for leisure in the past 12 months (N=12,068) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Extremely Unlikely Slightly Unlikely Neutral Slightly likely Extremely likely 11% 10% 17% 37% 24% Hong Kong, Macau, Taiwan 22% 17% 22% 29% 11% Northeast Asia 21% 16% 24% 30% 10% Southeast Asia 30% 21% 26% 17% 6% Europe 29% 22% 26% 17% 5% Australia/New Zealand 31% 22% 27% 15% 5% United States/Canada 30% 25% 25% 15% 4% South and Central Asia 43% 27% 22% 6%2% Central or South America 50% 25% 18% 5%2% Africa or the Middle East 40% 28% 23% 7%2% Mexico or the Caribbean

Question: Exit2: How likely are you to travel internationally to these regions in the next two years? Base: Chinese online survey respondents who did not travel internationally for leisure in the past 12 months (N=12,068) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

55+ 6% 45-54 12% 18-24 28%

35-44 20%

25-34 34%

Question: Exit2. How likely are you to travel internationally to these regions in the next two years? Base: Chinese online survey respondents who did not but are likely to travel internationally (N=8660) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Under 4,000 RMB 14%

4,000 – 5,999 RMB 17%

6,000 – 7,999 RMB 17%

8,000 – 9,999 RMB 20%

10,000 – 14,999 RMB 21%

15,000 – 19,999 RMB 7%

20,000 – 49,999 RMB 3%

50,000 RMB or more 1%

. More than half of repeat outbound travelers plan to spend more and travel further in the next two years. . A wealthier population will mean more travelers. Cost was the number one reason cited by those who did not take an outbound trip. . More time off work could help too. Lack of vacation time was the number two barrier to international travel. . Cultural concerns and red a)tape are bigger deterrents than lack of interest or obligations at home. . East Asia (especially the Greater China region) will remain the gateway, as it was the region that non-outbound travelers said they are most likely to visit in the next two years. However, there is also strong interest in travel to ANZ, Americas and Europe among non-outbound travelers and short-haul travelers.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

. Among emerging destinations, South and Central Asia has the most near-term potential. Further out on the horizon: South and Central America; Africa and the Middle East; and Mexico and the Caribbean. . The emerging pool of outbound travelers is quite young. Among travelers who did not travel internationally in 2015 but said they are likely to in the next two years, more than 80% are under 45. More than 60% are under 35. . The emerging outbound traveler is not as wealthy as the current outbound traveler (not yet, at least), a fact which lines up with the citation of financial considerations as a reason for not traveling internationally in the past.

Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

I am not at all familiar with English 4%

I know a few words 6%

I know common words/phrases, but would have difficulty communicating in English 29%

I can understand most English 42%

I feel very comfortable communicating in English 19%

Question:F5:How would you rate your level of English proficiency? Please select one response Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Guangdong 19% Shanghai 14% Beijing 8% Sichuan 8% Shandong 8% Jiangsu 7% Hubei 4% Zhejiang 4% Fujian 3% Liaoning 3% Hebei 3% Chongqing 3% Tianjin 2% Henan 2% Shanxi 2% Hunan 2% Yunnan 2% Anhui 1% Heilongjiang 1% Guangxi 1% Shanxi 1%

Question:F6: What province do you live in? Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Gender Age Male Female 18-24 25-34 35-44 45-54 55+

6% 6% 16%

44%

30% 56%

42%

Question: SA;SB: How old are you? What is your gender Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Under 4,000 RMB 1%

4,000 – 5,999 RMB 3%

6,000 – 7,999 RMB 8%

8,000 – 9,999 RMB 14%

10,000 – 14,999 RMB 30%

15,000 – 19,999 RMB 22%

20,000 – 49,999 RMB 18%

50,000 RMB or more 3%

Question: SD: What is your approximate total monthly household income? Select one. Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Employment Education Doctorate or Retired 2% professional post- 1% graduate degree

Unemployed 0% Master’s degree 9%

Full-time student 3% Undergraduate degree 65% Full-time homemaker or care provider 1% Some university 20% Employed full-time 80%

High school graduate 4% Employed part-time 1%

Self-employed 12% Less than high school 1%

Question:F1;F4: Would you say you are: Select one. What is the highest level of education you have completed? Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

Seven or more people 1%

Five - six people 15%

Three - four people 66%

Two people 10%

One person (myself) 8%

Question:F2: How large is your household? Select one. Base: Chinese Outbound Travelers: (N=3,043) Source: Phocuswright’s China Unbounded: The Rapid Rise of China’s Outbound Millions Special Project

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Thank you!

Cees Bosselaar Vice President Business Development [email protected]