Market and Trade Profile

Market and Trade Profile China

China Market and Trade Profile China

Overview

• Chapter 1: Inbound market statistics provides insights on key statistics about Chinese travellers and who they are. It takes a look at Britain and its competitive set as well as activities of Chinese visitors in the UK.

• Chapter 2: Understanding the market takes a close look at Chinese consumer trends, booking, planning and further travel behaviour of this source market. Perceptions of Britain held by the Chinese are also highlighted.

• Chapter 3: Access and travel trade shows how the Chinese travel to the UK, how to best cater for their needs and wants during their stay and gives key insights into the Chinese travel trade. Further ways of working with VisitBritain and other useful research resources are pointed out.

2 Market and Trade Profile China

Contents

Chapter 1: Market statistics 1.1 Key Statistics 6 1.2 Visitor demographics 16 1.3 Britain & competitors 20 1.4 Inbound activities 22

Chapter 2: Understanding the Market 2.1 Structural drivers 30 2.2 Consumer trends 34 2.3 Booking and planning 37 2.4 Reaching the consumer 40 2.5 Perceptions of Britain 45

Chapter 3: Access and Travel Trade 3.1 Access 53 3.2 Travel trade 57 3.3 Caring for the consumer 61 3.4 Working with VisitBritain 64 3.5 Useful resources 65

3 Market and Trade Profile China

Chapter 1: Inbound Market Statistics

4 Market and Trade Profile China

1: Inbound market statistics Chapter summary • China is the most valuable market for international tourism expenditure with US$261.1bn spent abroad in 2016 by Chinese travellers. In 2016 China was the • The Chinese outbound market is booming: visits abroad more than doubled in 5 years, from about 41m overnight most stays in 2011 to 85m in 2016. By 2020, it is forecast to exceed 110m trips overseas. valuable • Hong Kong and Macao are usually the most visited destinations by Chinese travellers. With more of them now outbound market venturing further away, the USA, France, Germany and Australia were the most popular destinations outside of Asia for Chinese visitors in 2016. • China was the 24th largest inbound source market for the UK in 2016, and the 12th for spend. Chinese visitors could be good advocates for Britain as 73% would be ‘extremely’ likely to recommend Britain for a .

Source: International Passenger Survey by ONS, Oxford Economics, UNWTO.

5 Market and Trade Profile China

Chapter 1.1: Key statistics

Key insights • China was the 24th largest inbound source market for the UK in 2016, and the 12th for spend. • 2016 was a record year in terms of nights spent in the UK for the Chinese market, but it was the second-best for visits and spend, after 2015 reached record levels for both. £513m • 46% of Chinese visits to the UK were made by spent in the UK in 2016 holidaymakers in 2016. • Business visits’ share of inbound (18% of 2016 visits) has more than halved compared to ten years ago (41% in 2006). • In 2016 Chinese visitors spent 65% of their nights in the UK outside of London. • Students make up 42% of the nights spent by Chinese visitors in the UK: China is a key market for study tourism. • Chinese visitors in the UK like going shopping, visiting parks and gardens, as well as museums and art galleries.

Source: International Passenger Survey by ONS

6 Market and Trade Profile China

1.1 Key statistics

Global context Inbound to UK overview

Measure 2016 Measure Visits Nights Spend (000s) (000s) (£m) International tourism 261.1 10 year trend (06-16) +143% +276% +394% expenditure (US$bn) 2006 107 1,376 104 Global rank for international 1 2007 143 2,856 177 tourism expenditure 2008 108 2,312 137 Number of outbound visits (m) 85.0 2009 89 1,166 117 2010 109 2,303 184 Number of outbound visits, 57.3 2011 149 2,906 240 excl. Hong Kong and Macao (m) Hong 2012 179 4,000 300 Most visited destination overall Kong 2013 200 4,918 503 Most visited destination overall Thailand 2014 185 4,486 497 (excl. Hong Kong and Macao) 2015 Most visited destination in 270 3,929 586 France Western Europe 2016 260 5,166 513 Share of UK total in 0.7% 1.9% 2.3% 2016 Source: International Passenger Survey by ONS, Oxford Economics, UNWTO.

7 Market and Trade Profile China

1.1 Key statistics – volume and value

Inbound volume and value Nights per visit, spend

Measure 2016 Change Rank out of Averages by Nights Spend Spend vs. 2015 UK top journey purpose per per per markets in 2014-2016 visit night visit

Visits (000s) 260 -3% 24 Holiday 10 £157 £1,507

Nights (000s) 5,166 31% 13 Business 12 £185 £2,138

Visiting Friends/ Spend (£m) 513 -12% 12 18 £75 £1,328 Relatives

Average nights 20 +36% 7 Study 98 £93 £9,162 per visit Average spend 1,972 -9% 8 per visit (£) All visits 19 £118 £2,233

Source: International Passenger Survey by ONS

8 Market and Trade Profile China

1.1 Key statistics: journey purpose

Journey purpose 2016 Journey purpose trend (visits 000s)

60% 160 50% 46% 140 120 120 40% 37% 31% 100 24% 80 30% 22% 18% 60 57 20% 47 8% 40 6% 6% 21 Share Share ofvisits 10% 20 1% 16 0% 0 Holiday Business VFR Study Misc.

Holiday Business VFR Study Misc. China All markets

• 46% of all visits to the UK from China were made • Holiday visits have led the volume growth in the Chinese for holiday purposes, followed by 22% by those market since 2012. In 2015, there were more Chinese visiting friends and relatives in 2016. holiday visits than all other purposes added together for • China is still a growing market: in 2015, only 30% of the first time ever, reaffirming this trend. holiday visits from Chinese residents (excluding • While there were slightly more business visits from China British expats) to the UK were made by repeat in 2016 than in 2006, their proportion of all visits has visitors, compared to 63% across all markets. more than halved in 10 years (from 41% in 2006, when • On average a Chinese holidaymaker came 1.6 they were the leading purpose of visits, to 18% in 2016). times to the UK in the past 10 years. • In 2016 there were even more visits to friends and family (VFR) than business visits. VFR visitors are more likely to be repeat visitors than holiday visitors. Source: International Passenger Survey by ONS; repeat / first time visitors question asked in 2015 9 Market and Trade Profile China

1.1 Key statistics: seasonality

Seasonality 2016

47% 50% • Visits from China are very seasonal: in 2016 47% of all 40% visits from China were made in -September. 28% 30% 27% 25% 23% • Visits during the summer started driving the growth in 20% 16% 2012, around the same time as holiday visits started 20% 14% growing more than other journey purposes. Seasonal 10% Share Share ofvisits direct flights between China and the UK also supported 0% this trend. Jan-Mar Apr-Jun Jul-Sep Oct-Dec • In recent years, October-December has become the China All markets second-most popular time to visit the UK. At the beginning of October, there is a week of public holidays Seasonality trend (visits 000s) in China known as the . 140 120 123 100 80 60 59 40 42 35 20 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: International Passenger Survey by ONS Jan - Mar Apr - Jun Jul - Sep Oct - Dec

10 Market and Trade Profile China

1.1 Key statistics: length of stay and accommodation

Accommodation stayed in Duration of stay trend (average nights in 2014-2016, % share) (average visits in 000s in rolling 3 years ending in…) 80 71 1% 60 60 16% 0.3% 19% 40 36 2% 1% 20 0.2% 7% 1 0

Nil nights 1-3 nights 4-7 nights 27% 8-14 nights 15+ nights 27% • As a long haul destination, Chinese travellers tend to stay for a medium or long trip, and are less likely to stay 1-3 nights. Bed & Breakfast Free guest with relatives or friends • Trips of 15+ nights are also quite popular, especially for Holiday village/Centre Hostel/university/school VFR and study visits. Hotel/guest house Other • 64% of all staying visits included a stay in a hotel or a Own home Paying guest family or friends house guest house in 2014-2016. However, Chinese visitors spend more nights in a hostel/university/school or a Camping/caravan Rented house/flat rented house/flat (43% of all nights respectively), mainly Source: International Passenger Survey by ONS because of the number of nights spent by study visitors.

11 Market and Trade Profile China

1.1 Key statistics: regional spread Nights (% share, 2014-2016) Visits to the UK (2014-2016 average) Region Nights stayed Visits (000) (000) Total 4,527 238

Scotland (SC) 393 41

Wales (WA) 99 5

Northern Ireland (NI) 23 2 SC 9% London (LDN) 1,371 144 NE NW 6% North East (NE) 249 7 NI 12% 1% YO North West (NW) 562 39 4% Yorkshire (YO) 189 14 EM West Midlands (WM) 327 20 3% WM WA EoE East Midlands (EM) 117 9 7% 2% 5% East of England (EoE) 204 19 LDN SW SE 30% South West (SW) 265 17 6% 16%

South East (SE) 719 38

Nil nights (Nil) N/A 1 Source: International Passenger Survey by ONS 12 Market and Trade Profile China

1.1 Key statistics: regional spread and top towns and cities

Top towns and cities visited (2014-2016 average) • Chinese visitors show an above-average spread across the UK‘s nations and regions. London is the Town Overnight visits (000s) leading destination for a staying trip to Britain, but the South East, North West and Scotland are also popular. London 144 • Indeed 70% of all nights spent by Chinese visitors in Edinburgh 35 the UK in 2014-2016 were spent outside of London, compared to 60% for the all-inbound market average. Manchester 23 • If we consider the regional spread by purpose of visit, Cambridge 14 54% of nights spent in the UK by Chinese Oxford 13 holidaymakers were spent in London in 2014-2016. However, over half of the nights for each of the other purpose of visits were spent in the rest of England. Regional spread (2014-2016) • Visits from China have an above average propensity to 70% 58% feature rural and coastal areas of Britain. 60% 48% 50% 40% Propensity to go to the coast or beaches, 40% 30% 30% countryside or villages (2016) 20% 15% 9% 8% All journey purposes: Went to the

Share Share ofnights 10% 2% 3% 0.5% 1% coast or beaches 10% 0% Scotland Wales London Rest Of Northern England Ireland All journey purposes: Went to 22% countryside or villages 13% China All markets

Source: International Passenger Survey by ONS. 0% 10% 20% 30% China All markets 13 Market and Trade Profile China

1.1 Key statistics: use of internal modes of transport

Propensity to use internal modes of transport

2% Ferry/boat 2% Car/vehicle you/group brought 1% to the UK 15% 5% Hired self-drive car/vehicle 8% Private coach/minibus (for 10% group only) 4% Public bus/coach (outside 13% town/city) 8% 44% Taxi 32% 41% Train (outside town/city) 28% Bus, Tube, Tram or Metro Train 64% (within town/city) 53% 4% Domestic flight 2%

0% 10% 20% 30% 40% 50% 60% 70%

China All markets Source: International Passenger Survey by ONS (2013)

14 Market and Trade Profile China

1.1 Key statistics: purchase of transport and package tours

Transport services purchased before or • Chinese visitors are more likely than the average to take taxis or to take public transport when staying in a during trip (%) town or a city, with 44% and 64% respectively doing so, compared to 32% and 53% respectively for the all- 60% market average. 54% 52% • When getting out of a town or city, they are also more 49% 50% 47% likely to get on a train (41%), but also to take a public 45% 42% bus or coach (13%), or even a private one for a group 39% 40% 37% (10%). However they are less likely to drive a car 36% 35% within the UK, compared to other markets. 31% 29% 29% 30% 30% 27% • Usually they also tend to prefer booking those 26% 25% 27% 24% transport elements before they travel, with more 20% Chinese holiday visitors booking their airport transfer, 15% train or coach travel, and rental cars before the trip

10% than during.

0% Pre During Pre During Pre During Pre During Pre During Transport within Train Travel Airport transfer Coach travel Car hire London

China All markets

International Passenger Survey by ONS, VisitBritain/IPSOS 2016, base: visitors

15 Market and Trade Profile China

1.2 Visitor demographics

Visitor characteristics • The average Chinese visitor is younger than the all-market average visitor: 51% of the 2014-2016 visits from China were made by people aged 0-34 years old. The 25-34 and 73% 35-44 year-old segments are leading the growth in visits for of all 2015 Chinese visitors this market. were ‘extremely’ likely • The overall gender ratio of visitors is evenly balanced. to recommend Britain However, when looking at trips by journey purpose, there are more women than men for every journey purpose except for business visits. • Most inbound visits to the UK from Chinese residents were made by Chinese nationals (85% of all visits), but 21% of VFR visits were made by British nationals in 2016. • Less than a third of the holiday visits are repeat visits (excluding British expats). • Chinese visitors are more likely to advocate for a stay in Britain than the all-market average: 73% of Chinese past visitors are ‘extremely’ likely to recommend it, against 69% across all inbound markets.

Source: International Passenger Survey by ONS.

16 Market and Trade Profile China

1.2 Visitor demographics: gender and age groups

Visitor demographics: Age group trend gender ratio of visits from China for 2014-2016: (average visits in 000s on rolling 3 years ending in) 50% female, 50% male 70 66 Female (% share of visits by journey purpose) 60 80% 54 63% 54% 56% 60% 51% 51% 53% 51% 42% 50 40% 30% 20% 43 20% 40 0% Business Holiday VFR Study Misc. 30

China All markets (000s)Visits Male (share of visits by journey purpose) 20 100% 80% 15 80% 70% 10 12 56% 60% 46% 49% 49% 44% 47% 49% 5 37% 40% 0 0 20% 2004 2007 2010 2013 2016 0% 0 -15 16-24 25-34 Business Holiday VFR Study Misc. 35-44 45-54 55-64 China All markets Source: International Passenger Survey by ONS 65+ Not Known

17 Market and Trade Profile China

1.2 Visitor demographics: origin

Visits to the UK in (000) 2013 • Chinese visitors mainly come from the two major metropolitan areas: and Shanghai. • Other main cities are also represented: 8% of visits originated in Guangzhou-Shenzhen- Dongguan, for example. Residents from top 2 and top 3 cities are also represented (3% of visits were made by people from Nanjing, 2% from Chengdu). • Connectivity reflect these key Chinese source cities. Visits in 000s | % share of visits

High Medium Low

Source: International Passenger Survey by ONS

18 Market and Trade Profile China

1.2 Visitor demographics: welcome and recommending Britain

Feeling of ‘welcome’ in Britain Likelihood to recommend Britain

60% 80% 73% 69% 49% 70% 50% 43% 60% 39% 40% 50% 32% 30% 40% 25% 30% 20% 26% 23% 12% 20% 10% 10% 3% 4% 0% 0% 0% 0% 1% 1% 0.2% 0.4% 0% 0% Extremely Very Quite Not very Not at all Extremely Likely Neutral Not likely Not likely at welcome welcome welcome welcome welcome likely all

China All markets China All markets

Source: CAA 2016, IPS 2015

19 Market and Trade Profile China

1.3 Britain and competitors

Market size, share and growth potential • The UK was the 30th most visited destination by Chinese residents in 2016. • Forecasts suggest there is the potential for steady growth in the number of visits to the UK during the next decade. • Of those who came to the UK for a holiday, 44% considered Britain France, 31% Germany and 27% Italy as an alternative holiday destination. ranks 30th • France is the most visited destination by the Chinese in for Chinese outbound Europe. However, it has lost some market share when destinations by volume compared to other destinations, and there were fewer visits from China in 2016 than in 2015. At that time, France might have been impacted by the recent terrorist attacks as safety is a key concern across Chinese international travellers. • Overall more Chinese tourists are venturing long haul than before. The percentage share of visits to Northeast Asia is decreasing: from 65% of all outbound visits in 2011 to 55% in 2016.

Source: Oxford Economics, VisitBritain/IPSOS 2016.

20 Market and Trade Profile China

1.3 Britain and competitors

UK’s market share of Chinese visits among Historic and potential visits to UK (000s) competitor set

China 28% United States 12% 600 19% France 31% 13% 500 484 Germany 17% 11% Australia 12% 400 8% Switzerland 5% 6% 300 Canada 6% 6% Netherlands 4% 200 4% New Zealand 4% 100 2% United Kingdom 4% 2% Italy 5% 0 0% 5% 10% 15% 20% 25% 30% 35%

2016 2006

Source: Oxford Economics

21 Market and Trade Profile China

1.4 Inbound activities

Inbound Britain • Shopping is the number one activity which most Chinese visits will feature, followed by visiting parks or gardens, and museums or galleries. • Built heritage sites, especially castles and historic houses, are important attractions for many visitors from China too. • Chinese visitors are more likely than other visitors to go to a theatre, a show, live music event or a festival while in Britain. • Walking in the countryside or by the coast is also more popular among Chinese visitors than the all-market average. • The Chinese also have a special interest in British football teams.

Source: International Passenger Survey by ONS

22 Market and Trade Profile China

1.4 Inbound activities

Propensity to visit museums Propensity to visit built heritage sites or art galleries

41% Holiday: visited religious buildings 56% 35% Holiday 55% 48% Holiday: visited castles/historic houses 48%

All journey purposes: visited religious 29% 44% buildings 20% All journey purposes 28% All journey purposes: visited castle/historic 43% houses 28%

0% 20% 40% 60% 0% 20% 40% 60% China All markets China All markets

Source: International Passenger Survey by ONS (2016)

23 Market and Trade Profile China

1.4 Inbound activities

Propensity to attend the performing arts Number who went to watch football live during trip (000s)

5% All journey purposes: Attended a festival 3% 2.2 All journey purposes: Went to the 12% theatre/musical/opera/ballet 9% 1.8 4% Holiday: Attended a festival 4% 1.7

Holiday: Went to the 15% theatre/musical/opera/ballet 14%

0% 5% 10% 15% 20% 0.0 0.5 1.0 1.5 2.0 2.5 China All markets Holiday Business VFR

Source: International Passenger Survey by ONS

24 Market and Trade Profile China

1.4 Inbound activities

Propensity to go for a walk along the Propensity to visit a park/garden coast or in the countryside or a National Park

15% 18% Holiday: Visiting a Holiday: Walking along the coast National Park 11% 11%

54% 26% Holiday: Visiting Holiday: Walking in the countryside parks or gardens 26% 50%

12% All journey 13% All journey purposes: Walking along purposes: Visiting a the coast 8% National Park 7%

22% All journey 44% All journey purposes: Walking in the purposes: Visiting countryside 20% parks or gardens 32%

0% 5% 10% 15% 20% 25% 30% 0% 20% 40% 60%

China All markets China All markets

Source: International Passenger Survey by ONS (2007, 2010, 2016)

25 Market and Trade Profile China

1.4 Inbound activities

Propensity to go cycling or to take part Propensity to go to a pub in sports activity

29% 3% Holiday: went to pub Holiday: Sports activities 50% 3%

All journey purposes: 39% went to pub 1% 46% Holiday: Cycling 2% 0% 20% 40% 60% China All markets 2% All journey purposes: Sports activities Propensity for visit to include an English 2% language course

3% 43% Study visitors All journey purposes: Cycling 61% 1% 11% Holiday visitors 0% 1% 2% 3% 4% 6%

China All markets 0% 20% 40% 60% 80% China All Markets Source: International Passenger Survey by ONS

26 Market and Trade Profile China

1.4 Inbound activities

Propensity to go shopping during visits Propensity to purchase selected items to the UK

None of these 24% 38% Other holiday souvenir (not mentioned 18% above) 16% Items for your home e.g. furnishing 3% 65% 3% Electrical or electronic items e.g. camera 6% 3% CDs, DVDs, computer games etc 6% 83% 5% Food or drink 28% 24% Games, toys or gifts for children 11% 48% 9% Books or stationery 21% 13% Cosmetics or toiletries e.g. perfume 19% 61% 12% Bags, purses etc 26% 9% Personal accessories e.g. jewellery 19% 10% 54% Clothes or Shoes 41% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% All journey purposes VFR Business Holiday China All markets Source: International Passenger Survey by ONS

27 Market and Trade Profile China

Chapter 2: Understanding the market

28 Market and Trade Profile China

2.Understanding the market

Chapter summary • China has the largest population in the world, with growing young middle and affluent classes. Most Chinese live in large urban areas. Culture • Hong Kong and Macao welcomed a third of Chinese outbound visits Most important in 2016; Northeast and Southeast Asia accounted for 77%. However, draw for Chinese Chinese middle and upper classes now explore destinations further visitors away than ever before and this trend is set to grow. • There are few public holidays in China, but going away is a key aspiration: it is an opportunity to show your social status and learn. • They have a very short lead-in time: 61% of past visitors to Britain booked their trips 2 months to few weeks before their departure. • Word-of-mouth is the most important influence on destination choice. • The Chinese rate Britain highly for its cultural heritage and contemporary culture, associating Britain strongly with museums and films. They are mostly interested in symbolic elements: the Royal Family, Shakespeare, Sherlock Holmes, Harry Potter and Downton Abbey. Source: World Bank, Oxford Economcis, VisitBritain/IPSOS 2016, GfK Anholt Nation Brands Index 2016, VisitBritain/Olive Insight 2015

29 Market and Trade Profile China

2.1 Structural drivers

Demographics & society • With a population of around 1.4 billion, China is still the most populated country in the world. However, with an ageing population, it is set to be overtaken by India by 2030, and the population will start to decline. 1.4bn Chinese • Standard Chinese or Mandarin is the nationwide official language. However some regions may use others, such as Cantonese (or Yue) population which is Guangdong’s official language. • The Chinese economy is still growing rapidly. In 2015, for the first time, the number of High Net Worth Individuals (HNWIs, those with investable assets worth more than US$1million) surpassed 1 million people. • The rapid increase of Chinese urban income is expected to drive overall income growth. Spending is broadening beyond consumer staples: Chinese people now spend around 9.2% of their personal spending on “Fun”, which includes travelling. • In 2014, it was estimated that only 4% of the Chinese population had a passport. By 2025, this number is expected to reach 12%.

Source: Oxford Economics, UN revised 2015 World Population Prospects, UN 2017 World Population Prospects, Capgemni World Wealth Report 2016, Goldman Sachs‘ 2015 Chinese consumer profile & 2015 ‘The Chinese Tourism Boom‘ report, CIA World Factbook 2017

30 Market and Trade Profile China

2.1 Structural drivers: population and economic indicators

Population dynamics Economic indicators (% growth unless stated)

Measure 2016 estimate Indicator 2016 2017 2018

Total population 1,404,132,000 Real GDP 6.7 6.6 6.1

Overall growth rate vs. +0.5% Consumer spending 8.0 7.2 6.9 2015 Unemployment rate 4.0 4.0 4.0

Indicator 1980 2015 2030 Disposable income 8.6 8.5 8.6

Consumer prices 2.0 1.5 2.0 Fertility rate (over 5 3.00 1.60 1.69 years ending in…) Median age 21.7 37.0 43.2

Source: Oxford Economics, UN revised 2015 World Population Prospects, UN 2017 World Population Prospects, CIA World Factbook 2017

31 Market and Trade Profile China

2.1 Structural drivers: general market overview

General market conditions

• China is the UK’s 24th largest source market in terms of visits • McKinsey’s ‘Urban World: Global Consumers and 12th most valuable for spend. The UK received the Report’ predicts that Beijing and Shanghai are set to ‘Approved Destination Status’ (ADS) in 2005, making it have among the largest rates of consumption possible for Chinese nationals to travel here more easily. growth between 2015 and 2030. Guangzhou and • The Chinese economy has dramatically changed over recent Shenzhen are also on McKinsey’s Tier 1 in terms of decades and the economy of the world’s most populated household consumption of services in China. country keeps growing. However, in recent years economic Tianjin, which now offers direct, stopping flights to growth has slowed down from previous highs and tier 2 and the UK, is also quoted as a key city for consumption tier 3 cities have been largely helping to sustain the real estate growth. market. • Capgemini’s World Wealth Report suggests that in 2015 Chinese HNWIs (High Net Worth Individuals) Key demographic and economic data surpassed 1 million people for the first time, up 16% Measure (2016 data) China on 2014 to 1,034,000 HNWIs, meaning that it ranks in 4th place behind the US, Japan and Germany. Population (m) 1,404 • The Chinese population is set to increase slightly GDP per capita PPP (US$) 13,802 until 2030 when it is forecast to start decreasing. Annual average GDP growth The fertility rate in China is indeed under the 9.0 over past decade (%) threshold for population renewal, as a consequence Annual GDP growth of the one-child policy, although this was softened in 6.7 in 2016 (%) 2013. The Chinese population is also showing signs Source: Oxford Economics, UN revised 2015 World Population Prospects, UN 2017 World Population Prospects, of ageing, with a median age above the global and Capgemni World Wealth Report 2016, McKinsey’s ‘Urban World: Global Consumers Report’ (April 2016) Asian averages.

32 Market and Trade Profile China

2.1 Structural drivers: exchange rate trends

Exchange rate trends (cost of GBP in CNY)

18.00

16.00

14.00

12.00

10.00

8.00

6.00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Please find the most up-to-date exchange rate trend based on monthly averages at visitbritain.org/visitor-economy-facts.

Source. Bank of England

33 Market and Trade Profile China

2.2 Consumer trends

• More and more Chinese people have access to travel: the growing urban middle-class lead this trend. Goldman Sachs’ estimates reveal that about 4% had a passport in 2014, but 53% this is forecast to reach 12% by 2025. This means that •Internet penetration around 150m Chinese people would be able to travel to rate in China in 2016 other outbound destinations than Macao and Hong Kong. •Smartphone share of • As Chinese travellers are getting more like their Western mobile users in 2016 counterparts, new trends emerge. With new visa-free destinations or easier application processes, the FIT segment is growing. Family travels, experiences and winter sports are also gaining momentum. • Use of internet in China is booming: according to the CNNIC, as of December 2016 there were 731m Internet users in China, up 43% on 2011 and up 434% on 2006. • 53% of mobile users in China were using smartphones in 2016. • Travel mobile apps are especially appreciated among the Generation Y luxury travellers: 35% will use WeChat shares by travel advisers as their travel information source, and 37% apps’ push messages.

Source: Goldman Sachs‘ 2015 Chinese consumer profile, COTRI for China Daily and Forbes, Switzerland Tourism for TrekkSoft, CNNIC‘s 39th report (January 2017), Statista.com, 2016 Chinese Luxury Travellers by Marriott and Hurun Report.

34 Market and Trade Profile China

2.2 Consumer trends: overall travel trends

Motivation and attitudes to holidays • China’s outbound market is booming. There were over • Approved destination status countries have multiplied, 85m international visits made from China in 2016, enabling the Chinese to travel to newer destinations. making it the third largest market in volume of Every year, more countries are changing their access international arrivals after the US and Germany. It is rules for Chinese travellers in order to tap into the world’s forecast to overtake Germany by 2021. most valuable outbound market. At the end of 2015, 45 • The rising urban middle class in China is primarily countries were already granting visa-on-arrival for Chinese responsible for the growth of the outbound travel tourists. market. In 2013, about 11% of China’s population could • Ahead of the 2018 EU-China tourism year, European be considered as part of the middle class. With 9% of countries, including the UK, Italy and France, have Chinese personal spending going on recreational followed this trend and have lowered the threshold for the activities, spending on ‘fun’ activities, which includes approval of certain visas and simplified the visa issuing travel, is much lower than in other countries. However, procedure to attract more Chinese tourists. the young urban mass affluent segment that is set to • Among the most valuable tourists from China are the grow in the coming years are already the ones young (born after 1980), affluent Chinese travellers. The spending more on those activities, making a sizeable 2016 Hurun report shows that Europe was their most growth opportunity for the Chinese outbound market. visited tourist destination in 2016 and is set to remain so • To support that growth in international visits, more and for the next three years. more Chinese people are becoming passport owners: from 4% in 2014 to 12% by 2025, according to Goldman Sachs.

Source: Oxford Econmics, UNWTO, Goldman Sachs‘ 2015 Chinese consumer profile & 2015 ‘The Chinese Tourism Boom‘ report, COTRI, China Daily, 2016 Chinese Luxury Travellers by Marriott and Hurun Report.

35 Market and Trade Profile China

2.2 Consumer trends: overall travel trends

Travel trends among Generation Y luxury travellers • According to Marriott/Hurun, luxury travellers aged 18-36 • For 36% of these young luxury travellers the National Day would spend RMB420,000 on travel per household on Golden Week that takes place at the beginning of October average (about £47,740). In the coming years, exploring is their favourite time to travel – reaffirming the opportunity the world, going on an adventure, a cruise, a polar offered by this week-long . The exploration, or a road trip will become more popular: they Chinese is also becoming more of a travel like experiences they can brag about. But in 2015 shopping period for those affluent travellers who have a family. was still an important part of their travel experience • Travelling with family and friends is indeed a growing representing over half of their travel spending. trend: 89% of those interviewed quoted that as their most • In 2015, 82% of this group travelled for leisure. Other key memorable experience. Friends also play an important travel motivations include exploring the world (40%), going part in the choice of the destination as 40% of the on an international cruise (26%) or an adventure trip (23%). respondents to the Hurun survey were inspired to travel • They also travel abroad for other motives than leisure: by their friends, just ahead of online sources of information leisure holidays only represented 69% of their time abroad (36%), travel agencies (34%) and their family (33%). in 2015 (17 days of their 25 days abroad on average). • 70% of them will prefer using the services of a travel • They are experienced travellers: they have already visited agency for the personalised services they offer, 57% for 13 countries on average. In 2015, 61% of them went to their expertise, and 54% for itinerary planning. Europe. The UK was their 11th most visited destination and • However, online booking methods have also become their 7th most memorable destination. France is usually more popular: 41% booked their hotels through a third- preferred as a shopping destination, however. Japan and party reservation website, 30% via a travel agency and Australia are also among their favourite destinations. 25% on the hotel website. This also shows how those travellers are becoming more independent in arranging Source: 2016 Chinese Luxury Travellers by Marriott and Hurun Report. their travel details.

36 Market and Trade Profile China

2.3 Booking and planning

• Chinese travellers have a very short lead-in time: 61% of past visitors to Britain booked their trips 2 months to few weeks before their departure. 76% • However 53% had decided to visit Britain over of Chinese visitors to Britain booked their trip 3 months before their date of travel. less than 2 months in • They are more likely than average to plan their advance trip with precision before leaving their country. • When travelling to Britain, they would prefer to book travel and accommodation together, mostly online. • They would also be more likely to purchase tickets for their activities before they travel.

Source: VisitBritain/IPSOS 2016

37 Market and Trade Profile China

2.3 Booking and planning: booking channels and ticket sales

How trips to Britain were booked Propensity to make a purchase before or during trip

0% 100% 6% 2% 5% 60% 54% Don’t know 51% 50% 90% 6% 17% 48% 48% 14% 50% 80% 10% 4% Did not book – stayed with 40%41% 70% 10% friends / relatives 40% 30% 30% 31% 60% By phone 28% 28%29% 30% 24% 24% 50% 23% 22% Face to face 19% 20% 40% 78% 81% 14% 67% 11% 30% Online 10% 20% 0% 10% Pre During Pre During Pre During Pre During Pre During 0% Theatre / Sporting event Guided Guided Tickets / passes Travel Accommodation Holiday Musical / tickets sightseeing sightseeing for other tourist (travel and Concert tickets tours in London tours outside of attractions accommodation) London China All markets

• Online bookings are the Chinese travellers‘ favourite booking • Chinese visitors tend to book their various travel elements methods when arranging their travel to Britain. before they start their journey, especially for guided • Chinese visitors to Britain still tend to book their travel to Britain sightseeing tours and tickets to other tourist attractions. and accommodation together (71% of visitors). • 89% of Chinese international travellers tend to plan their • Among those who booked them separately, the Chinese share holiday abroad carefully before they leave China, which is of visitors who stayed with friends or relatives is on par with the above the all-market average (70%). all-market average. Source: VisitBritain/IPSOS 2016, base: visitors (if not otherwise specified). Online survey.

38 Market and Trade Profile China

2.3 Booking and planning: lead-times

Decision lead-time for visiting Britain • The Chinese tend to think about a trip to Britain fairly early as 42% of visitors to Britain started to think about it more than six months before the trip. An 50% additional 33% did so in the three to six months 44% 45% 42% window before the trip. 40% • Just over half had decided to travel to Britain either 35% 34% 35% 33% 32% three months before their trip or earlier. This is below 30% 29% 30% the all-market average, showing the short lead-in time 24% 25% of Chinese travellers to Britain.

20% 18% 18% • They would also start looking at options and prices for 15% 15% 13% their trip to Britain later than the all-market average 10% 10% 8% with a third doing so 3 months or more in advance of 6% 5% 3% 3% their trip, about another one in three 1-2 months 1% 2% 0% before and the rest less than 1 month before. 6+ months 3-6 months 1-2 months Less than 1 Don't know • Finally, 76% of Chinese past visitors to Britain had before trip before before month before booked their trip less than 2 months ahead. % starting to think about trip at each stage • Booking through a travel agent, tour operator or travel

% deciding on the destination at each stage comparison website is usually preferred to booking directly with the carrier/provider, whether Chinese % looking at options/prices at each stage visitors to Britain chose to book travel and % booking the trip at each stage accommodation together or separately.

Source: VisitBritain/IPSOS 2016, base: visitors

39 Market and Trade Profile China

2.4 Reaching the consumer

• Talking to friends, relatives and colleagues is the key source of influence for Chinese travellers trying to decide on their holiday Word-of- destination. mouth • Travel agent or tour operators – whether #1 Influence for the through direct advice or via websites – have destination choice almost as much influence as word-of-mouth. of Chinese • Travellers’ destination reviews on websites international travellers completes the Chinese top 3 influences. – followed by travel agents/operators • Compared to other markets, the Chinese travellers tend to be more influenced by TV travel programmes, TV adverts, and also their traditional travel agent or tour operator through discussions or their brochures.

Source: Oxford Economics, VisitBritain/IPSOS 2016.

40 Market and Trade Profile China

2.4 Reaching the consumer: traditional media

The Chinese are highly exposed to media and increasingly media driven overall

Broadcast media Print media • Most households own a TV set. There are over 3,300 local, • China is the third largest publishing sector for exporters, after regional and national TV channels in China, and over the US and Germany. However, it is very fragmented with 2,600 radio stations. The latter ones are all state-owned. around 1,900 newspapers. • Main radio broadcaster include China National Radio and • There are also over 40 major press conglomerates publishing China Radio International. The biggest TV players are: 100 million copies of newspapers every day. There are over • China Central TV (CCTV), largest broadcast media in 10,000 magazines across China. China with national coverage, state-run and based in • However it is mostly state-controlled: city newspapers are Beijing but with overseas offices, including in London. usually owned by local government or the local Communist • China Global TV Network (CGTN), a state-run Party. Sensitive information is monitored and can eventually international broadcaster with networks in 5 other be censored. However tourism information is not considered international languages, including French and English. sensitive. Depending on the city, or region, press is more or • Regional TV stations, with support of satellites, are gaining less censored. more popularity with a focus on lifestyle and entertainment • Magazines are getting more specialised in their own niches. programmes. Trends Travellers, World Traveller and National Geographic • China is also the largest cable TV market in the world with Traveller are amongst top tourism magazines in China. over 216m subscribers. • Again online support is challenging the market situation as • Main players are Tencent, Baidu, LeTV. Most traditional TV many of them are being digitised to gain more market share channels and radio stations have to face the competition of and penetration. China Daily, an official English-language streaming and OTT companies, like iQiyi, Youku, Tudou paper is a good example of that. and Sohu. Source: BBC‘s China profile - Media, AHK China, 2016 ITA Media and Entertainment Top Markets Report

41 Market and Trade Profile China

2.4 Reaching the consumer: online media

Internet use Social media • China is the world’s largest online population with • The Chinese social media landscape is very unique. Many 731m of Internet users and an adoption rate of 53%. international players like Facebook are blocked in China. The • A system nicknamed the “Great Firewall of China” main actors are local, and usually either messaging, blogging or can block access to foreign or domestic websites, microblogging services. filtering URLs or censoring some keywords. • Among the messaging apps and platforms, the most popular are: • Three main players are known as “BAT”: • WeChat with 762m monthly active users as of Q1 2016, • Baidu: top search engine 846m by the end of 2016. • Alibaba: e-commerce leader, allied with Sina • Tencent’s QQ with 877m monthly active users as of Q1 which operates the Weibo microblog platform 2016. • Tencent: WeChat instant message platform • Popular blog platforms include WeChat Moments, Weibo and • According to CNNIC, 41% of Internet users use the Tencent. Internet for travel booking (as of 2016). This represents a 15% increase on 2015 levels. Most frequently used apps by netizens in 2016 Alipay 14% Mobile predominance: • The CNNIC says 92.5% of China's online population mobile Baidu 15% can access the internet via a smartphone. Taobao 24% • Mobile payments is getting more and more popular in China, especially among the millennials. QQ 60%

WeChat 80%

0% 20% 40% 60% 80% 100%

Source: BBC‘s China profile - Media, AHK China, CNNIC‘s 39th report (January 2017), Kantar Media CIC‘s 2017 China Social Media Landscape

42 Market and Trade Profile China

2.4 Reaching the consumer: social media on holiday

Use of social media on holiday • Chinese travellers tend to use more social media on holidays than the all-market average: only 19% of Chinese international travellers have not used social media during their last holiday abroad, compared to To keep in touch with people at home 56% 44% 29% across all markets. To post / upload photos of my holiday 49% 39% • The Chinese social media market is dominated by Look for recommendations for places to eat or 56% local actors. WeChat, Youku and Weibo are among drink 30% the most used social media platforms. I have not used social media at all on this type 19% of holiday 29% • 88% of Chinese international travellers regard their Share with others where you are / what you 50% smartphone as essential whilst they are on holiday, are doing while on holiday 29% To let people know where I am at a given 30% and 65% their tablet. moment (e.g. checking in on Facebook) 25% • 82% of Chinese travellers like to be able to stay To help you plan / decide where to go or what 37% to see or what to do 23% connected when they are on holidays, with 87% Ask for advice on where to go or what to do 43% wishing it were cheaper to use their smartphone 20% abroad. Share my own advice or recommendations 42% about visiting where I am 19% • While on holiday, the Chinese tend to use more social 0% 20% 40% 60% media than the average international traveller, especially when finding or sharing recommendations China All markets on where to go to eat, drink or visit.

Source: VisitBritain/IPSOS 2016, base: all respondents.

43 Market and Trade Profile China

2.4 Reaching the consumer: influences

Influences on destination choice

28% Talking to friends / relatives / colleagues 40% 22% Information from search engines [e.g. Google] 33% 21% Looking at prices of holidays/flights on price comparison websites 31% 25% Websites providing traveller reviews of destinations [e.g. TripAdvisor] 30% 25% Talking to friends or family in your social network (e.g. via Facebook / Twitter) 26% 17% An accommodation provider/ hotel website 26% 24% A travel guidebook 25% 27% Travel agent or tour operator website 25% 19% Travel blogs / forums 22% 24% Travel programme on TV 19% 16% A special offer or price deal you saw advertised online 19% 22% Travel agent or tour operator brochure 18% 19% An official tourist organisation website or social media site for the country or destination 18% 19% An official tourist brochure for the country / city / region 17% 18% A travel feature / article in a magazine or newspaper 16% 22% Direct advice from a travel agent/tour operator (face-to-face, over the phone) 16% 19% Images or videos your friends or family have posted to social media 15% 13% Images / information in online adverts 15% 16% A special offer or price deal you saw advertised offline e.g. in a newspaper, magazine or on TV 15% 17% Images or videos from a photo/video sharing social network site 14% 18% Travel app 14% 16% Images / information in adverts in a magazine or newspaper 12% 16% Articles on an online encyclopaedia e.g. Wikipedia, Wikitravel 12% 16% Images / information in TV adverts 11% 12% Seeing social media posts from celebrities talking about their holiday destinations 9% 11% Images / information on billboards / poster adverts 9% 7% Travel programme on radio 6% 7% Information in radio adverts 6% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Source: VisitBritain/IPSOS 2016 China All markets

44 Market and Trade Profile China

2.5 Perceptions of Britain

• The Chinese rate Britain highly overall, and in particular for tourism, built heritage, contemporary culture and its vibrant city life. However, their perceptions of the British scenic natural beauty and welcome are weaker: they ranked Britain 15th and Areas of strength for Britain: 19th out of fifty nations respectively on these two attributes. Culture, historic • Museums, films and opera are the cultural products or services sites and easy to most strongly associated with Britain by the Chinese. get around • Chinese travellers would mostly expect a trip to Britain to be ‘fascinating’. They are also much more likely to consider it ‘romantic’, ‘relaxing’ or ‘spiritual’ than the global average. • Australia and France are the destinations that the Chinese consider the ‘best place’ for delivering many of the aspects they want from a holiday destination. • Areas of strength for Britain include the ease of getting around the country as well as its historic sites.

Source: GfK Anholt Nation Brands Index 2016, Arkenford 2013

45 Market and Trade Profile China

2.5 Perceptions of Britain

Britain’s ranking (out of 50 nations)

Measure Chinese All respondents respondents Overall Nation Brand 3 3 Culture (overall) 4 5 The country has a rich cultural heritage 3 7 The country is an interesting and exciting place for contemporary culture such as 4 4 music, films, art and literature The country excels at sports 5 5 People (overall) 10 7 If I visited the country, the people would make me feel welcome 19 12 Tourism (overall) 3 5 Would like to visit the country if money was no object 3 5 The country is rich in natural beauty 15 24 The country is rich in historic buildings and monuments 5 5 The country has a vibrant city life and urban attractions 4 4

Source: Anholt-GfK Nation Brands Index 2016

46 Market and Trade Profile China

2.5 Perceptions of Britain

Cultural associations Adjectives describing a potential trip to Britain

39% 22% Museums Educational 47% 34% 18% 26% Music Fascinating 39% 31% 23% Films 21% 39% Exciting 30% 20% Sports 21% 36% Romantic 16% Modern Design 20% 29% 22% Relaxing 15% Pop videos 13% 29% 22% Spiritual Opera 23% 8% 24% 9% Stressful Sculpture 20% 7% 24% 5% None 11% Boring 16% 7% 5% Street Carnival 15% Risky 15% 6% 11% 4% Circus Depressing 13% 5% 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40%

China All respondents China All respondents

Source: GfK Anholt Nation Brands Index 2016

47 Market and Trade Profile China

2.5 Perceptions of Britain Holiday wants and % saying destination is best place for… Importance GB FR IT AU US GE 6.44 Enjoy the beauty of the landscape 25% 48% 47% 64% 35% 23% 6.42 Feel connected to nature 15% 26% 22% 66% 34% 20% 6.40 Have fun and laughter 15% 35% 15% 70% 23% 18% 6.38 Chill/ slow down to a different pace of life 26% 50% 33% 62% 30% 16% 6.38 Be physically healthier 30% 44% 35% 66% 40% 27% 6.35 See world famous sites and places 46% 62% 58% 49% 46% 29% 6.32 Soak up the atmosphere 23% 44% 35% 55% 23% 26% 6.24 It offers unique holiday experiences 39% 56% 50% 63% 43% 34% 6.23 Enjoy peace & quiet 28% 40% 28% 66% 24% 24% 6.23 Offers good value for money 36% 52% 43% 60% 42% 32% 6.21 Experience activities/places with a wow factor 33% 47% 35% 54% 46% 21% 6.19 Experience things that are new to me 29% 55% 45% 59% 37% 24% 6.17 Enjoy local specialities (food and drink) 29% 70% 69% 39% 28% 28% 6.15 Get some sun 31% 48% 37% 73% 34% 20% 6.14 Visit a place with a lot of history/historic sites 48% 73% 64% 22% 21% 28% 6.14 Enjoy high quality food and drink (gourmet food) 23% 67% 61% 24% 38% 19% 6.14 Provides a wide range of holiday experiences 37% 54% 45% 59% 52% 31% 6.09 The people are friendly and welcoming 33% 49% 42% 54% 40% 32% 6.08 Do what I want when I want spontaneously 28% 26% 17% 27% 15% 11% 6.08 Broaden my mind/ Stimulate my thinking 32% 61% 40% 48% 51% 33% 6.07 Do something the children would really enjoy 37% 45% 36% 63% 54% 30% 6.07 Have dedicated time with my other half 35% 54% 37% 60% 38% 30% 6.00 Easy to get around by public transport 54% 56% 43% 48% 63% 51% 5.96 Explore the place 15% 50% 37% 49% 48% 23% 5.88 Good shopping 38% 66% 48% 41% 64% 24% 5.87 Feel special or spoilt 31% 56% 37% 53% 37% 19% 5.82 Do something environmentally sustainable/ green 40% 53% 66% 44% 33% 40% 5.80 A good place to visit at any time of year 26% 45% 40% 60% 41% 24% 5.79 Revisit places of nostalgic importance to me 21% 37% 39% 12% 24% 14% 5.66 Get off the beaten track 21% 57% 39% 36% 34% 46% 5.63 Meet and have fun with other tourists 30% 72% 42% 59% 45% 31% 5.56 Fashionable destination 37% 66% 49% 49% 49% 25% 5.47 Meet the locals 43% 45% 32% 51% 33% 22% 5.46 Visit places important to my family's history 30% 43% 25% 34% 31% 13% 5.42 Do something useful like volunteering to help on a project 34% 28% 29% 57% 38% 27% 5.41 Experience adrenalin filled adventures 46% 37% 36% 36% 28% 29% 5.36 Party 39% 57% 36% 34% 49% 28% 5.35 Go somewhere that provided lots of laid on entertainment/nightlife 45% 53% 47% 38% 66% 30% 5.29 Watch a sporting event 42% 33% 58% 40% 44% 40% 5.18 To participate in an active pastime or sport 26% 54% 51% 35% 31% 28% Source: VisitBritain/Arkenford 2013

48 Market and Trade Profile China

2.4 Reaching the consumer

Motivations for choosing Britain as a holiday destination

41% Cultural attractions 42% 21% Wide variety of places to visit 25% 17% Wanted to go somewhere new 23% 20% Vibrant cities 22% 34% Countryside/natural beauty 22% 15% Easy to get around 22% 11% Somewhere English-spoken 22% 9% Visiting friends or relatives 22% 16% Ease of getting to the country 21% 25% A culture different from own 19% 9% A mix of old and new 19% 24% Contemporary culture 18% 37% Try local food and drink 18% 25% A good deal 18% 22% Security / safety 17% 22% Accommodation (variety & quality) 16% 8% Easy to get plan/organise 16% 7% Meeting locals 13% 10% Wide range of holiday activities 13% 18% The climate / weather 12% 17% Cost of staying in the destination 12% 14% Watching sport 10% 8% Visit a film/TV location 9% 7% Easy to visit with children 8% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Source: VisitBritain/IPSOS 2016

China All markets 49 Market and Trade Profile China

2.5 Perceptions of Britain

Sought-after Britain activities

35% Visit Buckingham Palace 18% 31% Visit 16th c. historic Chatsworth House & gardens 9% 23% Visit Edinburgh castle 6% 23% View London from Shard tower / London Eye 7% 17% Go walking in Yorkshire's moors & hills 4% 17% Take the mountain train up Snowdon 7% 16% Shop on London's Oxford Street 4% 16% Relax in Bath rooftop spa overlooking Roman baths 6% 14% Dine by the fire in a cosy Welsh pub 4% 14% Go to a Premier League football match 5% 13% Tour around quaint Cotswold villages 5% 13% Enjoy traditional afternoon tea & cakes 3% 12% Enjoy a night out in Newcastle's bars 3% 12% Spot wildlife in Scottish Highlands 4% 10% Take a leisurely steam cruise in the Lake District 3% 9% Watch a musical in London's West End 4% 9% Have fish & chips at the seaside 3% 9% Go on the Harry Potter studio tour 2% 7% None of these 3% 0% 10% 20% 30% 40%

% any % first

Source: GfK Anholt Nation Brands Index 2013; If you went on a holiday/vacation to Britain which of the following activities would you most like to do? Please choose a first, second and third choice

50 Market and Trade Profile China

Chapter 3: Access and travel trade

51 Market and Trade Profile China

3. Access and travel trade

• Most Chinese visitors will reach Britain by air. 12% of visits arrive through the tunnel or by sea. • Monthly airline seat capacity from China to Britain has grown significantly in the past five years. Chinese carriers have +74% increased their capacity to the UK, creating new routes or Growth in seat capacity on direct, non stopping flights converting seasonal routes into year-round services. from China to Britain from • The Chinese travel market is still very much dominated by 2011 to 2016 offline bookings. However online travel agents are making progress year on year. • The online travel agent market also tends to be less fragmented than the traditional travel trade. Ctrip dominates this online travel market, but the “BATs” (Baidu, Alibaba, Tencent) are major players too.

Source: Apex Rdc 2016

52 Market and Trade Profile China

3.1 Access: key facts

• Most Chinese travel to the United Kingdom by plane. A growing number of carriers are serving this route directly, and some recently converted Most Chinese their seasonal flights to the UK into year-round visitors travel to the services. • Seat capacity on direct flights from China to the UK by plane. UK has increased steadily since 2010. In 2016 it had more than doubled the 2009 seat capacity. • Chinese visitors departing Britain by air pay Access to Britain* £75 in Air Passenger Duty when travelling in economy class. Measure 2016

• Manchester is the only UK city served by direct Weekly aircraft departures 58 routes from China, outside of London. Weekly seat capacity on air routes 15,144 However, several of the largest cities in China boast direct routes to the UK. Airports with direct routes in China 5 • About one in ten Chinese visitors still pair the Airports with direct routes in Britain 3 UK with at least a visit to continental Europe as they come via a ferry or the Eurostar.

Source: International Passenger Survey by ONS, Apex RdC 2016, *non-stop flights only

53 Market and Trade Profile China

3.1 Access: mode of transport

Visits by mode of transport Sea and tunnel travel (average visits in 000s on rolling 3 years ending in) (000s, 2014-2016 average) 250 210 200

150 20 100 Foot

1 Visits (000)Visits 50 21 0 7

1 Air Sea Tunnel Coach 4 Annual share by mode (2014-2016) (000)Visits 100% 88% 80% 73% 0 Private 60% Vehicle 2 40% 14% 20% 9% 13% 3% 0 5 10 15 20 25 0% Air Sea Tunnel Tunnel Sea China All markets Source: International Passenger Survey by ONS

54 Market and Trade Profile China

3.1 Access: capacity Annual airline seat capacity trends Origin airport annual seat capacity

China 1.7%

900,000 5.8% 787,467 800,000 10.3%

700,000 44.2% 600,000

500,000

Visits 400,000 38.0%

300,000

200,000

100,000 Beijing - Capital Airport Shanghai - Pu Dong Airport

0 Guangzhou - Baiyun Airport Chengdu Airport 2006 2008 2010 2012 2014 2016

Chongqing Airport

Source: Apex Rdc 2016: non-stop flights only

55 Market and Trade Profile China

3.1 Access: capacity

Destination airport annual seat Airline seat capacity by carrier (2016) capacity 4.2% 1.7% 2% 4%

10%

35% 11%

12%

94.1% 26%

British Airways London - Heathrow Airport Virgin Atlantic Airways China Eastern Airlines China Southern Airlines Hainan Airlines Tianjin Airlines Manchester International Airport

London - Gatwick Airport

Source: Apex Rdc 2016: non-stop flights only

56 Market and Trade Profile China

3.2 Travel trade: general overview

• The Home Office recognises over 200 travel agents under Major tour operators the ‘Approved Destination Status’ agreement in China. They are the only agents who can process leisure ADS Caissa Tourism (HNA-Caissa) visa applications, and thus operate leisure tours. Beijing Baicheng International Travel Co. • The national tourist organisation CNTA is regulated by the Utour Group State Council and is responsible for promoting the China International Travel Service (CITS) Chinese tourism industry as well as negotiating with China Comfort Travel Group overseas governments on ADS related matters. Beijing Tourism Group • The main drivers of using an agent for international travel Jinjiang Travel (Shanghai Jin Jiang Tours) are: convenience; language barriers; visa preparation; Shanghai AirLines Tours International knowledge gaps; value. Many Chinese visitors book Shanghai Fasco group travel as a lot of them are first time international Shanghai Spring travellers and being part of a group can reassure them. However, the FIT segment keeps growing. Ctrip • Traditional agencies now have to face the competition of GZL (largest in ) online travel agencies as the sector is growing: 41% of Nanhu Travel (based in Guangzhou) Internet users booked their travel online in 2016, a 15% Qunar (Baidu Travel) increase on 2015. Fliggy (Alitrip)

Source: CNNIC, UKVI Factsheet

57 Market and Trade Profile China

3.2 Travel trade: online travel companies

Top ten online travel agents

Market share Other popular OTA (and links to other companies): Company Name 2015 - eLong.com (Ctrip, Tencent) Ctrip 25.5% - MakeMyTrip (Ctrip) Tuniu 15.0% - Qunar (Ctrip, Baidu) CY 9.5% - UTourWorld - LY.com (Tencent) Mafengwo 3.7% - Qyer.com Lvmama 3.2% - Fliggy (previously Alitrip, Taobao travel) - Baidu Travel Aoyou 1.5% Springtour 1.0%

Uzai 0.9%

MangoCity 0.8% Caissa 0.5%

Source: COTRI/ctcnn.com, ‘Form 20-F’ for OTA companies, Phocuswright

58 Market and Trade Profile China

3.2 Travel trade: Chinese holidays Public and local holidays

National public holidays

Dates in 2017 Dates in 2018 National Holiday

1-2 January 1 January New Year Day & Holiday

27 January - 2 February 15-21 February (Spring Festival)

2-4 April 5 April Ching Ming Festival

29 April - 1 May 1 May Holiday

28-30 May 18 June

1-8 October 1-5 October National Day Holiday (Golden Week)

Source: http://www.officeholidays.com/countries/china/index.php

59 Market and Trade Profile China

3.2 Travel trade: practical information

General practical information: Business meeting etiquette: • Business hours are usually 09:00–17:00 Monday to Friday. • There are a few simple steps to follow here: • Be punctual and prepared Meetings: • Bring a small token gift to leave a good impression • To understand China could be a daunting task for any • At the start of the meeting, the exchange of business cards foreigner. Traditional values and local business practices is important: try to have a good supply of cards, possibly are different and diverse. What works in one part of China with contact details printed in Chinese on one side. You might not work in other parts of it. should present it with two hands, the right way round • Try to understand the local perspective. Be empathetic, allowing the recipient to read the information. adaptable and patient and don’t be afraid to ask. • Titles are very important: address people directly by using • Always prepare to be introduced through a middleman and their professional title or Mr, Mrs, or Miss, followed by the use (connection) as much as you can. Don’t forget surname, starting with the most senior person in the room to give face (show respect) to the host and your partners. to begin and guide conversations. • Chinese communications rules imply “saying it without Hospitality etiquette saying it”: you will have to learn to read between the lines. • “Face” is important part in . Avoid • To show humility when complimented, a Chinese person embarrassing Chinese clients, even for a joke. tends to deny it. • Kissing and hugging are not a common form of greeting • The Chinese are interested in different culture and with the Chinese. Many of them would feel embarrassed, etiquettes and appreciate tips on understanding and so it is best to avoid it. Western/British ways of doing things. • Avoid politics as a conversation subject as it can be very sensitive.

60 Market and Trade Profile China

3.3 Caring for the consumer

Accommodation • Chinese visitors value services with Chinese support (for example Chinese signage, Mandarin speaking staff, Chinese TV channels). • The 2016 Hurun Report compares hotel requirement for the general travellers and the young affluent travellers. The former rank room cleanliness, personalised services and quality of the bedding as their main criteria; the latter value personalised services and the view from their room.

Food and drink • With more and more affluent and younger consumers increasingly exposed to Western culture through their cosmopolitan life style, especially in urban coastal regions, more Chinese have started developing the so-called ‘Western palate’ and might appreciate wine, whisky (and other western spirits), cheese, dairy products, dessert etc. However, many Chinese tourists will recourse to familiar Chinese food once in a while, if not often. • Breakfast is usually eaten between 06:00 – 09:00, lunch from 11:30-14:00 and dinner from 17:30 onwards, although customs are changing rapidly and becoming increasingly westernised.

61 Market and Trade Profile China

3.3 Caring for the consumer

Mobile payment usage in China • 52% of Chinese claim to use cash for only 20% or less of their 2016 measures China monthly spending. Overall spend through mobile US$5.5 trillion • 84% reported that they could accept a totally cashless life. payments • Many dining establishments and retail outlets accept mobile Tencent mobile payment 600 million payment. services’ monthly active users in December • Wechat Pay can be used in 13+ countries outside of . Tencent mobile payment • Mobile Payment is now the standard of the travel industry ranging services’ average daily 600 million from hotels, attractions, taxis etc. transactions in December

Prospects for mobile payment in China • Mobile Payments are narrowing the gap between urban and rural consumers in China with the penetration currently standing at 20% and 17% respectively. • Alipay and WeChat Pay should be the two main forces of mobile payment in the next 10 years in China.

Source: Tencent research

62 Market and Trade Profile China

3.3 Caring for the consumer: Chinese language tips

Language basics & tips for arrival and departure Phonetics English Chinese Mandarin Cantonese Please 请 qǐng tsing Thank you 谢谢 xiè xiè tse Yes 是的 shì de hai No 不是 bú shì ng hai Sorry! (apology) 抱歉 bào qiàn pou hip Excuse me! 对不起 duì bú qǐ deoi ng zyu Sorry, I do not speak Chinese 对不起，我不说汉语 duì bú qǐ ，wǒ bú shuō hàn yǔ deoi ng zyu, wo ng gong zung man Hello 你好 nǐ hǎo nei hou My name is… 我的名字是 wǒ de míng zì shì wo ge meng hai… Welcome to Britain 欢迎来到英国 huān yíng lái dào yīng guó fun ngang loi dou ngang gwok Pleased to meet you! 见到你很高兴 jiàn dào nǐ hěn gāo xìng gin dou nei hou gou hing How are you? 你好吗？ nǐ hǎo ma ？ nei hou ma? Enjoy your visit! 祝你玩得开心！ zhù nǐ wán dé kāi xīn ！ zuk nei wan dak hoi sam! Goodbye 再见 zài jiàn zoi gin Did you enjoy your visit? 你玩得好吗？ nǐ wán dé hǎo ma ？ nei wan dak hou ma? Have a safe journey home! 回程一路顺利 huí chéng yī lù shùn lì wui cing jat lou seon lei Hope to see you again soon! 期待再次相聚 qī dài zài cì xiàng jù kei doi zoi ci soeng zeoi

63 Market and Trade Profile China

3.4 Working with VisitBritain We can help you extend your reach through: • Digital and social media such as Youku, We are here to support you and look forward to WeChat or Pinterest. working with you. To find out more browse our • Press and PR by sending us your newsworthy GREAT China Welcome Programme stories or hosting our journalists and broadcast (visitbritain.org/great-china-welcome) crew or opportunity search • Leisure, and the business travel trade via our (visitbritain.org/opportunities) programme of sales missions, workshops and or trade website exhibitions or promotion to our qualified (trade.visitbritain.com) Britagents and supplier directory or contact the B2B events team • Print advertising in targeted media/Britain (Email: [email protected]) supplements or campaign partnerships team • Retailing your product through the VisitBritain (Email: [email protected]) shop or trade support team • Or as a major campaign partner (Email: [email protected])

64 Market and Trade Profile China

3.5 Useful research resources We have dedicated research and insights available which include: • Latest monthly and quarterly data from the We are here to support you and look International Passenger Survey by ONS forward to working with you. (visitbritain.org/latest-monthly-data visitbritain.org/latest-quarterly-data-uk-overall To find out more about China or other visitbritain.org/latest-quarterly-data-area) inbound markets browse • Inbound Tourism Trends by Market our markets & segments pages or visitbritain.org/inbound-tourism-trends (visitbritain.org/markets-segments) • Sector-specific research our inbound research & insights or visitbritain.org/sector-specifc-research (visitbritain.org/inbound-research-insights) • 2017 Inbound Tourism Forecast contact us directly visitbritain.org/forecast (Email: [email protected]) • Britain‘s competitiveness visitbritain.org/britains-competitiveness

65 Market and Trade Profile China

3.5 Useful market-specific research resources We have dedicated research and insights available which include: • Planning, decision-making and booking cycle of We are here to support you and look international leisure visitors to Britain forward to working with you. https://www.visitbritain.org/understanding- international-visitors To find out more about China or other • Technology and social media inbound markets browse https://www.visitbritain.org/understanding- our markets & segments pages or international-visitors (visitbritain.org/markets-segments) • Gateways in England, insights on overseas our inbound research & insights or visitors to England's regions, participation in (visitbritain.org/inbound-research-insights) leisure activities, multi-destination trips and more contact us directly visitbritain.org/visitor-characteristics-and- (Email: [email protected]) behaviour • Food & drink research visitbritain.org/inbound-food-drink-research

66 Market and Trade Profile China

Market and Trade Profile: China