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Spring 2018 Special Edition Spring 2018 Special edition China’s Outbound Tourism Market COTRI Market Report Spring 2018 Table of Contents 3 Editorial 5 Foreword 6 CHAPTER A – A DEVELOPMENT OF CHINESE OUTBOUND TOURISM 6 2017 Chinese Market Update in a Nutshell 7 Border Crossing Numbers Still Growing 8 Changes in Spending 9 Destination Shifts 11 China as Top International Source Market in 2017 13 Market Driver Update 2017 20 Second Half of 2017 Updates 25 CHAPTER B – A DEEPER LOOK 25 Growth in the 55+ Market Segment 29 Comparing the Mainland Chinese and Hong Kong Source Markets 3938 CHAPTER C – NEW OPPORTUNITIES 38 Finding the Right Chinese Travellers 42 Is Central Europe Ready to Welcome Thousands of Chinese Travellers? 50 WeChat for Travel Brands: Strategies for Success 56 CHAPTER D – DESTINATION DEVELOPMENT 56 Iceland 65 South America 77 CHAPTER E – OUTLOOK 2030 79 CHAPTER F – ITB CHINA SPECIAL 79 Developing Destination Marketing Strategies to Win Chinese FITs 82 Connecting with the High-Value Independent Chinese Traveller 86 Travel Boom from China to Finland – Coincidence or Not? 90 Key Opinion Leaders Inspire Themed Travel 94 Improving Chinese Visitors’ Experience in Navigating through Global Cities by Analysing 54 and Understanding their Consumption 2 COTRI Market Report Spring 2018 Editorial Welcome to the sixth issue of the COTRI Market Report. Since autumn 2015 COTRI China Outbound Tourism Research Institute has been providing a twice-yearly update on the - still fast-moving - development of China’s outbound tourism. This Spring 2018 edition offers a special treat to all its readers: In addi- tion to the “normal” content of CMR we are able, thanks to the gener- ous support of our partner MB Exhibitions (Shanghai) Co., Ltd., organiser of the ITB China fair in Shanghai, to add a special ITB China section. In this section you will find five articles written all from a Chinese perspective. Either the author is Chi- nese, or the author is working in China or the author is working for a Chinese company – in any case, different points of view and different aspects are presented from representatives of leading organisa- tions and companies. The editorial of the CMR Autumn 2017 started with the sentence “World history entered a new stage this autumn with modern China for the first since Chairman Mao’s times openly voicing its intention to take centre stage and offering its economic and political system to the rest of the world.” This edi- torial can claim again the start of a new stage, this time even for two reasons. First of all, President Xi Jinping was not only re-elected for a second term in office, but whereas be- tween 1982 and 2018 the constitution stipulated that the president could not serve more than two consecutive terms, there are no term limits attached to this office anymore following an unanimous decision by all 2,970 members of the National People’s Congress in favour of the necessary constitu- tional amendments. Closer to home for the global tourism industry, the announcement of the establishment of a national Ministry of Culture and Tourism during the National People's Congress provided the second game- changer. Since the 17th of March 2018, CNTA China National Tourism Administration has ceased to exist, its former chairman Li Jinzao now installed as Vice Minister for Tourism. The move obviously did not come without previous warning, as within days after the start of the new ministry, a well-designed website went up (http://www.mcprc.gov.cn/) and even the Wikipedia entry was updated. The signifi- cance of this step is discussed in more detail in Chapter A of this edition, but certainly it underlines the importance tourism is given within the Chinese government. As usual, next to the analysis of the current trends of China’s outbound tourism, special topics are giv- en more attention. In this issue Iceland and South America are the geographical foci, whereas the ‘Sunset Glow’ travellers, or Best Agers, are discussed as an important and growing segment of the Chi- nese tourism source market. 54 3 COTRI Market Report Spring 2018 “Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security.” This sentence, attributed to the famous mathematician John Allen Paulos, is certainly (excuse the pun) true in today’s world. Nevertheless COTRI has, bolstered by the fact that our 2017 forecast of 145 mil- lion outbound trips seems to have been bulls-eye right, ventured to produce a forecast for China’s out- bound tourism development up to the year 2030. As you will see, barring Black Swan events, China should produce close to 400 million annual border crossings by the year 2030, two thirds of which will go further than Greater China (Hong Kong, Macau and Taiwan). To all exhibitors and visitors of the ITB China 2018 we wish a successful fair and a good time in Shang- hai, and for all of our other readers and their friends and colleagues we hope for a peaceful and profitable rest of the Year of the Yang Earth Dog (Wu Xu 戊戌). Prof. Dr. Wolfgang Georg Arlt FRGS FRAS Director COTRI 54 4 ITB China Special Section FOREWORD Dear readers of COTRI Market Report Spring Edition 2018, ITB China 2018 is proud to partner with COTRI for the publication of this edition. China’s new marketplace for the Chinese travel industry is held for the second time in Shanghai from May 16-18, following the success- ful start in the previous year. ITB China is an international offshoot of ITB Berlin, the world’s leading travel trade show, taking place annually in Berlin. ITB’s three-day B2B travel show in Shanghai is exclusively focused on the Chinese Travel Market. At ITB China, around 800 top and hand selected buyers from Greater China meet with industry professionals from all over the world. Various networking events and a unique state of the art matchmaking system in order to enhance networking offer different ways to maximize business opportunities. Coinciding with our travel trade show, ITB China Conference takes place enabling un- precedented knowledge transfer throughout the tourism exhibition. To support the exhibitors at ITB China 2018 further in getting up-to-date information about the devel- opment of Chinese outbound tourism, this edition of COTRI Market Report, the leading bi-annual publication for this important market, is published in cooperation between COTRI China Outbound Tourism Research Institute and the organisers of ITB China. I hope that you will find a lot of new information which will help you to have an even more successful engagement with the Chinese outbound market. Welcome to ITB China 2018! David Axiotis General Manager ITB China 5 COTRI Market Report Spring 2018 CHAPTER A DEVELOPMENT OF CHINESE OUTBOUND TOURISM 2017 Chinese Market Update in a Nutshell Marking 20 years of outbound 20 Anniversary of the start of travel: outbound travel Continued growth: 145mn Border-crossings beyond Mainland China Sudden disruption of growth – South Korea YoY change in Chi- the decline in arrivals in South -48.3% Korea, the USA an Taiwan is con- nese tourists arrivals tinuing: ‘Trendy’ places and inspiration: Arctic, Antarctic, Northern Africa, 180% Annual growth in Chinese tourist Serbia, the UK arrivals to Serbia ‘Hot’ for different reasons Mobile end: Destination mar- 65% Share of Chinese travellers using keting: Applications, Electronic mobile payment in their overseas payment trips Low increase in spending: Expenditure growth rate in 2017, in 3% comparison to 12% in 2016 YoY growth rate of customised travel 14% 54 6 COTRI Market Report Spring 2018 Border Crossing Numbers Still Growing Border crossings from Mainland China grew steadily in 2017. The 2017/16 yearly YoY growth rate of 6% was indeed a slight recovery from the shocking 3% in the 2016/15 period, particularly since the market had maintained a double-digit growth rate for more than a decade before. The recovery, albeit slight, can be read as a positive message and disproves some earlier specula- tions that rates of Chinese outbound tourism will stop increasing on account of slowdown in GDP growth. The recovery of the growth rate can also certain- ly be interpreted as showing that economic conditions and GDP growth rates in China may have an impact on China’s outbound tourism growth, but many other factors also contribute to market changes. In 2017, the overall number of border-crossings beyond Mainland China reached a new peak of 145,000,000, registering a growth of around 6%, which should remain stable in 2018 according to the COTRI forecast. The mar- ket share of border-crossings to Greater China decreased for the seventh year in a row, with 69.4 million border-crossings resulting in Hong Kong, Macau or Taiwan as their final destination, compared with the 75.6 million to all other worldwide destinations. Greater China accordingly accounted for 48% (2016: 49%) of total border-crossings made by Mainland Chinese travellers, while rest of the world border crossings were accordingly 52% of the total, a one point increase of 2016’s 51%. Border-Crossings From Mainland China 54Source: COTRI 7 COTRI Market Report Spring 2018 Changes in Spending In terms of outbound tourism expenditure, 2017 saw the Chinese remain the world’s highest-spending tourists by nationality for the sixth year in a row. In 2017 travellers from China spent an estimated 258 billion USD (figure by the UNWTO), corresponding to a year-on-year increase of 3% and equating to an average of USD 1,780 per person. Long-haul destinations such as the US and Europe registered a higher on-location spending than short-haul destinations.
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