Chinese Will Reduce ‘Crazy Spending’ And Mature Into Western-Style Tourists

With its dynamic growth, China is turning into a vital source market for many destinations, not only in Asia but also in Europe and the Americas. A special session on the development of the country’s outbound travel market provided valuable insights at the Pisa forum.

Professor Zhang Guangrui, a tourism expert and Honorary Director of the Tourism Research Centre of the Chinese Academy of Social Sciences, predicted that the Chinese outbound travel market will continue to grow strongly for many years to come but will gradually mature into a more recognisable Western-style market with various segments. In particular, he predicted that Chinese tourists, who are known for their lavish holiday shopping in many parts of the world, will reduce this “crazy” spending to more “rational” levels.

In an in-depth presentation of the historical development of Chinese tourism, Professor Zhang explained that since 2009 the Chinese government has viewed tourism as a ‘pillar industry’ with strategic importance to the national economy and as a service industry that meets the needs and wishes of the population.

Key factors supporting the dynamic growth of outbound travel over the last decade and more, besides increased income and the long-term accumulated tourism demand of Chinese people, have included the establishment of two 7-day paid holidays per year, introduction of private passports, access to foreign currencies, simpler visa regulations and widespread introduction of the Approved Destination Status (ADS) system for many countries, along with the boom in Chinese students studying abroad, he said. In parallel, the outbound travel industry is becoming more professional, media are promoting international destinations and technology is helping Chinese consumers to find information about countries. And of course, he added, the efforts of more destination countries to simplify visa procedures for Chinese tourists has also played a stimulating role.

However, Professor Zhang pointed out: “China’s outbound tourism is still at the initial stage. The actual size of the market should not be exaggerated.” Over 70% of cross-border trips are made to Hong Kong and Macau, he observed. According to the World Travel Monitor®,Chinese outbound trips amounted to around 39 million in 2015, excluding trips to Hong Kong and Macao. One phenomenon which has made Chinese tourists famous around the world is their large-scale spending. Addressing this topic, Professor Zhang commented: “Chinese tourist shopping consumption in some destinations is non-rational, and does not fully reflect the Chinese real spending power. The spending power should not be over-estimated. Their consumption pattern abroad may change.”

In general, Chinese tourists buy heavily on foreign trips for reasons such as price differences, product quality and new designs, he explained. In addition, some foreign trips targeted at the mass market are priced very cheaply but include “a shopping trap”, resulting in high spending levels. However, the government, working together with destination country authorities, has now cracked down on such unsustainably cheap tours to solve this problem, he pointed out.

But this holiday shopping trend of the last decade is changing. Younger Chinese consumers have to spend more on education and housing, so this reduces their available income for travel consumption, according to the Chinese travel expert. “As tourists become more mature and the shopping environment improves at home, the ‘crazy shopping’ pattern will change too, and maybe sooner than expected,” Professor Zhang forecast.

Looking ahead, Professor Zhang emphasised the “great potential” of the Chinese outbound travel market, and predicted continued high growth in traveller numbers and trip frequency in the future. “Regional destinations (in Asia) will keep the lion’s share, while other regions may increase,” he said.In terms of the outbound market structure, this could start to diversify into a wider range of holiday trips, he said: “Market segmentation is starting. Both the mass market and niche markets will grow. Some tour operators are starting to promote tailor-made products based on customer wants and needs. These are mostly luxury and costly trips featuring special and unique tourism experiences.”

Professor Zhang highlighted several emerging market segments. Cruise holidays are growing, partly thanks to governmental support, and self-drive holidays are becoming more popular. Another growth business is ‘Red Tourism’, involving visits to historical international sites linked to the communist and socialist political movements, including Russia and Eastern European countries, the birthplace of Karl Marx in Germany, and locations in countries such as France, Canada and Cuba. “This market is growing very fast, for example with 1.2 million Chinese visitors to Russia in 2015, partly because of this new product and market growth,” he told participants.

Source: ITB World Travel Trends Report 2016/2017

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