Chinese tourists flocking overseas
By LIU JIE (China Daily)
Updated: 2005-07-04 06:40

Imagine every man, woman and child in Australia and New Zealand flying abroad on holiday each year.

Sounds far-fetched?

Hold your breath: About 29 million Chinese - more than the combined population of the two Pacific nations - went overseas last year.

And to continue the analogy further, the figure is set to be about 40 million - about the size of the entire population of Anhui Province.

Yes, China's outbound tourism is as hot as Beijing's weather. Last year, growth was 43 per cent to 29 million; and another 10 million could be added to the figure this year.

Statistics from the China National Travel Administration (CNTA) reveal that in 2003, the 20.22 million Chinese travelling overseas surpassed the number of tourists from Japan - the nation with the highest number of outbound travellers in Asia - and one of the top 10 in the world for tourist spending.

According to forecasts by the World Tourism Organization, China will become the fourth-largest outbound tourist country by 2020, with as many as 100 million people travelling overseas.

Europe might have opened its doors to Chinese tourists only as recently as last September, but it seems to be the favourite destination outside the long-popular East and Southeast Asia. The Americas are still a no-no for tourists.

The spectacular cultural and scenic attractions in Europe are drawing increasing crowds. In one instance, a humongous tour group of 1,500 people left on June 18 for the continent. The tour, arranged by China International Travel Service (CITS), was a bonus for a Malaysian company's Chinese staff.

China currently has tourism agreements with 64 foreign countries and regions; and 672 domestic travel companies have been awarded licences by CNTA to operate outbound services.

According to Liu Qiande, vice-president of the Beijing Travel Association, the brisk rate of growth reflects the nation's fast economic development and the nation's continuous opening up to the outside world.

The picture is vastly different from only a decade ago. In the 1980s and 90s, Liu tells China Business Weekly, "business travel by government officials and corporate executives formed a large part of outbound tourism. But now, it's individual and group leisure tours that form the bulk, and their share is still rising rapidly."

Though there are no official statistics on the growth of individual outbound travel, information from various travel services clearly attest to the trend.

Chen Xiaobing, general manager of Beijing CAISSA International Travel Services Co Ltd, tells China Business Weekly that the company's retail services (meaning other than those for tailored to government and corporate staff) made up around 25 per cent of its revenues last year but the figure is expected to rise to 60 per cent its business this year.

Meng Nan, a marketing manager of China International Travel Service Beijing (CITSB), points out similar phenomenal growth, but declines to reveal the exact figures.

The taste of tourists is also changing, according to Chen and Meng. They say that their customers have become weary of the cursory multinational sightseeing trips, typically hurrying through several nations with hardly any free time or "cultural stuff."

The traditional outbound sightseeing tour - usually around 10 days to a slew of places - was designed for the lower end of the market, the industry executives say.

But nowadays, what sells is "deep travel," meaning a package that combines sightseeing with more cultural events such as concerts, exhibitions, local festivals, and DIY (do-it-yourself) projects, Liu says.

Not just these, the theme can vary from one package to another quite markedly. Sometimes, it is just tranquility and relaxation, such as holidays on Mediterranean islands. Or just shopping for luxury goods.

The price tag tends to go up with the enjoyment offered: For a nine-day "romance tour" in Greece, CAISSA charges 16,999 yuan (US$2,048) and CITSB 15,800 yuan (US$1,903). And a 10-day trip to "explore" France and Italy costs 13,800 yuan (US$1,663) for both companies. And no discount, both companies say, for such upmarket tours.

In comparison, the price tag for a 12-nation, 16-day tour in Europe is 14,500 yuan (US$1,747) at CAISSA, and an 11-nation, 15-day one is only 12,000 yuan (US$1,446) at CITSB.

"Price is not the key element affecting people's travel decisions. It's the quality of service that matters," says Liu. He explains that those who can afford overseas trips mostly belong to the new middle class in the country who can afford to arrange an overseas trip once a year. They tend to place a greater emphasis, he notes, on comfort and enjoyment.

Foreign travel services are now opening their eyes to the lucrative market, as, in accordance with China's commitments to the World Trade Organization, overseas investors are entitled to set up whollyowned operations in China as of the end of 2007.

China has, in fact, lifted the ban on foreign-funded service providers earlier than promised, industry executives say. In June of 2003, CNTA and the Ministry of Commerce gave the green light to travel agencies wholly owned by foreigners, although they are permitted to only serve inbound tourists.

"When the sector is fully opened," says Liu, "foreigners can take advantage of their destination resources along with their experience and expertise. The domestic travel companies should waste no time in trying to improve their quality and to build up their brands."

Airlines and foreign luxury-goods manufacturers are also gearing up for slice China's outbound tourism market.

Air France began offering one more daily flight on its Beijing-Paris route from mid-June; and Germany's Lufthansa is also either adding capacity to current destinations in China or launching flights to more cities.

British Airlines not only launched a new route but also changed its aircraft to a larger one; Singapore Airlines started providing three round-trip flights on the Beijing-Singapore line from May, increasing it daily capacity by 50 per cent.

Insiders say the domestic counterparts, such as Air China, are also busy on improving facilities and adding flights.

The spending power of Chinese has provided new business opportunities for the manufacturers and vendors of consumer goods in the destination markets. Other than travel expenses, Chinese tourists are buying no less than their Asian counterparts.

Released in May, a survey by ACNielsen reveals that in 2004, the per capita spending by outbound tourists from Chinese mainland was US$987, higher Japan and South Korea,to rank the world's top.

All major international luxury brands, mostly from Europe, have opened outlets in China to establish brand awareness and entice customers rather than chase immediate sales, says Zhang Ping, a luxury consumption specialist at the Institute of Economics of Chinese Academy of Social Sciences.

However robust, the outbound travel business still faces bottlenecks, the most serious ones being a shortage of Mandarin-speaking professional staff, most importantly guides, and the uncertainties always hanging on the issue of visas from European governments.

CAISSA reports that it has set up a training centre with German partners in Hamburg which has issued some 1,000 certificates to Mandarin speaking guides in Europe. But the company's Beijing staff say this is still far from enough, considering the galloping speed of growth in Chinese tourists.

The tourism promotion bureaux in countries like Holland, Finland and New Zealand have also launched programmes in China to train tour guides.

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