TARGET MARKET: CHINA
MARKETING STRATEGIES FOR TOURISM DESTINATIONS
A COMPETITIVE ANALYSIS
Target Market - China
A report produced for European Travel Commission (ETC) by Tourism Development International Brussels, 2014
Published and printed by:
European Travel Commission Rue du Marché aux Herbes, 61 1000 Brussels, Belgium
Website: www.etc-corporate.org Email: [email protected]
This report was compiled and edited by:
Tourism Development International
on behalf of the European Travel Commission.
The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the European Travel Commission concerning the legal status of any country, territory, city or area, or of its authorities or concerning the delimitations of its frontiers or bound- aries.
Cover photo: Nanchang scenery, view from the Tengwang pavilion, China; Copy- right: chungking.
Contents
Foreword i
Introduction 1 a. Defining the Competitive Environment for Destination Europe 2 b. Destinations in the Global Market Place: a Comparative Analysis 2
Summary of China Market Study 10
1. The Chinese Outbound Travel Market 15
1.1. A Large and Fast Growing Market 15
1.2. Chinese Tourism to Europe 17
1.3. Characteristics of the Chinese Traveller 18
1.4. Drivers of Growth 22
1.5. Successful Destination Strategies 25
2. Travel Destinations in the Chinese Market 26
2.1. Visa Regimes 26
2.2. Air Connections 28
2.3. Political, Economic and Socio-Cultural Links 31
2.4. Consumer Assessment (TripAdvisor) 33
3. Profile of Europe’s Main Competitors in China 35
3.1. Destination Marketing Organisations 35
3.2. The Australian Tourism Sector 36
3.3. The Republic of Korea Tourism Sector 42
3.4. The Malaysia Tourism Sector 46
3.5. The New Zealand Tourism Sector 49
3.6. The Russian Federation Tourism Sector 53
3.7. The Thailand Tourism Sector 57
3.8. The United States of America Tourism Sector 61
3.9. Conclusions 66
4. Marketing Strategy and Activities of Tourism Australia and Brand USA in China 67 4.1. Tourism Australia Marketing Strategy and Activities in China 67 4.2. Brand USA Marketing Strategy and Activities in China 73
5. Key Factors in Destination Marketing in China 78
5.1. Market Perceptions 78
5.2. Marketing Performance and Opportunities 79
Appendices
Appendix 1 European and Competing Destinations WET TTCI and 84 Bloom Country Brand Rankings
Appendix 2 Weekly City-to-City Flights from Main Chinese Centres 87
Appendix 3 TripAdvisor Ratings 89
Appendix 4 Bibliography and References 91
Acknowledgments
This report was prepared by Peter Mac Nulty and Robert Cleverdon of Tourism Development International on commission to the European Travel Commission (ETC), and was carried out under the supervision of Ms Valeria Croce, Head, Research and Development Department at ETC.
The report is part of a series of fact-finding reports on the tourism strategy de- veloped by destinations competing with Europe in select long-haul markets. The project was realised as part of the European Commission and ETC joint initiative
“Destination Europe 2020”.
We would like to acknowledge the support and contributions of the many ETC members, marketing organisations and tour operators associations who contrib- uted to the realisation of this report.
We also gratefully acknowledge the support of ETC partners, who committedly contributed to the realisation of this project. A special note of thanks to Mr Charlie Ballard, Director of Advertising Research at TripAdvisor, Mr Xu Jing, Regional Director for Asia and the Pacific at UNWTO, and Mr Daniel Velasco, Consultant at Amadeus Travel Intelligence Unit, for their contributions.
i
Foreword
In an increasingly vibrant landscape, marked by new players, technological inno- vation and rapidly changing consumers, the need arises for European destina- tions to closely monitor others’ effort to win market shares in the global tourism market.
This compilation of best practice examples in tourism and promotion strategies is meant to provide insights relevant to ETC and its member countries through a better understanding of the environment in which they operate.
This series of reports provides insights into the strategic vision and the operation- al actions tourism destinations worldwide are developing to attract an increas- ing number of visitors from the most promising source markets. This fact-finding research offers a bird’s-eye view of the competitive environment, and a portrait of the tourism strategy and marketing activities of competing destinations. Ref- erences to official documents and publicly available reports facilitate access to detailed information, for those interested in achieving a higher level of knowl- edge. For Europe’s strongest competitors, portraits are enriched with first-hand information gathered through personal interviews with NTOs marketing directors, representatives of the travel trade and experts.
The common structure of reports facilitates cross-market comparisons. Key re- sults are synthesised in a highly visual executive summary, conceived for dis- semination to the public at large.
We trust these reports will become for ETC and its members an important tool to identify key opportunities and challenges, and to strengthen their comparative advantage in the global tourism market.
Executive Unit
European Travel Commission
Introduction
This report’s aim is to collect meaningful knowledge about the tourism strategy of destinations competing with destinations in Europe in select long-haul markets.
This study is part of a series of publications, which offer an overview of the en- vironment, in which European tourism destinations operate, and a profile of the tourism strategy and marketing activities of competing destinations. A listing of official documents, publicly available reports and media features is provided in an appendix and through the footnotes to permit more detailed examination of the information presented and issues raised. Each report also provides first-hand in- formation on a selection of competing destinations, gathered through interviews with NTOs’ marketing directors, travel trade and experts.
This project focuses on countries competing with European destinations in high potential long-haul markets, namely Brazil, Canada, China, Japan, Russia and the United States. In this analysis, Europe is defined as the 33 countries which are members of the European Travel Commission plus France, the Netherlands and the United Kingdom.
The analysis followed a three step approach.
The first step was to identify the key markets for Europe and the primary desti- nations competing with Europe in those markets. These markets are presented in Figure 1.
The second step consisted of assessing strengths and weaknesses of destina- tions, which are significant competitors to Europe in the six target markets. The assessment has been based on the following indicators:
• the World Economic Forum Travel and Tourism Competitive Index (WEF TTCI),
• travel trade interviews and expert opinion,
• visa regimes and other visitor entry requirements,
• air connectivity and capacity,
• price competitiveness,
• political, economic and socio-cultural links,
• destination tourism development policy,
• destination tourism marketing strategy.
The third step consisted of identifying those destinations which are the strongest competitors for Europe in each market, i.e. destinations which attract significant volumes of travellers and are actively investing in increasing their share in the market. A detailed profile of the organisations in charge of promoting inbound tourism to these destinations has been compiled. Information about the strongest competitors has been collected by the means of personal interviews as well as from secondary sources.
Defining the competitive environment for Destination Europe
a. Defining the Competitive Environment For Destination Europe
Experts from the European Travel Commission (ETC) Executive Unit, Market Intelligence Committee and Operation Groups, as well as experts from Tourism Development International (TDI), were involved in a two-stage process to define the competitive environment, in which European destinations operate.
In the initial stage, those long-haul markets which show the best prospects for Europe as a tourism destination were identified. Based on a compound analysis of the relative importance of, and growth prospects for a large number of mar- kets, six were identified as priorities for Destination Europe.
The experts were then asked to list countries which are actively targeting those markets as tourism destinations. These competing destinations are defined as countries which are currently investing in tourism promotion and which already receive considerable volumes of tourists from the selected markets. The outcome of experts’ evaluation of the competitive environment is reported in Figure 1.
Figure 1: Market: Destination Pairings
Markets Competitor
1 2 3 4 5 6 7
Brazil USA Mexico Australia Russian Federation Canada USA /USA
large cities Mexico China South Africa China USA Australia Russian
Federation Rep of
Korea Thailand Malaysia New Zealand
Japan USA Rep of
Korea Thailand Malaysia
Russia Egypt China Dubai United
States Thailand United
States China Brazil Australia USA large
cities South Africa
b. Destinations in the Tourism Global Market Place: a Comparative Analysis
An overall assessment of the comparative resources and capabilities of the se- lected destinations was undertaken based on publicly available international indi- cators, which monitor aspects crucial to determine their strength and weakness- es as tourism destinations.
The World Economic Forum Travel and Tourism Competitiveness Index (WEF TTCI) provides a broad assessment of a large number of characteristics and fea- tures that facilitate the development and functioning of tourism in a country. The survey assembles results for 79 pillars under three main “sub-indexes”:
1. Travel & Tourism Regulatory Framework, 2. Business Environment & Infrastructure,
3. Travel & Tourism Human, Cultural and Natural Resources.
Factors and policies conducive of travel and tourism development
2
These illustrate the relative success of destinations in creating conditions to at- tract investment in tourism development. Figure 2 shows the ranking of the 13 destinations according to each of the sub-indexes and relative to each other.
The rankings in columns i to iv are based on a total of 140 countries worldwide included in the WEF TTCI survey. The rankings in column v are within the set of 13 competitor destinations.
Figure 2: WEF TTCI Rankings of Competing Destinations, 2013
Country Competitiveness Subindex Travel &
Tourism Regulatory Framework
Travel & Tourism Business Environment &
Infrastructure
Travel & Tourism Human, Cultural
& Natural Resources
Overall
Ranking Ranking within 13 Competing Destinations
(i) (ii) (iii) (iv) (v)
Australia 23 25 4 11 2
Brazil 82 76 12 51 10
China 71 63 13 45 9
Dubai (as
UAE) 45 9 35 28 5
Egypt 86 77 84 85 13
Rep of Korea 38 17 20 25 4
Malaysia 55 41 17 34 6
Mexico 83 61 15 44 8
New Zealand 4 12 22 12 3
Russian
Federation 92 46 58 63 11
South Africa 81 59 57 64 12
Thailand 76 44 23 43 7
United States 44 2 1 6 1
Source: TDI analysis of WEF TTCI report
At a country level, European destinations (both ETC member countries and other countries in Europe) occupy the top positions of the WEF ranking - see Fig- ures 25 to 28 in Appendix 1. The leading five positions in the overall ranking are European i.e. Switzerland, Germany, Austria, Spain and the United Kingdom. A further three European countries are placed in the band of 6th to 15th (i.e. France, Sweden, the Netherlands), and 15 rank in the top quarter up to 35th place. Six of the 13 competing destinations examined in the study achieved a ranking in the top quarter of all destinations worldwide i.e. the United States 6th, Australia 11th, New Zealand 12th, Rep of Korea 25th, Dubai (based on the data for the UAE as a whole) 28th and Malaysia 34th.
Figure 3 shows the overall ranking position for four European countries (France, Italy, Spain and the United Kingdom), selected as benchmarks, and the 13 com- peting destinations.
The comparative analysis of the resources and capabilities of the 13 destinations identified as competitors at sub-index level (see Appendix 1) suggests what fol- lows:
High ranking: United States, Australia and New Zealand. These countries show strengths in the following areas:
• New Zealand in respect of its travel and tourism regulatory framework,
• the United States for the travel and tourism business environment and infrastructure, and for travel and tourism human, cultural and natural resources,
• Australia for travel and tourism human, cultural and natural resources.
The United States fares less well in respect of the travel and tourism regulatory framework, and lower rankings (though still in the top 25 globally) are recorded by Australia in respect of the business environment and infrastructure, and the regu- latory framework, and by New Zealand for human, cultural and natural resources.
Mid ranking: Republic of Korea, Dubai (UAE), Malaysia, Thailand, Mexico, China, Brazil. Six of these seven destinations, the exception being Dubai, score more highly than their overall ranking in respect of human, cultural and natural resources. The weaknesses for this group of destinations are in the regulatory framework (i.e. Mexico, Brazil, Thailand, China) and the business environment and infrastructure (i.e. Brazil, China, Mexico).
Mid-to-low ranking: Russian Federation, South Africa. Both countries’ rank- ings are pulled down by their low assessment in respect of travel and tourism regulatory framework. In the case of South Africa, this is due to low performance on safety and security, and health and hygiene; while for the Russian Federation, the weaknesses are more widespread across four of the five pillars in the sub-in- dex.
Low ranking: Egypt. Its weak positioning reveals in each of the three sub-in- dexes suggests that this destinations doesn’t have an overall comparative ad- vantage in respect to destinations in Europe, but may be attractive in specific markets and segments.
4
Figure 3: WEF TTCI Overall Rankings
Source: WEF - TTCI, 2013, 140 destinations
Another competitive edge for destinations is the value of their tourism offer. While the perceived value of tourism services is a subjective construct that varies across markets, segments and experiences, an assessment based on standardised in- dices can highlight destinations’ comparative advantages related to cost-related aspects.
The WEF TTCI survey examines components that impact on price levels at a destination, including taxes levied on ticket sales, airport charges and fuel costs, as well as general taxation levels. The overall price competitiveness of destina- tions is derived from these five factors. The WEF TTCI also provides a hotel price index, as a proxy of price competitiveness from a consumer perspective.
The WEF TTCI’s rank order in terms of overall travel and tourism price compet- itiveness and the hotel price index for destinations competing with Europe are shown in Figures 4 and 5. It found that Malaysia and Thailand are the most price competitive destinations, although the United States fares well on hotel prices;
Australia is the least competitive destination in terms of prices.
By comparison, all European destinations are in the lowest tercile (ranked 100th or lower), largely because of travel and fuel taxes. They are more competitive in respect of hotel prices, with Spain featuring 42nd and the United Kingdom 53rd while other European countries score less well, ranging from the Baltic states of Lithuania, Latvia and Estonia (all in the top 12 of hotel price competitiveness) to Switzerland, Serbia and France all ranked worse than 100th in respect of hotel prices. See details in Appendix 1.
The value of tourism products across destinations
Figure 4: Destination Travel & Tourism Price Competitiveness: 13 Primary Competitors to Europe
1
21
41
61
81
101
121
141
161
UK
Russian Federation Malaysia
Thailand
New Zealand
European Benchmark Competitor Destinations
Source: WEF - TTCI
USA Republic of Korea
Australia Egypt
South Africa China Mexico
UAE-Dubai
Spain
France
Brazil Italy
Source: WEF - TTCI
Figure 5: Destination Travel & Hotel Price Competitiveness: 13 Primary Competitors to Europe
Source: WEF - TTCI
6
The rating of a country as a brand in the perception of prospective visitors is an important travel decision making criterion in respect of choice of destination.
The impressions created in the minds of consumers in travel markets around the world are created through a large number of influences. The Bloom Consulting Group in its annual Country Brand Ranking1 identifies four variables as contribut- ing to a destination’s image and thereby establishing its tourism brand rankings i.e. 1. Tourism economic receipts and growth (a first indicator of a country’s
appeal),
2. The destination products and experiences researched online (meas- uring its online appeal),
3. The country’s brand strategy (assessing the accuracy and effective- ness of its communication efforts),
4. Official website and social media performance.
The results of the 2013 Country Brand Ranking of 187 countries and territories are outlined in Figure 6. It shows that the United States has the strongest tourism brand followed by Thailand, Australia, China, Malaysia, the Republic of Korea and Mexico which all feature in the top 20 destinations. None of the 13 primary competitors to Europe across the six selected markets is ranked lower than 42nd (Brazil). Nine European countries are ranked in the leading 20 destinations, led by Spain, France, the United Kingdom and Italy. Full details for all European countries are presented in Appendix 1.
Figure 6: Country Tourism Brand Ranking: Primary Competitors to Europe
Source: Bloom Country Brand Ranking Tourism Edition 2013
1 Bloom Country Brand Ranking Tourism Edition 2013
http://bloom-consulting.com/sites/default/files/files/Bloom_Consulting_Country_
Brand_Ranking_Tourism_2013.pdf
Country Brand Rankings
The competitive strength of any country as a tourism destination is a combination of many factors, some of which are fixed or otherwise factual while others are subject to the influence of both product developments and marketing and promo- tional activities. No destination is outstandingly strong or weak across all parame- ters. The strongest individual destination is the United States, rated as having the leading tourism brand and achieving 6th place in the global WEF TTCI survey of all tourism development factors (behind five European countries).
The power of strong tourism industries combined with market-driven tourism product/experience development and well-targeted marketing is illustrated by comparing rankings on the WEF TTCI broad tourism development and facilitation survey (that does not take account of destination marketing) and the Bloom Con- sulting Group destination brand ranking (which features destination marketing el- ements as a key criterion). This is borne out particularly in the cases of Thailand, China, Malaysia, Mexico, Egypt, South Africa and the Russian Federation where weaknesses in either or both of the regulatory framework, and business environ- ment and infrastructure, may be compensated for by price advantages and the appeal of the countries’ tourism product offering.
Figure 7: Country Tourism Rankings
Country Bloom Country
Brand Ranking Overall WEF TTCI Ranking Europe’s Competitors
United States 1 6
Thailand 6 43
Australia 8 11
China 10 45
Malaysia 15 34
Rep of Korea 18 25
Mexico 19 44
Egypt 22 85
UAE - Dubai 25 28
South Africa 28 64
Russian Federation 30 63
New Zealand 38 12
Brazil 42 51
European Benchmarks
Spain 2 4
Germany 3 2
France 4 7
United Kingdom 5 5
Italy 7 26
Austria 11 3
Switzerland 14 1
Sources: WEF TTCI survey, and Bloom Country Brand Ranking Tourism Edition 2013
8
Information Note - Exchange Rates
The monetary values quoted in the report are taken from the sources referenced, including amounts stated in the source document in US dollars. In all cases, conversion has been made to Euros. The conversion rates used are the average rates across the year between the local currency (or US dollar where that is the currency stated in the source document) and the Euro for the year of the data.
For future forecasts/targets, the rate between the local currency and the Euro as at June 2014 have been used.
KEY DEMOGRAPHIC AND ECONOMIC DATA 2013
CHINA’S PERFORMANCE IN INTERNATIONAL TOURISM
OUTBOUND DESTINATIONS VISITED BY CHINESE
International arrivals generated
2012: 82mn 2013 : 97.3mn up 18 to 19%
Expenditure Population
1,351mn
$9,828 €7,280
GDP PPP per capita
Average annual GDP growth over past decade
1. Hong Kong 2. Thailand 3. South Korea 4. Macau 5. Taiwan
6,752,781 4,997,216 3,440,969 3,132,728 2,815,741
6. Singapore 7. Malaysia 8. Japan 9. Vietnam 10. France
1,563,044 1,476,636 889,847 682,053 648,376
10
4 1 5
9 6
8
7
3
Leading outbound tourism country in terms of EXPENDITURE CNY 42,026 €5,075
GDP PPP per capita current prices2
Second largest outbound market in terms of OVERNIGHT STAYS in 2013
32012: $102bn
(€78 bn)2013: $120 – 130bn
(€89 – 96 bn)
up 18 to 27%
in dollarterms but slightly less in Euros (14 to 23%) as a result of the depreciation of the dollar against the Euro since 2012
2World Economic Outlook Database, October 2013, IMF. Euro values converted at average exchange rate for 2013.
3 World Travel Monitor 2013, IPK International
TOP destinations
are Asian
Total trips to Europe:
3 million (first stop) with aggregate arrivals circa 5 million
10
PURPOSE OF VISIT
30 29 29 20
United Arab Emirates
2000 2010
United States
of America Switzerland France
90 46
54
Private (leisure)
Public (business, official)
Private (leisure)
Public (business, official)
POSITIVE INFLUENCES ON GROWTH
Steadily developing economy
Easing of visa policies of foreign countries/regions Increasing international flights
Expanding tourism consumption demand Appreciation of Chinese currency
OUTBOUND TRAVEL AND COMPETITIVE ENVIRONMENT
Destination success in the Chinese tourism market from:
1. Understanding and catering for cultural needs,
2. Innovating, investing and working across sectors to deliver the right products/experiences, 3. Catering for increased FIT travel,
4. Focusing destination marketing on authentic features and offerings, 5. Incorporating China-friendly elements in the experiences offered,
6. Accurate product: market matching in line with the preferences and trends of the Chinese market, 7. Facilitating Chinese travellers to enter, travel around and obtain Chinese-oriented service.
Europe’s primary competitors across all aspects of tourism according to the WEF TTCI are other industrial- ised nations e.g. United States, Australia, New Zealand, Republic of Korea,
In terms of overall price competitiveness in travel and tourism, European destinations are among the world’s most costly,
The 2013 Bloom Consulting Country Brand Ranking rates the United States as the leading tourism destina- tion brand with Australia also in the top ten, while nine of the leading 20 tourism destination brands are European.
p.a. p.a. p.a. p.a.
Marketing Strategies for Tourism Destinations. Target market: CHINA
Seven destinations are shortlisted as significant competing destina- tions to Europe in the Chinese market: Australia, Malaysia, New Zealand, Republic of Korea, Russian Federation, Thailand and the USA, All seven are making major efforts to support and increase the com- petitiveness of their travel and tourism industries by:
Australia and the USA are the most active and effective long haul competitors to Europe for the Chinese tourist,
Australia’s success in the Chinese markets is a result of:
PRINCIPAL COMPETING DESTINATIONS
COMPETING DESTINATION ORGANISATIONS
Europe’s primary competitors across all aspects of
tourism according to the WEF TTCI are other industrialised nations e.g.
USA,
Australia, New
Zealand, Republic of Korea
In terms of overall price
competitiveness in travel and tourism,
European destinations are among the world’s most costly
The seven countries competing with Europe for the Chinese tourist are pursuing marketing strategies that:
1. Seeking to develop new and improved infrastructure and tourism products/experiences across a broad range of visitor interests, 2. Focusing on delivering a high standard of tourism service, 3. Paying special attention to facilitating entry into their countries
and targeting the Chinese tourist.
1. Stress the authenticity of their natural and cultural heritage in developing brand images and positioning,
2. Pay equal attention to established source markets and newly emerging ones to achieve a balanced set of markets,
3. Seek a market: product “matching” approach that provides high quality experiences based of detailed research into the needs and expectations of different market segment, with China a primary target market target,
4. Focus on a number of common segments across competitors e.g. MICE, medical tourism, shopping, festivals and events,
5. Pay special attention to attracting high value/affluent tourists,
6. Show a significant and continuing switch away from traditional advertising and promotional methods to electronic digital marketing.
1. Early awareness of China’s potential and the need to understand the Chinese traveller,
2. The necessity for a partnership approach to developing the Chinese market, 3. Substantive and sustained marketing campaigns targeted at affluent, urban
Chinese who are experienced travellers,
4. Deploying marketing and promotional tools tailored to the needs and expectations of the Chinese traveller.
Brand USA’s achievement in only its third year of operation has been to translate interest and desire to visit the country into firm travel intentions – close to 60% of respondents intending to visit in the coming year,
The partnership approach is central to Brand USA’s marketing strategy and campaign components, giving a wide range of destination, travel trade and media partners the opportunity to piggyback on the digital and traditional marketing tools, public relations and promotional efforts developed and conducted by Brand USA,
In any destination marketing strategy based on partnerships, accountability to its partners is vital. Brand USA has a rigorous system of monitoring, assessing and evaluating its activities.
12
The United States represents wealth, modernity and popular culture, and Australia offers a natural environment and a relaxed lifestyle,
Europe and the United States are top of the list in terms of choice as first time overseas destinations, while all three destinations can offer the range of attractions and activities to cater for the more experienced traveller seeking places to visit and things to do outside the normal tourist circuits, All the three destinations have extensive Chinese language programmes – both in marketing campaigns in China, and in the delivery of tourism products and services in the destination. The United States has an advan- tage in that it is seen by the Chinese as being more attuned to Chinese tourists’ needs,
All have invested heavily and effectively in studies and surveys to better understand the attitudes, motivations, behaviour and characteristics of Chinese travellers in order to be able to design marketing and promotional strategies and campaigns to achieve the highest possible penetration of the China market,
The ETC is disadvantaged against Tourism Australia and Brand USA through a far smaller marketing budget in China,
The disparate and limited marketing activities of European countries, without a strong, financially-empowered coordinating mechanism, lead to the prevailing market perception of Europe of a collection of countries without a central theme. Competition can be fostered – indeed market competition is the essence of business in both Australia and the United States – by linking together on certain marketing activities, generating benefit to all, in the spirit of co-opetition (i.e. cooperation AND competi- tion) whereby the overall market is increased through working together enabling the destination’s individual marketing activities to compete for a larger total market. The strength of both Tourism Australia and Brand USA is their focus on the partnership approach to destination marketing, Historical culture and heritage are Europe’s key assets in the current (unmanaged) positioning of Europe; but the challenge of any future marketing campaign will to shift this positioning to highlight Europe’s contemporary vibrancy, enterprise and innovation within tourism, and in particular to create knowledge about the rich and diverse tourism experi- ences that Europe can offer beyond the introductory tour of iconic sites and features.
Country Brand Ranking rates the
USA as the leading tourism destination brand
with Australia also in the top ten, while nine of the leading 20 tourism
destination brands are European
The Chinese Outbound
Travel Market 1
1.1 A Large and Fast Growing Market
China represents one of the principal motors for the growth in international tour- ism. Between 2000 and 2013, the volume of outbound departures of the Chinese population rose by between 18% and 19% a year reaching 97 million in 20134. Spending by Chinese tourists on international tourism also grew, reaching an estimated record level of between US$120 and 130 billion (EUR89 – 96 billion) in 20135. Average expenditure per outbound trip was calculated at US$1,226 (EUR943) in 20126, with spending on long haul trips significantly higher than on trips to intra-Asian destinations.
Outbound travel from the leading source markets – Germany, the United States and the United Kingdom - is growing far more slowly than from China with the result that China is now second for trips of one night or more as well as becom- ing the world’s leading outbound travel market in terms of expenditure in 2012 with the total of US$102 billion (EUR78 billion). This represents a near five-fold increase from US$22 billion (EUR18.6 billion) in 2005 when it ranked seventh in international tourism expenditure, overtaking Italy, Japan, France, the United Kingdom, the United States and Germany in the seven-year period7.
Figure 8: Leading Outbound Travel Markets, 2013
Rank Trips (1+ nights) Overnight Stays Spending
1 Germany Germany China
2 China United Kingdom United States
3 United States United States Germany
4 United Kingdom China United Kingdom
5 France Russia Japan
6 Canada France Canada
Source: World Travel Monitor 2013, IPK International
4 China Outbound Tourism in 2013. Travel China Guide
http://www.travelchinaguide.com/tourism/2013statistics/outbound.htm 5 Ibid
6 The Chinese Outbound Travel Market 2012 Update. ETC/UNWTO 7 Ibid
China now the leading outbound market in terms of expenditure
China ranks high both in outbound travel and
expenditure
The main destinations for Chinese tourists are in Asia, with the Special Admin- istrative Regions (SAR) of Hong Kong and Macao attracting over 2/3 of total departures from China. In terms of arrivals of Chinese tourists, the top ten des- tinations are (2012 data): Hong Kong & Macau (China) 23 million, Rep of Korea 3.4 million, Thailand 2.8 million, Taiwan 2.6 million, Singapore 2.1 million, United States 1.6 million, Japan 1.5 million, Vietnam and Malaysia both 1.4 million. The trend towards intraregional travel within Asia reflects the continued expansion of the Chinese population able to travel abroad and who choose a nearby des- tination for their initial trip. In 2013, while total outbound trips rose 25%, Asian destinations recorded a rise of 31% while long haul trips grew by a lower 11%.
Intra-Asian destinations also dominate for Chinese outbound trip destinations organised through travel agencies, as illustrated in Figure 9.
Figure 9: Top 10 Outbound Destinations Visited by Chinese Tourists in 2013
1. Hong Kong 2. Thailand
6,752,781 4,997,216
3,440,969 3,132,728
2,815,741
9. Vietnam
10. France
1,563,044
1,476,636 889,847
682,053 648,376
3. South Korea 4. Macau
5. Taiwan 6. Singapore
7. Malaysia 8. Japan
Source: China National Tourism Administration
Outside Asia, the strongest growth has been recorded to the United Arab Emir- ates (30% p.a. 2005-2012), the United States and Switzerland (both 29% p.a.), and France (20% p.a.). In the last two years Australia (+16% in 2012 to 0.6 mil- lion arrivals), and New Zealand (+48% to over 0.2 million) have been especially strong destinations for the Chinese. The United States, Europe, Australia and New Zealand have grown substantially in recent years, in response to easier travel regulations and increased promotional targeting.
Figure 10: Strong Non-Asian Growth Markets (% Growth Per Annum 2005-2012)
30
United Arab Emirates
29
United States of America
29
Switzerland
20
France Source: Euromonitor International
Most travel from China remains within Asia
Easing of travel regulations contributing to growth outside of Asia
16
Looking ahead, UNWTO forecasts that Asia and the Pacific will generate 358 million tourist arrivals in 2020 and 541 million tourist arrivals in 2030. Of these, nearly 20% will travel to destinations outside the region8. China will be the prime generator of Asian outbound travel. The forecast of 100 million Chinese trips abroad by 2020 made by UNWTO in the late 1990s9 will be achieved in 2014.
While faster growth will remain for intraregional travel, demand for long haul trips will remain strong, growing by between 6.5% and 7% a year over the next five years to exceed 35 million by 201910.
In terms of individual long haul destinations, Euromonitor International’s fore- casts for the period 2012 – 201711 see the strongest growth in Chinese visitors in Switzerland, Spain, the UAE, the United States (all more than doubling the level of arrivals), Italy, Austria, New Zealand and Australia.
1.2 Chinese Tourism to Europe
Chinese tourism to Europe has grown at the rate of 18% a year between 2008 and 2013, reaching a level of 7,475,00012, following an annual rise of 11% in the previous five years, illustrating that Chinese outbound travel growth was largely unaffected by the global recession13. Despite this rapid growth, Chinese tourists comprised just 1.3% of total arrivals in Europe in 201314. As a proportion of all Chinese long haul trips (defined as outside Northeast Asia), Europe’s share has fallen by over 9% between 2004 and 2014, now accounting for one-in-three such trips15.
The average expenditure of a Chinese visitor on a trip to European Union states was US$3,734 (EUR2,835) in 201116.
China was the 15th most important source market for European destinations in terms of international tourist arrivals in 2013, but the 2nd market from outside the region, after the United States.
The leading European destinations visited by the Chinese in 2012 were the Rus- sian Federation 0.8 million, France 1.3 million, Germany 0.8 million, Switzerland 0.7 million, Austria 0.4 million, Italy 0.3 million, United Kingdom 0.2 million17. In terms of regions within Europe, Chinese travellers primarily visit Western Europe- an and Central/Eastern European destinations, these two regions accounting for 55% and 20% respectively of Chinese arrivals in Europe in 201318.
8 Ibid
9 Tourism 2020 Vision. 1997. UNWTO
10 European Tourism in 2014: Trends and Prospects (Q1 2014). ETC.
11 Euromonitor International
http://skift.com/2013/09/03/top-25-most-popular-destinations-for-chinese-tourists/
12 ETC Dashboard
13 European Tourism Portfolio Analysis: Market Share and Origin Market Growth.
14 Ibid ETC
15 European Tourism in 2014: Trends and Prospects (Q1 2014). ETC.
16 Market Profile China. December 2013. ETC 17 Euromonitor International
http://skift.com/2013/09/03/top-25-most-popular-destinations-for-chinese-tourists/
18 European Tourism Portfolio Analysis: Market Share and Origin Market Growth.
ETC
China will be the prime generator of Asian outbound travel to 2020
China is the 2nd market for Europe from outside the region, after the United States
Western Europe accounts for over half of Chinese arrivals in Europe18
Chinese trips to Europe are forecast to grow at an average annual rate of be- tween 7.5% and 8% over the next five years, resulting in a reversal of the de- cline of Europe’s market share of Chinese long haul travel19. Total arrivals will approach 12 million by 2019.
1.3 Characteristics of the Chinese Traveller
Population: 1,351 million population, forecast to grow at 0.23% to 2025, but declining thereafter as deaths outnumber births20.
Gross Domestic Product (2013): US$8,939 billion (EUR6,900 billion), with growth of between 6 and 7% a year forecast to 201921.
GDP Per Capita (2013): US$6,569 (EUR5,075), rising to a forecast level of US$9,300 (EUR6,890) by 201722. Wide variation in the distribution of income, with 120 million Chinese having a disposable household income of over US$6,000 (EUR4,330) in 2010, while the lowest quintile of 151 million people had just over US$1,100 (EUR795)23, as converted from Chinese yuan at the average 2010 exchange rate of 6.77 yuan to the dollar.
Figure 11: Demographic and Economic Facts
Population
1,351mn
$7,958
GDP per capita
Average annual 3 GDP growth over past decade
1
2
The major urban centres of Beijing, Shanghai, Guangzhou and Shenzhen ac- count for most of the outbound travel demand among Chinese, but demand from smaller cities and towns is also growing fast. Shanghai is the primary source of outbound business travel24.
Chinese travel is traditionally concentrated in the May and October holiday periods, but it is becoming increasingly spread across the year. A continuation of this trend is anticipated as holiday entitlements increase and longer duration trips are taken25. Air transport dominates. China has a target of 244 airports by 2020, with a total of over 300 million passengers a year at present and a forecast growth rate in domestic air demand of 8% a year to 2028, fuelled by strong economic growth, market liberalisation and fast urbanisation with rising household travel expendi- tures26.
19 European Tourism in 2014: Trends and Prospects (Q1 2014). ETC.
20 China Population 2013. World Population Statistics. 18 September 2013.
http://www.worldpopulationstatistics.com/china-population-2013/
21 IMF World Economic Outlook China 22 Ibid
23 The Chinese Outbound Travel Market 2012 Update. ETC/UNWTO 24 Ibid
25 Ibid 26 Ibid China GDP forecast
to grow to US$9,300 by 2017 Total Chinese arrivals
to Europe forecast to reach 12 million by 2019
Chinese travel is traditionally concentrated from May to October
18
As of September 2010, 23 airlines operated 471 weekly flights between Chinese and European airports, with a capacity of 140,000 seats27.
The split between public (i.e. business, official) and private (leisure) changed dra- matically between 2000 and 2010, from 46:54 to 10:90, as holiday travel surged.
Holiday travel – particularly group travel – expanded throughout the decade in line with the liberalisation of outbound travel.
Information is readily absorbed by Chinese people though there remains heavy reliance on peer group information from other Chinese. Electronic technology combines these two characteristics to fuel outbound travel growth, and to in- crease the proportion of trips – or trip components – booked online.
There are 591 million Chinese internet users with 464 million citizens accessing the net via smartphones or other wireless device28. Already, one-in-five Chinese travellers books online, a proportion that will rise significantly as independent- ly-arranged – or FIT (flexible independent travel) - travel expands.
The incidence of first time overseas travellers still accounts for the majority but the proportion is declining (65% to 59% between 2011 and 2012) as regular over- seas trip taking grows29.
One third of all trips are through travel agents – 33.6 million in 201330. The Chi- nese Government regulation requires leisure travel to long haul destinations to be booked via licensed travel agencies but this condition has been eased recent- ly resulting in travel agencies’ share of trips to destinations except Hong Kong and Macau falling from 89% in 200931 to between 70 and 75% in 201332
Given the size of the Chinese population and the severe restrictions on overseas travel until 1988, the majority of outbound travellers are still on their first trip out- side the country. Highly structured package tours are the medium for such travel- lers, largely unaware of what to expect or do when in a foreign country.
However, informed and stimulated by digital media, Chinese travel tastes are broadening out and the main trend now is for diversification, with niche prod- ucts and destinations gaining ground, and more self-organised trips being taken.
More experience and language skills lead to different forms of “semi” or “partly”
– organised trips with tour operators providing visa, air trip and, in some cases, hotel bookings.
Just under half - 47% - of Chinese outbound tourists are travelling with members of their family, and another 24% with friends. Only 7% travel entirely without com- panions. 3% of travellers are participants in groups organised by their work units or companies - mostly for technical tours, incentives, and study33.
27 Ibid
28 17 July 2013. http://www.bbc.co.uk/news/technology-23343058 29 http://www.travelchinaguide.com/tourism/2012statistics/outbound.htm 30 ibid
31 The Chinese Outbound Travel Market, 2012 Update, ETC/UNWTO 32 Author’s estimate based on data in
http://www.travelchinaguide.com/tourism/2013statistics/outbound.htm
33 Annual Report of China Outbound Tourism Development 2010 cited in The Chinese Outbound Travel Market, 2012 Update, ETC/UNWTO
Private travel accounts for 90% of outbound travel
One-in-five Chinese travellers books online
First time overseas travellers still account for the majority but the proportion is declining
Just under half of Chinese outbound tourists are travelling with members of their family
Trend towards more self-organised trips
The Chinese leisure market divides between the first time traveller attracted by:
• doing lots of things in a short timeframe,
• shopping for international brands,
• good value-for-money,
• finding familiar foods and interacting with Chinese communities,
• the prestige of visiting – and having photos taken in front of – iconic sites,
• a safe environment.
the more experienced traveller, still attracted by many of these features but also looking to travel as a means of:
• expressing increasing self-confidence and individualism,
• seeking an emotional connection with the destination, through authen- ticity, clean air/blue skies, access to arts and culture etc.
The non-traditionalist Chinese tourists are fragmented into a range of sub-seg- ments or niches but even niche products have relatively large volume demand given the scale of the Chinese market34. Nonetheless, the greater segmentation of the market makes it more difficult to achieve economies of scale in terms of costs. This needs to be compensated for by using new online booking and sales concepts, making it possible to specifically address customer groups even for very special interests and destinations.
Figure 12: Sophistication and Status for the Chinese Traveller
Source: Understanding Chinese Outbound Tourism: What the Chinese blogosphere is saying about Europe. UNWTO/ETC. 2012.
34 Destination Investment. New Networks for Serving Affluent Chinese Visitors. Dr Wolfgang Georg Arlt, COTRI – Chinese Outbound Travel Research Institute, IRB, March 2013.
Greater segmentation of the market will require more effective online marketing
20
The characteristics of the different “tribes” are summarised in Figure 13. Tra- ditionalists, estimated to still account for 70% of demand, travel predominantly for reasons of prestige and are in tour groups. The Wenyi youth and Experi- ence-centered tribes each account for 10%, with the remaining estimated 10%
split between Connoisseurs (7%) and Hedonists (3%).
Figure 13: Characteristics of the Chinese Travel Tribes
Tribe Why They
Travel Mode of
Travelling With
Whome Brings on the Trip Traditionalists Prestige Tour Groups Tour Groups Camera Wenyi Youth Freedom,
Uniqueness Backpacking Alone or
with Friends Notebook, favourite book, mp-3 player, internet device Experience –
centered Togetherness,
curiosity Backpacking or independent driving
Alone, with family or in
‘in-depth travel’ tour groups
Guidebook, phrasebook, electronic dictionary Hedonists Pleasure City travel,
shopping With friends Their parents’
credit card Connoisseurs Aesthetics,
knowledge Independent
driving With partner or family
Camera with equipment, specialised guidebook, laptop
Source: Understanding Chinese Outbound Tourism: What the Chinese blogosphere is saying about Europe. UNWTO/ETC. 2012
For the first time Chinese overseas traveller, the focus is on doing as much as possible. Trip durations are short – typically 4 days, each day packed with activi- ties, and duty free shopping is given the highest priority.
The more experienced Chinese traveller is increasingly seeking out sites and attractions away from the honeypot areas, seeking a more depth experience of the destinations visited. There is a trend towards “deep tours” focused on a single country, or two countries35.
35 The Chinese Outbound Travel Market, 2012 Update, ETC/UNWTO
For the first time Chinese overseas traveller, the focus is on doing as much as possible
1.4 Drivers of Growth
Idealised as means to greater self-realisation, travel has become integral to the Chinese middle-class lifestyle36
There seems little doubt that outbound travel for both business and leisure pur- poses will continue to expand over the present decade and beyond given:
• the dynamics of the socio-demographic trends in China,
• the Chinese population’s rising awareness of, and interest in, engag- ing in foreign travel,
• the greater ease of making foreign outbound travel arrangements aris- ing from the Chinese Government’s commitment to support tourism, improved connectivity and changes to visa regimes.
Though the Chinese population is forecast to grow at a low rate of 0.23% a year, this will still represent an increase in the country’s population in excess of 3 mil- lion people a year. By 2030, the Chinese will make up just under 20% of the world population37.
Key demographic trends with implications for travel and tourism are: the levelling out of fertility rates, large-scale urbanisation and the rapidly ageing population38. By 2030, the largest group in the Chinese population will be aged 60-64. An age- ing population with retirees having financial means to travel will boost overseas travel. Increased and diversified leisure time, outside the prescribed “Golden Weeks” will also serve to increase travel.
China’s economic growth rate will slow down over the next five years, edging down from the 7.7% recorded in 2012 and forecast in 2013 to an annual rate of expansion of 6.5% by 201939. This is still above the rate of economic growth achieved elsewhere in the world. Income levels will continue to rise both in the medium and longer terms and will lead to growing numbers of middle class Chi- nese consumers with sufficient disposable income to travel.
At the centre of the growth of all forms of consumer spending and activity – in- cluding overseas travel and tourism - is the Chinese urban middle-class popula- tion. In 2000, only 4% of urban households in China were middle class; by 2012, that share had soared to over two-thirds; and by 2022, China’s middle class should number 630 million – that is, three-quarters of urban Chinese households and 45% of the entire population.40 The numbers of affluent middle class Chinese is forecast to rise from 175 million in 2011 to 1.4 billion by 203041.
36 The Chinese Outbound Travel Market 2012 Update. ETC/UNWTO.
37 Demographic Change and Tourism. 2010. ETC & UNWTO.
38 Ibid
39 IMF World Economic Outlook China
40 Half a Billion: China’s Middle Class-Class Consumers. D Barton, McKinsey and Company in The Diplomat, 30 May 2013
41 China Digital Times, 2011. Chinese Middle Class four times larger than America.
http://chinadigitaltimes.net/2011/09/within-a-generation-china-middle-class-four- times-larger-than-americas/
Travel has become integral to the Chinese middle-class lifestyle
Ageing Chinese population will boost overseas travel
22
At present only about 7% of the Chinese have an annual income above US$15,000 (EUR11,000) and the country’s total consumption expenditure per household – at US$13,428 (EUR9,950) a year – is relatively low compared to other Asian coun- tries such as Japan and the Republic of Korea. The relatively small number of af- fluent Chinese consumers will grow and will follow the same pattern of spending on property, Western branded goods and luxury items, as well as travel. Given the young profile of these consumers, this spending trend is predicted to continue for the foreseeable future42.
The increasing urbanisation of the Chinese population will also be an important factor in stimulating travel and tourism. Already half of China’s population live in Cities, a proportion that will grow to two-thirds by 2030. Major cities like Beijing, Shanghai, Guangzhou and Shenzen will get bigger but the approximately 170
“second tier” cities, many of which were boosted through the Chinese stimulus package providing better transport infrastructure and services, will also represent large travel markets e.g. Chongqing (29 million population), Chengdu (14 mil- lion), Wuhan (8.3 million).
The increased rapid, recent and continuing urbanisation of the Chinese popu- lation has led to environmental problems of pollution in many cities leading to a desire to go to places without such issues. Worsening pollution and overcrowding will increasingly act as “push” factors for outbound tourism43.
The impact of digital technology on Chinese travellers continues to be immense.
The Chinese have over 600 million smartphone users, the largest in the world, with sales of 283 million smartphones (to 216 million new users) forecast in 201444. Two-thirds of Chinese blog/have a personal space, almost half use social networking sites and email and 83% use instant messaging45. More extensive uses of digital technology will be made both by destinations and travel organisa- tions so that, combined with the Chinese public’s heightened use of social media, awareness of, interest in, and demand for travel will continue to grow.
This heightened understanding of tourist destinations around the world is giving rise to a growing sense of prestige among the Chinese about the type of trip – with package tours regarded as inferior to independently-organised travel – and destinations that have been little visited by the Chinese and/or which create a strong desire among the Chinese to visit through their marketing campaigns hav- ing a high prestige. The Chinese outbound market will increasingly fragment, with package tours gradually losing relative importance towards growing semi-pack- aged and fully independent travel arrangements.
42 ITB World Travel Trends Report 2013/2014. March 2014. IPK International reporting presentation of Chandrashekhar Singh Khangjrakpam, Centaur Research.
43 Nine Important Developments in China’s Outbound Tourism 2013. Wolfgang Arlt, COTRI – China Outbound Tourism Research Institute http://www.forbes.com/sites/
profdrwolfgangarlt/2014/01/01/nine-important-developments-in-chinas-outbound- tourism-2013/
44 Smartphone explosion in 2014 will see usership in India pass US. The Guardian – Global Development. 13 January 2014.
45 China Internet Network Information Center, 2013 cited in Chinese & Brazilian Outbound Tourism Markets and Netnography, Eduardo Santander, ETC. 7th UNWTO/PATA Forum on Tourism Trends and Outlook, October 2013
Increasing urbanisation of population will stimulate outbound travel from China
Environmental problems of pollution will stimulate desire to go to places without such issues
Digital technology crucial for Chinese travellers
Two recent initiatives of the Chinese Government have served to increase travel and tourism by the Chinese population.
The first dates back to the early 1990s when the Chinese Government’s Ap- proved Destination Status (ADS), a bilateral tourism agreement with – to date – 148 countries, was introduced to guarantee safe and reliable tourism services to Chinese travellers. It only concerns tour groups handled by assigned Chinese local travel agents who are allowed to promote and organise tourist groups to approved destinations, including visa application and payment of foreign curren- cy top foreign parties. Having ADS permits countries to undertake marketing in China. Chinese travellers wishing to travel independently can do so making their own visa and other arrangements. In October 2013, the China National Tourism Law was passed, making it illegal to sell tours below cost and to engage in the practice of “forced shopping”. This entails the operator taking the tourists only to those shops that provide the operator with concessions, thereby making up the shortfall on the low price of the tour that attracted the tourist to purchase it.
The second initiative is the introduction by the Communist Party General Sec- retary Xi Jinping in 2013 of the concept of the Chinese Dream. He describes it as “a national rejuvenation, improvement of people’s livelihoods, prosperity, construction of a better society and military strengthening.” He exhorts young people “to dare to dream, work assiduously to fulfil the dreams and contribute to the revitalisation of the nation”46
In consequence of these and other Chinese Government initiatives, trade has been increasingly liberalised and air routes increased, leading to large growth of:
1. international operations in China (many of which generate interest in visita- tion by the Chinese e.g. Swiss companies), 2. Chinese enterprises abroad, and 3. overseas travel and tourism by the Chinese.
The Chinese Government is actively supporting outbound tourism. In a January 2013 meeting with UNWTO Secretary General, Taleb Rifai, the Chairman of the China National Tourism Administration (CNTA), Shao Qiwei, confirmed that tour- ism remained one of the Chinese Government’s key strategic pillars for economic growth, and that outbound tourism will also boost China’s development in the long term. The promotion of outbound tourism is valued because of the benefits of mutual collaboration, the benefits of which will eventually flow back to China 47. The increase in air service connectivity between China and trading partners and tourism destinations in Asia and interregionally has been very strong and will con- tinue to exert a major influence on Chinese outbound tourist flows and directions.
Between 2008/9 and 2013/4, scheduled service capacity from China’s two main cities of Beijing and Shanghai grew by more than double to Thailand and the United States cities of Los Angeles and New York, and by close to double in the peak tourist season on the routes to Sydney (Australia) and Moscow (Russian Federation). The leading European destinations saw capacity increases over the period of up to a quarter, though new European routes were developed. Capaci- ties will continue to increase in line with demand.
46 Chinese Dream. en.wikipedia.org/wiki/Chinese_Dream
47 COTTM – China Outbound Travel and Tourism Market – April 2013. COTRI – China Outbound Tourism Research Institute. www.slideshare.net/COTRI_Outbound/
cotm-china-outbound-travel-and-tourism-market-presentation-april-2013 Liberalisation has led
to expansion of air routes
Chinese Government is actively supporting outbound tourism
Recent policy initiatives contributed to increased travel by Chinese
24
Visa formalities are being eased across the world. While visas are still required for Chinese tourists to major destinations like the United States and Australia, the speeding up of processing is likely to serve to increase the numbers of Chinese FIT travellers.
Figure 14: Nine Important Developments in China’s Outbound Tourism 2013
1
Quantitative Growth
2
New Push Factor Pollution
3
New Push Factor Overcrowding
4
Encouragement by new Chinese Government
5
Visa Policy Dominos Starting to Fall
6
Move Towards More Self Organised Trips
7
Move Towards New Destinations
8
Chinese Investors Shopping Spree
9
Major Players Enter the Scene
1.5 Successful Destination Strategies
Destination regions face increasing competition for the Chinese tourist. There are several factors that will determine the ability of a destination to attract significant flows of Chinese tourists:
1. Extent to which the cultural influences and specific needs of Chinese tourists are understood and catered for,
2. The provision of the right combinations of travel offer to the groups of Chinese tourists being targeted48,
3. Recognition of the increased share of Chinese FIT travel,
4. Developing tourist products and experiences in line with the needs and expectations of the different Chinese market segments,
5. Designing destination marketing to appeal to the Chinese desire for authentic features and offerings,
6. Degree to which China-friendly elements are built into the experienc- es offered,
7. Facilitation of travel to and around the destination.
48 New Chinese Tourists in Europe from 2017. Trend Survey by Z_punkt The Foresight Company in cooperation with the TUI Think Tank at TUI AG, 2012
2 Travel Destinations in the Chinese Market
Based on the investigations and research conducted into recent trends in Chi- nese visitor flows and the comparative assessment that introduces this report, a short list of seven destinations was selected for further examination in respect of the Chinese market. The seven – in alphabetical order - are:
1. ASEAN countries (Republic of Korea, Thailand, Malaysia), 2. Australia,
3. New Zealand, 4. Russian Federation, 5. United States.
The remainder of this chapter illustrates the positioning of these countries in the Chinese market as compared to Europe. The positioning is assessed on factors that facilitate tourism flows, such as visa regimes, transport routes, and the po- litical, socio economic and cultural links existing between the market and each destination.
This section is enriched by an analysis of TripAdvisor ratings on accommodation, attractions and eateries, presented in Appendix 3. While not representative of Chinese travellers, TripAdvisor ratings are used as a proxy for consumers’ ap- preciation of key aspects of a holiday experience across competing destinations.
2.1 Visa Regimes
The detailed comparison of visitor entry requirements for the selected 13 destina- tions competing with Europe considered three elements:
1. Whether the destination imposes a visa requirement for entry to the country,
2. The documentation and other details demanded for issuance of a visa,
3. A qualitative assessment of the “hassle” factor involved in obtaining the visa.
Among the seven countries selected as prime competitors to Europe in the Chi- nese market, all destinations (including ETC member countries) - with the single exception of Thailand, where visas are granted on arrival – require Chinese trav- ellers to obtain a visa ahead of travel.
26
Figure 15: Visa Requirements of Chinese Travellers in Key Destinations Destination Yes/No Requirements/Process
Australia Y Prior to travel application to Australian
authorities in China. Visitor visa sub-class 600 required. Extensive supporting documentation required. From CNY2,060. Paper only
application accepted through post, courier, or via approved travel agent.
ETC Members Y Prior to travel to one of the member country’s authorities in China. Uniform Schengen visa for 25 countries. Supporting documentation required. Up to 15 days. Eur60.
Individual visa application requirements for non- Schengen European countries prior to travel via immigration offices of destinations in China.
Malaysia Y Prior to travel to Malaysian authorities in China in person or through registered travel agency.
6 months passport validity requirement. Fee (RMB80.00, visit 90 days).
New Zealand Y Prior to travel application to New Zealand authorities in China. Counter or postal application. Fee (CNY860 +CNY200 if via an ADS agent or CNY220 if not).
Rep Korea Y Prior to travel to Korean authorities in China.
Supporting documents as determined by the status of their country. Fee (US$30, single visit 90 days). Not required to show an outbound ticket.a
Russian
Federation Y Prior to travel to Russian authorities in China.
Electronic application accepted from January 2014. Confirmation of foreign tourist tour from inbound Russian travel agency.b
Thailand Y (on
arrival since January 2014)
Return ticket, proof of funds for stay. THB1,000.
USA Y Prior to travel application to US authorities in China. Attend interview with passport. One week plus processing. From US$160.
Notes:
a. No visa for Chinese transit travellers through Korea i.e. bound for, and return- ing from, one of 30 European countries with an entry visa for entry into the respective country via Korea, with valid ticket – maximum duration of transit stay 30 days.
b. Visa not required for Chinese tourists staying a maximum of 15 days travel- ling as part of a tour group (5 to 50 persons), accompanied by a representa- tive of a tour operator accredited in both Russia and China.
