Outbound tourists from China

Go west, young man

Outbound tourism is beating even the most positive predictions of a decade ago, as Chinese travelers head to the farthest places with wanderlust in their hearts and wallets full in their pockets.

“To be wise, a man must read ten thousand books and travel ten thousand miles.” Li Bai (Tang dynasty poet)

“After hearing so much about the beauty of Europe on television and in magazines, we saved for three years to pay for our vacation there in June this year. When we arrived in Paris, we expected something really great, but the hotel rooms were small, The food was of poor quality, the people we met seemed a bit cold and in some areas of the city we did not feel very safe. ” Liu Feng from Shanghai, who first traveled to Europe in 2005.

This reaction to Europe is not uncommon for Chinese tourists who are used, in their own country, to high-end hotel accommodations at low prices, clean and modern transportation systems, and very low crime rates.

A few years ago, the number of Chinese tourists traveling abroad was so small that the European industry did not take much into account their opinions and experiences.

Now, however, the numbers are starting to look impressive and pioneers in the travel industry in Europe are pushing forward efforts to discover what can be done to improve the experiences of Mr. Liu and others like him.

China is now the fastest growing market for the European travel industry and with the right approach, hotels, B & Bs, shops and attractions across Europe can make huge profits from this newly opened market.

The market

Last year, about 31 million Chinese traveled abroad. In general, they visited other Asian destinations such as Hong Kong, Macau, Singapore, Thailand, Malaysia and South Korea, but two million Chinese also traveled to Europe and that number will increase year after year. By 2020, Europe can expect 13 million Chinese visitors a year.

Travel is particularly in vogue in China’s so-called ‘Golden Weeks’: February, May and October. The working week in China is now officially limited to five days and the minimum annual leave entitlement is 14 days, which grants an extended vacation period.

In 2005 Lonely Planet travel guide publishers announced that they would start publishing some editions of their books in Chinese in response to the growing number of Chinese travelers. Three of the destinations for which Chinese versions of the travel book will be published are Great Britain, Germany and Australia.

However, not everything is simple. The European public relations machine is battling some unfortunate stereotypes when it comes to Chinese views on Europe and its people. “London is foggy, Paris is expensive, Rome is dirty and Madrid is dangerous”, and these are the opinions not only of those who have not yet visited it, but also of those who have, as expressed in a series of groups focal points of consumers that we carry out. Recently.

Travel agency

The overall picture for the Chinese travel industry is one of strong growth driven by rising income levels, relaxation of travel restrictions and the availability of more vacation periods. Only a certain number of licensed travel agencies are eligible to operate international travel services abroad and, in 1997, there were only 67 outbound travel agencies in China; by 2004, that number had risen to 528. Recent years have seen the privatization and restructuring of the former state agencies.

However, the agency market remains fragmented and there are few national players. It remains dominated by state agencies, many with outdated attitudes toward service. The Chinese government encourages both private and foreign capital flows to the industry, but many of the tours offered by existing agencies are unimaginative in content and style, and the reality is that the industry has a long way to go before really serve. the needs of your customers.

Right now, 90 percent of Chinese traveling abroad do so on group trips, and travel agencies generally take a commission of around 5 to 20 percent on the retail price of the trip.

Independent travel is generally not popular and a key explanation for this is language. The Chinese education system’s emphasis on reading and writing foreign languages ​​leaves even those with good grades in English with poor communication skills. For most of the Chinese population, communicating in another language is simply not an option. Since tourist literature and road and airport signs in Europe are not yet produced in Chinese, these countries are even more closed to the average tourist.

Passports and procedures

Traditionally, Chinese citizens have not been allowed to travel freely and have not had passports to do so. In the last three years, this situation has changed dramatically.

After many negotiations, China has signed ‘Approved Destination State’ (ADS) agreements with more than 100 partners, including some European countries. ADS simplifies the departure procedure for Chinese tourists, allowing them to travel with ordinary passports and apply for tourist visas.

Without ADS, Chinese residents can only travel on visas for business, study, or family visits. With ADS, individual Chinese passport holders with financial resources have no restrictions on traveling abroad, as long as they can obtain the individual visas necessary to enter the countries they are traveling to. The only restriction is that you must travel as part of an official tour group and a companion must be present at all times the group is abroad.

For European countries, ADS means that countries can legally promote group leisure travel through distribution and sales channels with wholesalers and travel agents, as well as advertise the destination and its products to Chinese consumers. *

History:

1983 Mainland Chinese were first allowed to visit HK and Macau for private business

2003 Chinese citizens allowed to apply for private passports using their residence permits, offering the option of international travel to the masses

2004 Germany becomes the first EU country to receive Chinese tourists

Facts:

Once a passport has been obtained, Chinese citizens can apply for visas to travel wherever they want

For ADS countries, they can apply for tourist visas and for non-ADS countries, they must obtain visas for business or specifically for visiting friends and family. (In the case of Schengen countries, a visa allows access to all countries that are part of the Schengen agreement)

Although free travel within destination countries is allowed once the visa has been obtained, if traveling in tour groups, it is standard practice for the guide to have the passports of all members of the group.

Travel agents in China who ‘lose’ members of their groups while in Europe are quickly blacklisted from visa issuance operations by embassies and consulates in China. The number of ADS approved tour operators that are permanently or temporarily blacklisted is constantly increasing.

Shopping

Shopping is another way for European businesses to benefit from China’s growing wealth and recently granted travel freedoms. While the number of tourists may not be high, the level of spending among Chinese tourists arriving in Europe is.

A trip to Europe is often the first time for Chinese to travel abroad and their spending patterns can be irrational. Some just buy anything they can’t buy in China. However, the spending of Chinese tourists often does not reflect income levels, so considering household income or even disposable income levels of China’s population can be misleading. Many spend much more than we could have predicted.

According to French tourism authorities, average visitors to France from China spend $ 3,000 on one visit. In contrast, the average spend by visitors from North America and Europe stands at just $ 1,000.

Challenges

China clearly has enormous potential, but for many European operators, it is proving to be a difficult market.

One of the ironies of the European tourism industry is that it is heavily regulated if the consumers are European; But if customers buy your products outside the EU, few regulations apply.

One factor helping to drive down prices is competition from European-based creative Chinese operators. These agents are willing to use informal networks of business contacts that circumvent many of the normal requirements of group tourism. It is difficult for an established tour operator to compete on price with a China Town agency supplying a minibus driven by a local waiter, and until the Chinese tourists themselves demand more, this situation may not change. The good news is that we believe Chinese tourists will be demanding much more very soon.

Other challenges:

-Short-term reservations

-Continuous change of programs

-Unfair competition of small cash payment agents.

-From Chinese agents, lack of understanding about controls on long itineraries regarding driving hours (there is hope that the new EU driving legislation will give all operators a level playing field to implement sensitive itineraries).

-Insufficient knowledge of Europe among Chinese sellers

-Different habits and tastes of Chinese tourists (behavior in hotels and restaurants is different than expected in Europe)

-Lack of knowledge of European legislation by Chinese tour operators.

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