Go West, Young Man
Outbound tourism is outstripping even the most positive predictions of a decade ago as Chinese travellers head to the furthest reaches with wanderlust in their hearts and stuffed wallets in their pockets.
"To be wise, a man must read ten thousand books and travel ten thousand miles." Li Bai (Tang Dynasty poet)
"Immediately after hearing so considerably about Europe's beauty from the Television and magazines, we saved for 3 years to pay for our holiday there in June this year. When we got to Paris, we were expecting some thing really grand but the hotel rooms had been smaller, the food was poor good quality, the individuals we met seemed a bit cold and in some locations of the city, we didn't really feel really secure." Mr. Liu Feng of Shanghai, who went to Europe for the initial time in 2005.
This reaction to Europe is not uncommon from Chinese tourists who are used, in their own country, to high normal hotel accommodation at low rates, clean and contemporary transport systems and very low crime rates.
A couple of years ago, the number of Chinese tourists travelling abroad was so little that their opinions and experiences had been not taken too significantly into consideration by the industry in Europe.
Now, then again, the numbers are beginning to appear impressive and early movers in the travel business in Europe are driving efforts to acquire out what can be done to enhance the experiences of Mr. Liu and others like him.
China is now the fastest growth industry for the European travel industry and with the suitable method, hotels, B&Bs, shops and attractions across Europe stand to win large profits from this newly opened industry.
The Industry
Last year, about 31 million Chinese travelled overseas. In the key, they visited other Asian destinations like Hong Kong, Macao, Singapore, Thailand, Malaysia and South Korea, but two million Chinese also travelled to Europe and that figure is set to rise year on year. By 2020, Europe can expect 13 million Chinese visitors annually.
Travel is especially fashionable in China's so named 'Golden Weeks' - February, Might and October. The operating week in China is now officially limited to five days and the minimum annual leave entitlement is 14 days, giving extended holiday time.
In 2005, the travel guide publishers Lonely Planet announced that they had been to start publishing some editions of their books in Chinese in response to the increasing number of Chinese travellers. Three of the destinations for which Chinese versions of the travel book are to be published are Awesome Britain, Germany and Australia.
Nevertheless, it is not all plain sailing. The European PR machine is battling some unfortunate stereotypes when it comes to Chinese opinions of Europe and its individuals. "London is foggy, Paris is pricey, Rome is dirty and Madrid is harmful" - and these are the opinions of not only those who have not yet visited, but also those who have, as voiced in a series of consumer focus groups we conducted recently.
Travel Agencies
The overall picture of the Chinese travel industry is one of robust growth driven by rising income levels, the relaxation of travel restrictions and a lot more holiday periods getting made out there. Only a specific number of licensed travel agencies are eligible to operate international outbound travel services and, in 1997, there had been only 67 outbound travel agencies in China by 2004, that number had risen to 528. Recent years have noticed privatization and restructuring of the former state owned agencies.
Having said that, the agency market place remains fragmented and there are few national players. It remains dominated by state-owned agencies, a large number of with outdated attitudes to service. Both private and foreign capital flows to the market are being encouraged by the Chinese government but a large number of of the tours supplied by the existing agencies are unimaginative in content material and style, and the reality is that the market has a lengthy way to go prior to it genuinely services the demands of its clients.
At the moment, 90 percent of Chinese going abroad do so on group tours and the travel agencies commonly get a commission of around 5-20 percent on the retail price of the tour.
Independent travel is normally not common and one important explanation for this is language. The Chinese education system's emphasis on reading and writing of foreign languages leaves even those with beneficial grades in English with poor communication skills. For the majority of the Chinese population, communicating in one more language is merely not an option. Given that tourist literature and road and airport signs in Europe are not yet produced in Chinese, these countries are even extra closed to the average tourist.
Passports & Paperwork
Traditionally, Chinese citizens have not been allowed to travel freely and have not had passports with which to do so. In the last three years, this scenario has changed significantly.
Following considerably negotiation, China has signed 'Approved Destination Status' (ADS) agreements with over a hundred partners including some European countries. ADS simplifies the exit process for Chinese tourists, allowing them to travel on ordinary passports and to apply for tourist visas.
Without having ADS, Chinese residents can only travel on visas for enterprise, study or to pay a visit to relatives. With ADS, individual Chinese passport holders with monetary resources have no restrictions on foreign travel, provided they can acquire the individual visas vital for entry to the countries to which they are travelling. The only restriction is that have to travel as portion of an official tour group and an escort must be present at all instances that the group is overseas.
For the European countries, ADS means that countries can legally promote group leisure travel via distribution and sales channels with wholesalers and travel agents as nicely as advertise the destination and its products to Chinese consumers.*
History:
1983 Chinese Mainlanders initial allowed to visit HK and Macao on private small business
2003 Chinese citizens permitted to apply for private passports making use of their residence permits, providing the alternative of international travel to the masses
2004 Germany becomes the initially EU country to welcome Chinese tourists
Details:
· Once a passport has been obtained, Chinese citizens can apply for visas to travel wherever they wish
· For ADS countries, they can apply for tourist visas and for non-ADS countries, they need to acquire business or visas particularly for visiting buddies and relatives. (In the case of the Schengen countries, one visa enables access to all countries that are portion of the Schengen agreement)
· Despite the fact that totally free travel is allowed inside destination countries once the visa has been obtained, if travelling in tour groups it is regular practice for the tour guide to hold onto the passports of all group members
· Travel agents in China that 'lose' members of their groups whilst in Europe are rapidly blacklisted with the visa issuing operations of the Embassies and Consulates in China. The number of permanently or temporarily blacklisted ADS-approved tour operators is steadily increasing.
Shopping
Shopping constitutes one other way for European organizations to acquire from the increasing wealth of China and the newly granted freedoms in travel. Whilst the numbers of tourists could not be high, the level of spending amongst Chinese tourists that do get to Europe, is.
A trip to Europe is normally the initially time for Chinese to travel overseas and their spending patterns can be irrational. Some just obtain anything they cannot invest in in China. The spending of Chinese tourists normally does not reflect income levels still so searching at household income or even disposable income levels of China's population can be misleading. Countless invest a lot alot more than we may perhaps have predicted.
According to French tourist authorities, average visitors to France from China spend US$3,000 on 1 visit. By contrast, average devote by visitors from North America and Europe stands at merely US$1,000.
Challenges
China clearly holds massive potential but for many European operators, it is proving a tricky market place.
One of the ironies of the European tourism business is that it is heavily regulated if the consumers are Europeans but if the customers are buying their items outside the EU, then couple of regulations apply.
1 factor that is helping to drive down rates is competition from inventive Chinese operators based in Europe. These agents are willing to use informal networks of company contacts that bypass lots of of the typical requirements of group tourism. It is difficult for an established tour operator to compete on cost with a China Town agency supplying a mini-bus driven by a nearby waiter and until the Chinese tourists themselves demand additional, this situation may possibly not alter. The superior news is that we believe Chinese tourists will be demanding much a lot more extremely soon.
Other challenges:
-Short term bookings
-Continuous changing of programmes
-Unfair competition from tiny cash paying agents
-From the Chinese agents a lack of understanding about controls on long itineraries with regard to driving hours (There is hope that the new EU driving legislation will give all operators an even playing field to implement sensible itineraries.)
-Insufficient knowledge of Europe amongst Chinese salespeople
-Several habits and tastes of Chinese tourists (behaviour in hotels and restaurants is different to that expected in Europe)
-Lack of knowledge of European Law by the Chinese tour operators.
