Outbound tourists from China

Go west young man

Outbound tourism is topping even the most positive predictions of a decade ago, as Chinese travelers head to the farthest reaches with wanderlust in their hearts and full wallets 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 TV and in magazines, we saved for three years to pay for our vacation there in June this year. When we got to 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. ” Mr. Liu Feng from Shanghai, who first traveled to Europe in 2005.

This reaction to Europe is not uncommon among Chinese tourists who are used, in their own country, to high-end hotel accommodation 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 industry in Europe 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. They mostly 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 on 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, providing extended vacation time.

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 PR 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, but also of those who have, as expressed in a number 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 can operate overseas international travel services and, in 1997, there were only 67 overseas travel agencies in China; by 2004, that number had risen to 528. Recent years have seen the privatization and restructuring of the old state agencies.

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 It remains dominated by state agencies, many of them with outdated attitudes toward service.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

Right now, 90 percent of Chinese traveling abroad do so on group trips, and travel agencies typically receive 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 tourism literature and road and airport signage 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 much negotiation, 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 with visas for business, study or to visit a family member. With ADS, individual Chinese passport holders with financial resources are not restricted from 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 agencies, 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 are 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 business visas or specifically to visit 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 tour guide to keep the passports of all members of the group.

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

Shopping

Shopping is another way for European businesses to benefit from China’s growing wealth and new freedom to travel. 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 that Chinese have traveled abroad and their spending patterns can be irrational. Some just buy anything they can’t buy in China. However, spending by Chinese tourists often does not reflect income levels, so looking at household income or even disposable income levels of China’s population can be misleading. Many spend much more than we could have anticipated.

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 is just $ 1,000.

Challenges

China clearly has great 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 lower prices is competition from creative Chinese operators based in Europe. These agents are willing to use informal networks of business contacts that avoid 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 that provides a minibus driven by a local waiter and until Chinese tourists themselves demand more, this situation may not change. The good news is that we believe Chinese tourists will demand a lot more very soon.

Other challenges:

-Short-term reservations

-Continuous change of programs.

-Unfair competition from 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.