Understanding outbound Chinese tourism: trends, developments and challenges it brings to the Netherlands/ Europe

 

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It goes without saying that since 2011 the Chinese outbound tourism market has experienced rapid growth on yearly basis. This can be explained by the growing middle class, rising acceptance of online purchase of tourism products, increased availability of air travel routes and simplified visa application processes. According to the statistics provided by China National Tourism Administration, in 2010 the number of outbound tourists climbed to 57 million, a year-on-year increase of 20.4% (2010 Bulletin of Tourism Statistics of the People’s Republic of China, 2010). Based on the data provided by Ctrip, the largest China online travel agency, the Chinese made more than 120 million outbound trips in 2015, up 12 percent year-on-year (Outbound travelers shrug off declines in yuan value, 2016).  So, the dynamics of its outbound travel is obvious, the potential is undeniably huge. Hence, it is quite important for the European tourism industry to have a more profound insight into this development, understand the trends and take into account the potential opportunities and threats it may bring with it. 

Speaking about the trends and developments, it is important, in my opinion, to focus on the following one:

• Travelling in groups with arranged guided tours still remains popular with the Chinese, however there is also a new generation of young travelers who more often opt for the individual travel experiences. They also prefer personalized offers with the touch of authenticity rather than standard travel packages. Having diverse motivations, they seek for adventure traveling, road trips or any new unique and fresh experiences the European destinations can offer. Euromonitor International offers an interesting insight into demographical breakdown of the Chinese outbound travelers (Figure 1) (Online Travel Sales To Residents in China, 2016).

 

Figure 1. Leisure Outbound Demographics 2010-2015

•  Young Chinese travelers aged between 25 and 35 account for 45% of outbound travelers from China. They are followed by the middle-aged Chinese travelers (36-45 years old) who make 28% share. In terms of city-wise breakdown, half of overseas tourists come from the big cities like Shanghai, Beijing, Shenzhen and Hangzhou.

• Combination of traveling and shopping still remains the consistent trend among the Chinese tourists. Their purchasing power is high and they are eager to spend on luxury items. This interest in luxury shopping can be explained by the price gap which exists between goods in Europe and the same goods sold in China. High taxes imposed on imported luxury items make it cheaper for the Chinese to travel to Europe and buy products there. Besides, the Chinese are also known for their tendency to make substantial purchases in duty-free shops.

 

Source: chineseshoppers.wordpress.com

• In the majority of cases the Chinese tourists do not travel to one particular destination, but want to cover a lot of European cities during the limited period of time. So, in other words, they are money-rich but time-poor. In the Netherlands, for example, the average stay lasts for 1.6 night. However, the number of incoming Chinese tourists who arrive to the Netherlands is steadily increasing (by 21% to approximately 300,000 people in 2015). In 2016 NBTC expects the increase by 5%  (Almost 15 million tourists in 2015, 2016).

• Another important aspect is seasonality in the Chinese traveling pattern. Most of the time they travel during the Spring Festival (January – February), which marks the beginning of the Chinese year, the Labour Day Holiday (in May) and the National Day of the People’s Republic of China (1 October). This is a great opportunity for the European destinations to smooth seasonal demand, as these are considered to be the low seasons in many Western countries (Andreu, Claver, & Quer, 2013).

Taking into account potential tourist numbers, targeting Chinese visitors is an undeniable benefit. Another question is what challenges it might impose on the European tourist industry. As it was mentioned earlier, there is a kind of shift in the Chinese travel behavior. More and more people tend to travel individually rather than in groups, using the online booking service. So, the first challenge for the European hotels is to stimulate travelers to book directly with them instead of using the online travel agencies. How they can do that? For example, by increasing their presence in the local social media or television platforms like Youku Tudou (China Outbound, the Olympic Effect and Personalisation - Euromonitor International Reports from the WTTC Asia Summit, 2013).  

Next important aspect is the capacity of the most popular European destinations like Paris, Barcelona, London, Amsterdam. These cities are already overcrowded with tourists. The inflow of big numbers of the Chinese might make the situation even more tricky, challenging the cities’ infrastructure systems.

Third challenge is the increasing necessity to segment the market and cater for the specific group needs. Most Western countries focus on the rich young generation (18-36 y.o.), but, in my opinion, the middle segment (40-65 y.o.) should not be underestimated and overlooked. They make a lucrative market as well, having a good disposable income. So, the European tourism boards should investigate the preferences of each segment and offer personalized travel experiences with due account of tastes and cultural sensitivities. 

Another important issue is security as the Chinese are highly sensitive to safety aspects. The recent wave of terrorist attacks in Europe makes the potential visitors uneasy and less enthusiastic about traveling to the risky areas. Thus, this issue has to be seriously considered and tackled on a short-term basis. 

Summing up, it makes sense to underline the importance of this booming Chinese outbound tourism for Europe. The advantage is obvious, the potential is huge, but there are a number of challenges that the main European tourism institutions should face in order to provide smooth and spotless travel experience.  

References

2010 Bulletin of Tourism Statistics of the People’s Republic of China. (2010). Retrieved from China National Tourism Administration: http://en.cnta.gov.cn/Statistics/TourismStatistics/201507/t20150707_721710.shtml

Almost 15 million tourists in 2015. (2016, January 21). Retrieved from NTBC Holland Marketing: http://www.nbtc.nl/en/home/article/almost-15-million-tourists-in-2015.htm

Andreu, R., Claver, E., & Quer, D. (2013). Chinese Outbound Tourism: New Challenges for European Tourism. Enlightening Tourism. A Pathmaking Journal, 3(1), 44-58. Retrieved from http://www.uhu.es/publicaciones/ojs/index.php/et/article/view/2097

China Outbound, the Olympic Effect and Personalisation - Euromonitor International Reports from the WTTC Asia Summit. (2013, September 25). Retrieved from Euromonitor International: http://www.portal.euromonitor.com.saxion.idm.oclc.org/portal/analysis/tab

Online Travel Sales To Residents in China. (2016, August 02). Retrieved from Euromonitor International: http://www.portal.euromonitor.com.saxion.idm.oclc.org/portal/analysis/tab

Outbound travelers shrug off declines in yuan value. (2016). Retrieved from China National Tourism Administration:http://en.cnta.gov.cn/News/OverseasOffices/201606/t20160620_774740.shtml