China, the Future of Travel Introduction

China outbound travel handbook 3rd edition

Author: Roy Graff Contributing Editor: Sienna Parulis-Cook

2015

the Future of TravelChina

Table&of&Contents&

FOREWORD!......................................................................................................................................................!!INTRODUCTION:*TWO*DECADES&OF&CHANGE!......................................................................................!!STRUCTURE'OF'THE'CHINESE$TRAVEL$INDUSTRY!.............................................................................!!GOVERNMENT(TOURISM(BODIES!........................................................................................................................!!ADS:!APPROVED'DESTINATION(STATUS%POLICY!...............................................................................................!!VISA#FREE$DESTINATIONS!..................................................................................................................................!!WHOLESALE'AND'RETAIL'TRAVEL'AGENCIES!.....................................................................................................!!CHINA’S"TOURISM'LAW!......................................................................................................................................!!CHINESE&CURRENCY!............................................................................................................................................!!PASSPORTS'AND'VISAS!........................................................................................................................................!!MEDIA,'PR'AND'MARKETING$IN$CHINA!..................................................................................................!!CHARACTERISTICS)OF)THE"CHINESE&MEDIA!......................................................................................................!!TELEVISION!.........................................................................................................................................................!!RADIO!..................................................................................................................................................................!!NEWSPAPERS!.......................................................................................................................................................!!CONSUMER(MAGAZINES!......................................................................................................................................!!TRADE%MAGAZINES!.............................................................................................................................................!!INTERNET!............................................................................................................................................................!!CASE$STUDY%1:!THE#BEGINNINGS#OF#ONLINE$TRAVEL!.........................................................................................!!CASE$STUDY%2:!CHINESE&DIGITAL&MARKETING!....................................................................................................!!SOCIAL&MEDIA/MOBILE!......................................................................................................................................!!CASE$STUDY%3:!ENGAGING%CHINESE&SOCIAL&MEDIA!............................................................................................!!ADVERTISING*AND*PUBLIC"RELATIONS!..............................................................................................................!!LUXURY%CONSUMER%EVENTS!...............................................................................................................................!!FOREIGN'SETTINGS'IN'FILM$AND$TV!SERIES!......................................................................................................!!KEY#OPINION%LEADERS!......................................................................................................................................!!CASE$STUDY%4:!REACHING(A(NEW#MARKET!........................................................................................................!!THE$CHINESE$TRAVELLER!..........................................................................................................................!!WHO#TRAVELS?!...................................................................................................................................................!!CASE$STUDY%5:!THE#CHANGING&FACE$OF$BUSINESS&TRAVEL!...............................................................................!!CASE$STUDY%6:!UNDERSTANDING*THE*SEGMENTED'MARKET!.............................................................................!!MAJOR%MARKETS%WITHIN%CHINA%AND%THEIR%DEFINING$CHARACTERISTICS!........................................................!!CASE$STUDY$7:!UNDERSTANDING*GREAT%CHINA%DISPARITIES!.............................................................................!!NICHE%DEMOGRAPHIC%MARKETS!..........................................................................................................................!!CASE$STUDY%8:!TARGETING(CHINESE&HNWIS!.....................................................................................................!!CASE$STUDY%9:!ADVENTURE(SPORTS&TOURISM!...................................................................................................!!CASE$STUDY%10:!THE#INDEPENDENT&TRAVELLER!...............................................................................................!!WHERE$DO$CHINESE&TRAVEL&TO?!......................................................................................................................!!DESTINATION(ASIA!...............................................................................................................................................!!DESTINATION(AUSTRALIA/NEW#ZEALAND!..........................................................................................................!!DESTINATION(EUROPE!.........................................................................................................................................!!CASE$STUDY%11:!THE#GROUP%TRAVELLER!...........................................................................................................!!DESTINATION(NORTH%AMERICA!...........................................................................................................................!!DESTINATION(MIDDLE%EAST!................................................................................................................................!!

DESTINATION(AFRICA!..........................................................................................................................................!!DESTINATION(SOUTH%AMERICA!...........................................................................................................................!!HOW#MANY$CHINESE&TRAVEL&ABROAD?!..............................................................................................................!!WHEN$DO$CHINESE&TRAVEL?!.............................................................................................................................!!HOW#MUCH#DO#CHINESE&SPEND&WHEN&TRAVELLING?!......................................................................................!!CASE$STUDY%12:!SHOPPING'AS'PART$OF$INTERNATIONAL)TRAVEL!.....................................................................!!WHAT$ARE$THE$EXPECTATIONS%OF%CHINESE&WHILE&TRAVELLING?!..................................................................!!EXPLORING)CULTURAL&DIFFERENCES!................................................................................................................!!BEHAVIOUR)TRENDS)OF)CHINESE&WHILE&TRAVELLING!.....................................................................................!!RECOMMENDATIONS+FOR+PROPER%SERVICE%AND%ETIQUETTE!...........................................................................!!ADVICE&ON&THE&CHINESE&LANGUAGE!.................................................................................................................!!GOVERNMENTS’!FEAR%OF%ILLEGAL%IMMIGRATION!..............................................................................................!!WORKING(WITH(THE(CHINESE$TRAVEL$TRADE!..................................................................................!!WORKING'WITH'THE'TRADE"#!BUSINESS'ETIQUETTE'ADVICE!..........................................................................!!TRAVELLING)IN)CHINA%AS%A%FOREIGNER!............................................................................................................!!TRAVEL&EXHIBITIONS&IN!CHINA!.........................................................................................................................!!RELEVANT'TRAVEL'CONFERENCES!......................................................................................................................!!CHALLENGES(AND(RECOMMENDATIONS)FOR)ATTENDING/EXHIBITING)IN)CHINA!............................................!!LOOKING&TO#THE#FUTURE#OF#TRAVEL!................................................................................................................!!CONTACT&DETAILS!................................................................................................................................................!!

Introduction:!Two$Decades$of$Change&

I entered into the Chinese tourism market by chance, thanks to a student

job I took on while learning Mandarin in Taiwan in the 1990s, which in turn led

to a job in London for Gulliver’s Travel Associates (GTA), a global wholesaler

of ground handling and accommodation. It provided me with experience of

working with Chinese tour groups at the early days of Chinese outbound

tourism to Europe. But even then, I didn’t expect the industry to grow and

evolve as quickly as it has. Not until I took an offer to work and live in China in

2002, and saw the changes up close as they happened, did I understand how

dynamic the sector is and how strong is the desire of Chinese to travel

abroad. If you consider Chinese citizens were not allowed to travel for leisure

until the 90’s, this energy is very understandable. And while many Chinese

are still relatively inexperienced travellers who can lack the confidence of

tourists from other countries, they are catching up quickly. The fast pace of

change continues to amaze and excite me. The industry is following a

standard evolution process, but it is happening faster and at a larger scale

than anywhere else in the world.

After having spent three years in China running an outbound travel

business, I returned to London in 2005 and saw potential where others still did

not. I had seen first-hand the growth of interest in travelling abroad, but at that

time, the number of destinations that Chinese citizens were allowed to visit as

tourists under China’s Approved Destination Status (ADS) policy was quite

limited. When Britain signed the agreement that year, two years after the other

EU countries, there was much talk in the UK media about the potential of

Chinese tourism. But even then, very few people understood the significance

of this trend. Seeing the potential to help educate the inbound sector and stay

involved in China tourism, I launched consulting company ChinaContact, and

partnered with a handful of far-sighted tour companies, attractions and

tourism boards that wanted to understand more. That same year, I worked

together with the inbound trade association UKinbound and the British tourist

board VisitBritain to organise their very first delegation to China.

In the decade since, ChinaContact has consulted with national and

regional tourism boards including VisitBritain, Tourism Ireland, PromPeru and

the Ghana Tourist Board. The company has given training and helped conduct

sales and education trips to China for many tour operators and hotel chains.

The work with destinations and companies took me around the world, as more

destinations on all continents became interested in attracting Chinese visitors.

It hasn’t all been smooth sailing. Communicating the potential of Chinese

tourism to the industry was a real challenge when I started out. Chinese tour

groups were not prized, and sentiment was even negative in the early years;

at that time, Chinese tourists were known for travelling in large groups,

spending most of their time on the tour bus and embarking on whirlwind tours

of 10 countries in two weeks or worse, while eating only Chinese food, staying

at cheap hotels, chain-smoking and failing to appreciate the culture or

intricacies of their destinations. These large groups and multi-country tours do

still exist, but the profile of the Chinese tourist has changed significantly.

Chinese tourists have quickly become much more sophisticated, moving

away from bus tours and towards independent, self-organised travel, with trips

to smaller destinations off the beaten track now a major draw. At the same

time, luxury travel and shopping have taken off, and the spending power of

Chinese has changed the very conservative attitudes of Western people

about China and Chinese people. These developments have led me to found

the partnership China Edge -aimed at helping the luxury sector in the UK - in

2013.

While the global economic recession posed challenges to ChinaContact as

a small business, we were fortunate that Chinese outbound tourism emerged

as the only market to steadily continue its growth during this time. I am often

asked why I don’t start my own travel company. Apart from the fact that I find

working with different destinations and businesses around the world to be

varied and satisfying, I also think my knowledge and experience is put to

better use in the strategic work I do to prepare destinations, governments and

businesses to handle Chinese visitors and plan their market entry approach.

These clients have the large investment, scale and resources needed to

create a successful business on the back of the Chinese market, but they

need someone to guide them on their way.

The opportunities and challenges will continue to develop as the Chinese

outbound tourism market does. The growth of independent and self-organized

tours is especially important, as they will open up “off-the-beaten track”

destinations to Chinese travellers and create the need for more localised

services for independent travellers, including Chinese audio tours, Chinese

travel guides that specialise in specific themes and sectors, cruise ship travel

and adventure travel.

At the same time, Chinese from second-tier and third-tier cities are

travelling out of the country in greater numbers. Their relative inexperience

and lack of knowledge about other countries mean the potential for poor

behaviour is still there, though they will be criticised by other Chinese, online,

and self-correct faster. Indeed, this is just one way in which the internet has

become a crucial factor that influences the Chinese market. In general, the

impact of digital resources has been more pronounced in China than in other

countries, and part of my work is also helping those outside of China take

advantage of this phenomenon.

One way in which promotion and marketing has changed over the past

decade, is in the prevalence of social media and mobile channels to reach the

target audience. This can be a low-cost, quick and effective solution when

done right. I included a few case studies in this book to illustrate the

opportunity.

The Western hospitality and tourism industry will need to keep pace with

changes and anticipate what’s coming next to continue to take advantage of

the boom in Chinese tourism. Chinese hotel chains and travel organisations

are investing around the world, and increasingly assertive Chinese companies

may well want to take over more of the supply chain in the future. The

international travel industry must be ready for this, and know how to make

their services enticing enough to attract and maintain a Chinese clientele

while not alienating other prospects.

When I launched ChinaContact, I knew what was coming but could not

imagine the impact would be so dramatic and so fast. Keeping abreast of new

developments and anticipating trends in Chinese outbound tourism will

continue to be crucial for both the work that I do and for the travel industry as

a whole. For this reason, we continually publish free weekly and monthly

news summaries and opinion pieces on the Chinese outbound travel sector.

- Roy Graff, 2015

China outbound travel handbook 3rd edition

Author: Roy Graff Contributing Editor: Sienna Parulis-Cook

2015

the Future of TravelChina

Roy began his career in tourism in 1995 in Taipei, Taiwan. He worked on business development, public relations, marketing, distribution, sales and e-commerce. Between 1997-2000 Roy worked with Chinese and Asian tour groups to Europe and North Africa. From 2002-2005 he was tasked with the full-scale development of outbound independent travel business in China for Gullivers Travel Associates (owned by Kuoni Group since

2012). During that period he developed excellent relationships with leaders of the Chinese tourism sector and enjoyed a strong reputation for excellence and cultural sensitivity. He is a fluent Mandarin Chinese speaker and student of Chinese philosophy, literature and poetry.

Roy created ChinaContact in 2005 in London and works with tourism boards, hotel chains, tour operators, technology companies, retailers and event companies on strategies and implementation of China market access. He offers is own personal experience and facilitates introductions to high-level executives, senior officials and media publishers in China.

China – the Future of Travel will give you the understanding and insights you need in order to operate successfully in this challenging, complicated but potentially hugely profitable marketplace. You will learn who is travelling abroad from China, what are the best ways of reaching them, how the travel industry is organised in China and how best to show your hospitality to Chinese visitors abroad. This 2015 edition contains many interviews and case studies from experts and industry insiders throughout the Chinese outbound tourism sector, providing practical illustrations and professional insights into current market trends and future developments.

This book is designed to be the travel industry professional’s definitive and user-friendly tool for effective promotion and marketing in China. It will facilitate the establishment of profitable relationships with the right counterparts in China and improve your ability to welcome the Chinese traveller successfully. Whether you are just starting out or looking to scale your business in China, you will find invaluable information here.

1858097809939

ISBN 9780993185809

Published by Leyoba Limited