Destination: Investment - Messe Berlin · COTRI China Outbound Tourism Research Institute 4 The world's leading independent research institute for information, training, quality …

www.china-outbound.com

Destination: Investment New networks for serving affluent

Chinese visitors

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Organiser: COTRI China Outbound Tourism Research Institute Chair: Prof. Dr. Wolfgang Georg Arlt, COTRI Panelists: Dr. Adam Wu, COO China Business Network Prof. Dr. Gerd Schwandner, Mayor Oldenburg City Dr. Karlheinz Steinmüller, Scientific Director Z_punkt The Forecasting Company


Destination: Investment New networks for serving affluent Chinese visitors

12.15-12.20 h Introduction 12.20-12.35 h Prof. Dr. Arlt: China’s Outbound Tourism 2013 12.35-12.50 h Dr. Adam Wu: Chinese investors as MICE customers 12.50-13.10 h Panel Discusion: Experiences, Scenarios and new opportunities for the tourism industry 13.10-13.40 h Q&A from the audience 13.40-13.45 h Lucky Draw

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China’s Outbound Tourism 2013

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New Chinese Tourists looking for

niche products, new destinations

and investment opportunities

Dr. Wolfgang Georg Arlt Director COTRI

[email protected]

ITB Berlin March 7, 2013


COTRI China Outbound Tourism Research Institute

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The world's leading independent research institute for information,

training, quality assessment, research and consulting relating to the

Chinese outbound tourism market.

Established: 2004

Headquarter: Heide/Germany

China office: Beijing/China

COTRI Country Partner in Australia, Bosnia-Hercegovena, Croatia,

Finland, France, Ireland, Italy, Kosovo, Macedonia, Mexico, Morocco,

Serbia, Slovenia, Tunisia, United Kingdom

Germany: Fritz-Thiedemann-Ring 20 25746 Heide / Germany Phone +49 481 85 55 523 Fax +49 481 85 55 121 E mail [email protected]

China: 101/2B Gui Gu Liang Cheng 1 Nong Da Nan Rd., Haidian District Beijing 100084 / P.R. of China Phone +86 134 2603 6722 E mail [email protected]


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Prof. Dr. Wolfgang Georg Arlt FRGS First visit to People’s Republic of China in 1978 1991-1999 owner of Inbound Tour Operator

China -> Europe (offices in Beijing and Berlin) COTRI founder and director since 2004 Professor for International Tourism Management

at West Coast University of Applied Sciences (Heide) Visiting Professor at universities in China and

United Kingdom Fellow Royal Geographical Society (London) Research Fellow Japanese Society for the Promotion

of Science (Tokyo)

Germany: Fritz-Thiedemann-Ring 20 25746 Heide / Germany Phone +49 481 85 55 523 Fax +49 481 85 55 121 E mail [email protected]

China: 101/2B Gui Gu Liang Cheng 1 Nong Da Nan Rd., Haidian District Beijing 100084 / P.R. of China Phone +86 134 2603 6722 E mail [email protected]


Last week in a major European city Chamber of Commerce

China Tourism workshop: How to attract more Chinese visitors?

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China Tourism workshop: How to attract more Chinese visitors? Shopping!

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China Tourism workshop: How to attract more Chinese visitors? Shopping! How about addressing Chinese investors?

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China Tourism workshop: How to attract more Chinese visitors? Shopping! How about addressing Chinese investors? - Oh no, this is the responsibility of the inbound investment promotion department!

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Last week in a major European city Chamber of Commerce China workshop meeting:

How to attract more Chinese visitors? Shopping! How about addressing Chinese investors also? - Oh no, this is the responsibility of the inbound investment promotion department!

Today, let us try to jump out of the box and discover the new opportunities Chinese investors travelling present to the tourism industry around the world!

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Chinese Outbound travel – approaching the 100 million border-crossings mark

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Global No. 1, increasing segmentation In 2012, 83.2 million border-crossings and 95 billion US$ spending elevate China to the position as the biggest global outbound tourism source market, overtaking Germany and the USA. In 2013, both in terms of numbers of travels (forecast: 95+ million border crossings) and spending (forecast: 110+ billion US$) China will be the undisputed No. 1 global source market 5% of all Chinese (app. 65 mio.) can afford to travel beyond Greater China - app. equal (and mostly identical) with the group of Chinese car owners - app. equal to the total German population 14+ years old Chinese tourists are not only growing in numbers, a rapidly increasing section of the Chinese outbound source market, the “New Chinese Tourists”, look for experiences and new destinations offering high quality services according to the specific Chinese customs, values, and demands

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Growth slowing down…

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… and China’s HNWI getting nervous…

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Survey results from Bank of China/Hurun (10/2012): 44% of all Chinese with more than 10 million RMB (app. 1.25 million Euro) in personal wealth (about one million households) are considering emigration 85% of all Chinese with more than one 10 million RMB in personal wealth are planning to send their child to study at a foreign university


… but outbound travel continuing to expand

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China’s economic growth: single digit Wealth creation slowing down China’s outbound tourism: double digit Importance as consumption pattern grows in importance China for Hong Kong, Macau, Taiwan by far most important source market China also for growing number of other destinations most important source market, examples: Australia, Maldives For Europe: most important Asian source market, 2012 +20%


The “New Chinese Tourists” – Opportunities and challenges

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2012: Diversification of destinations Hong Kong and Macau loosing market share

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Hong Kong +11% Macau +5% Taiwan +57% Thailand +62% Singapore +35% Malaysia +25% USA +41% Switzerland +27% Germany +19% Spain +55% N. Zealand +35% Dubai +29% Japan Jan-Sept +71%, Oct-Dec -37%


Niche products and destinations gaining ground

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Package tours no longer deliver much bragging power More self-organized travelers from China are slowing down and spreading

further afield Desperately seeking: Simplicity, authenticity (with Chinese characteristics) Getting away from it all, clean air and genuine products New Chinese Tourists are arriving in special locations, doing special things

and are staying for more than just a snapshot Most of them have already been to Europe and come as repeat visitors Appearance of the first ever generation for whom international travel is a

normal experience since childhood Niche products get a chance to profit from Chinese customers – and small

niches in China are still big


New Chinese Tourists – why do they exist?

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15 years experience since the official start of outbound leisure tourism More than 1.5 million Chinese have finished their studied outside China

since 1978; most of them went back Currently app. 1 million Chinese students in USA and Europe each About 3 million households possess personal wealth of at least 1 million US$ Average age of Chinese millionaire: 39 years About 1 million households with personal wealth of at least 1 million Euro More than 60,000 households with personal wealth of more than 100 million

RMB (app. 12 million Euro) More than 4,000 households with personal wealth of more than 1 billion

RMB (app. 120 million Euro) 550 million active internet users


New Chinese Tourists – becoming “normal” (a.k.a. like us)?

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Package tours developed a negative image, mostly for lower end of upper class (“rich coalmine owner”), first-time visitors, or very specialised offers (bird photography in Bhutan)

More experience and language skills lead to different forms of “semi-” or “partly”-organized trips with tour operators providing visa, air trip and maybe a few hotel bookings

Self- or semi-self organized travellers are however not be confused with “individual” travellers in the western sense

New Chinese Tourists are still Chinese: They are still happy to see signage and other information in Chinese as a sign of respect for their country, they will still rely mainly on peer group information from other Chinese, they will still travel outside Asia for prestige, education and investment, not for holidays, they are still “Money-rich, Time-poor”


Travel motivation

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Travelling long distance means for Chinese outbound travellers first of all:

Investment in - Personal prestige within the group - Self-esteem - Social capital - Learning But also: - Business opportunities - Investment in Real Estate / companies


Travel goals

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If inter-continental travel is investment, the services and products offered have to be organised in a way to guarantee a good Return on Investment (ROI):

Value for money and for time Guaranteed quality as seen from a Chinese point of view No more time spent on an activity as needed for prestige gain Supporting the bragging value of a place/an activity: famous, typical, oldest/highest/awarded, celebrities choice, unusual, hard to get, VIP only, authentic, as seen in TV and movie Connecting fun und investment opportunities Giving face to China and all Chinese Without risk


Travel and Real Estate Overseas Investment

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Chinese private investors in almost all cases combine investment with travel because:

Preference to personally check and decide according to Chinese micro-management style Lack of information and experience when buying property makes delegation more difficult Almost all Chinese HNWIs are first-generation rich Opportunity to combine pleasure trip and shopping with real estate acquisition Opportunity to explain real estate acquisition trip as tourism Preference to minimize the number of (Chinese) persons involved in the handling of the buying process


How to learn to provide service quality the way the New Chinese Tourists want it and how to communicate it to the market?

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Developing successful niche products

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Consulting, Market Research, Strategy Development and Coaching for Tourism Product adaptation and Marketing optimisation China Market Entry Support for Investment-related Service Providers in cooperation with


Thank you for you attention – looking forward to your questions and comments during the Q&A discussion! Contact: [email protected]

Have a successful Year of the Water Snake!

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mailto:[email protected]



Destination: Investment - Messe Berlin · COTRI China Outbound Tourism Research Institute 4 The world's leading independent research institute for information, training, quality …

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