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China’s Outbound Tourists

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Outbound tourism is outpacing even the most positive projections of a decade ago, as Chinese travelers travel to the furthest places with parasitism at heart and stuffing their 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 from TV and magazines, we saved three years to pay for our vacation there in June this year. When we got to Paris we were expecting something really big, but hotel rooms were small, hotel rooms were small. food was poor quality, The people we met seemed a bit cold and we didn’t feel very safe in parts of the city.” Mr. Liu Feng from Shanghai, who went to Europe for the first time in 2005.

This backlash to Europe is not uncommon from Chinese tourists in their home country who are accustomed to high-standard hotel accommodation at low prices, clean and modern transport systems, and very low crime rates.

A few years ago, the number of Chinese tourists traveling abroad was so small that the European industry did not take their views and experiences into account.

But now, the numbers are starting to look impressive, and early movers in the European travel industry are scrambling to find out what can be done to improve Bay’s experience. Liu and others like him.

China is currently the fastest growing market for the European travel industry and with the right approach, hotels, hostels, shops and attractions in Europe are ready to reap huge profits from this newly opened market.

Market

Last year, nearly 31 million Chinese traveled overseas. They mainly visited other Asian destinations such as Hong Kong, Macau, Singapore, Thailand, Malaysia and South Korea, but two million Chinese also went to Europe and this figure will increase every year. By 2020, Europe can expect 13 million Chinese visitors per year.

Travel is especially trendy in February, May and October, which are called China’s ‘Golden Weeks’. In China, the working week is now officially limited to five days, and the minimum annual leave entitlement is 14 days, extending the vacation period.

In 2005, travel guide publishers Lonely Planet announced that they would begin publishing some editions of their books in Chinese in response to the growing number of Chinese travelers. Three of the places where Chinese versions of the itinerary will be published are Great Britain, Germany and Australia.

However, it’s not all straight sailing. The European public relations machine struggles with some unfortunate stereotypes when it comes to China’s views on Europe and its people. “London is foggy, Paris is expensive, Rome is dirty, and Madrid is dangerous” – and these are the views not only of those who have yet to visit, but also of those who have, as expressed in a number of consumer focus groups we’ve conducted. recently.

Travel Agencies

The overall picture of the Chinese travel industry is strong growth driven by rising income levels, relaxation of travel restrictions and the introduction of more holiday seasons. Only a certain number of licensed travel agents have the right to operate international outbound travel services, and in 1997 there were only 67 outbound travel agents in China; By 2004, this number had increased to 528. Recent years have seen the privatization and restructuring of former state institutions.

However, the agency market is fragmented and there are few national players. It remains dominated by state-owned institutions, many of which have outdated attitudes towards service. Private and foreign investment in the industry is encouraged by the Chinese government, but most of the tours offered by existing agencies are not creative in content and style, and the truth is that the industry has a long way to go before it can truly serve the needs. of customers.

Currently, 90 percent of Chinese going abroad do so on group tours, and travel agents typically charge a retail commission of around 5-20 percent on the price of the tour.

Independent travel is often unpopular and one of the most important explanations for this is language. The importance attached to foreign language reading and writing by the Chinese education system makes communication skills weak even for those with good English grades. For the majority of the Chinese population, communicating in another language is not an option. Considering that the tourist literature, road and airport signs in Europe are not yet produced in Chinese, these countries are even more closed to the average tourist.

Passports and Paperwork

Traditionally, Chinese citizens were not allowed to travel freely and did not have passports to do so. In the last three years, this has changed.

After lengthy negotiations, China signed ‘Approved Destination Status’ (ADS) agreements with over a hundred partners, including some European countries. ADS simplifies the exit procedure for Chinese tourists, allowing them to travel with ordinary passports and apply for tourist visas.

Without ADS, Chinese residents can only travel on a visa for work, education or visiting relatives. With ADS, individual Chinese passport holders with financial resources have no restrictions on their overseas travel, provided they can obtain the necessary individual visas to enter the countries they are traveling to. The only restrictions are traveling as part of an official tour group and a companion must be present whenever 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 agents, while also advertising the destination and its products to Chinese consumers*.

History:

1983 Chinese owners are allowed to visit HK and Macao for private business for the first time
2003 Chinese citizens are allowed to apply for special passports using their residence permits, giving the masses the option to travel internationally
2004 Germany becomes the first EU country to welcome Chinese tourists

Truths:

Once a passport is obtained, Chinese citizens can apply for a visa to travel anywhere they want.

· Tourist visas are required for ADS countries, and business or visa for non-ADS countries, especially for visiting friends and relatives. (In the case of Schengen countries, visa agreement access is allowed to all countries that are part of Schengen)

Although free travel is allowed in destination countries after obtaining a visa, if you are traveling in tour groups it is standard practice for the tour guide to hold the passports of all group members.

Travel agencies in China that have ‘lost’ members of their groups while in Europe are quickly blacklisted by the visa issuance operations of Embassies and Consulates in China. The number of ADS-approved tour operators that are permanently or temporarily blacklisted is increasing.

Shopping

Shopping is another way for European businesses to profit from China’s growing wealth and newly granted travel rights. Although the number of tourists is not high, the spending level of Chinese tourists to Europe is high.

For the Chinese, a trip to Europe is often their first overseas trip, and their spending patterns can be irrational. Some buy everything they can’t buy in China. The expenditures of Chinese tourists often do not reflect their income levels, but therefore looking at household income or even the disposable income levels of the Chinese population can be misleading. Many spend much more than we anticipate.

According to French tourism officials, the average visitors to France from China spend US$3,000 on a visit. In contrast, visitors from North America and Europe spend only $1,000 on average.

Difficulties

China clearly has great potential but is proving to be a tough market for many European operators.

One of the ironies of the European tourism industry is that consumers are strictly regulated if they are European; however, if customers are purchasing their products from outside the EU, then several regulations apply.

One of the factors that helped push prices down is competition from creative Chinese operators based in Europe. These agents are willing to use informal networks of business contacts that bypass many of the normal requirements of group tourism. It is difficult for an incumbent tour operator to compete on price with a China Town agent supplying a van used by a local waiter, and that may not change until Chinese tourists demand more. The good news is that we think Chinese tourists will demand much more very soon.

Other challenges:

-Short-term reservations

-Continuous program change

– Unfair competition from small cash paying agencies

-Chinese agents’ lack of understanding of controls on long routes in relation to driving hours (There is hope that the new EU driving legislation will give all operators a level playing field to apply sensible routes.)

-Insufficient knowledge of Europe among Chinese salespeople

-Different habits and tastes of Chinese tourists (behavior in hotels and restaurants is different from what is expected in Europe)

-Chinese tour operators lack knowledge of European Law.