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2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
2013 European Cities Marketing Presentation
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2013 European Cities Marketing Presentation

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  • 1. www.china-outbound.comPrestige, Respect, InvestmentHow hospitality and service the Chinese waywill ‘make’ or ‘break’ your China businessin the coming yearsCOTRI China Outbound Tourism Research InstituteProf. Dr. Wolfgang Georg Arlt
  • 2. www.china-outbound.comIntroductionChinese Outbound Tourism – the first 15 yearsChinese Tourists in Europe:- Market Segments- Seeking Prestige, Demanding Respect- Investment and Return on InvestmentChinese Outbound Tourism – the next 5 yearsConclusion2
  • 3. www.china-outbound.comIntroductionChinese Outbound Tourism – the first 15 yearsChinese Tourists in Europe:- Market Segments- Seeking Prestige, Demanding Respect- Investment and Return on InvestmentChinese Outbound Tourism – the next 5 yearsConclusion3
  • 4. www.china-outbound.comCOTRI China Outbound Tourism Research Institute4The worlds leading independent research institute for information, training,quality assessment, research and consulting relating to the Chinese outboundtourism market.Established: 2004Headquarter: Heide (Germany)China offices: Beijing, Shanghai, GuangzhouCOTRI Country Partner in: Belgium, Bosnia-Hercegovina, Croatia, Estonia, Finland,France, Ireland, Italy, Kosovo, Latvia, Lithuania,Luxembourg, Macedonia, Mexico, Morocco,Netherlands, New Zealand, Peru, Romania, Russia,Serbia, Slovenia, Tunisia, United Kingdom, USACOTRI Germany Headquarter:Fritz-Thiedemann-Ring 2025746 Heide / GermanyPhone +49 481 85 55 523Fax +49 481 85 55 121Email info@china-outbound.comCOTRI China Headquarter:101/2B Gui Gu Liang Cheng1 Nong Da Nan Rd., HaidianBeijing 100084 / P.R. of ChinaPhone +86 134 2603 6722Email china@china-outbound.comCOTRI Office Shanghai:Suite 1512 Shui On Plaza333 Huaihai Rd.Shanghai 200021COTRI Office Guangzhou:Suite 2412 South Tower WTC371-375 Huanshi East Rd.Guangzhou 510095
  • 5. www.china-outbound.com5Prof. Dr. Wolfgang Georg Arlt FRGSFirst visit to People’s Republic of China in 19781991-1999 owner of Inbound Tour OperatorChina -> Europe (offices in Beijing and Berlin)COTRI founder and director since 2004Professor for International Tourism Managementat West Coast University of Applied Sciences (Heide)Visiting Professor at universities in China andUnited KingdomFellow Royal Geographical Society (London)Research Fellow Japanese Society for the Promotionof Science (Tokyo)Latest publications:Guest Editor Special Issue:China Outbound Tourism,Tourism Planning & Development10/2, May 30, 2013Editor Online quarterly:China Outbound MarketIntelligenceFirst issue July 2013
  • 6. www.china-outbound.comGood news: New Chinese government starting campaign againstconspicuous consumption, but outbound tourism is exceptedJanuary 2013: Chairman of the China National Tourism Administration (CNTA),Shao Qiwei: “Outbound tourism will boost China’s development in the long-term.The government, and particularly CNTA, will continue to promote the travelling ofChinese people abroad as we believe in the mutual benefits of collaboration. Bycontinuing to send Chinese travellers to Europe, the benefits will eventually flowback to China.” (Traveldaily Asia)April 2013: “The 2013 Annual Conference of Boao Forum for Asia opened on themorning of April 7th in Boao, Hainan. President Xi Jinping said in his keynotespeech at the opening ceremony that China in the next five year .. will investUS$500 billion in foreign countries, and have probably over 400 million touriststraveling abroad.” (Xinhua News Agency)For the first time ever a Chinese communist party leader speaks internationally– and in a positive way – about outbound tourism. Clear signal: Outboundtravel is political correct and supported by the party and government.6
  • 7. www.china-outbound.comMore good news: New Chinese government runs campaign againstconspicuous consumption, but outbound tourism is exceptedIn first quarter 2013 sales of Ferrrari and other high-end cars as well as exports ofSwiss watches to China drop by 25%Turnover for high-end restaurants in China collapses, spring delecacies like„daoyu“ fish and „mingqian“ tea find no marketMilitary vehicle get new number plates, restrictions on use by civilians and onhigh-end cars7
  • 8. www.china-outbound.comGrowth slowing down…8
  • 9. www.china-outbound.com… and China’s HNWIs getting nervous…9Survey results from Bank ofChina/Hurun (10/2012):44% of all Chinese with morethan 10 million RMB (app. 1.25million Euro) in personal wealth(about one million households)are considering emigration85% of all Chinese with morethan one 10 million RMB inpersonal wealth are planning tosend their child to study at aforeign university
  • 10. www.china-outbound.com… but even more good news: Chinese outbound travel willcontinue to expand10China’s GDP growth: single digit to stayWealth creation slowing downChina’s outbound tourism growth:double digit continuingChina in Asia-Pacific: most importantglobal source market for many countriesChina in Europe: most importantAsian source market, 2012 +20%
  • 11. www.china-outbound.com11
  • 12. www.china-outbound.com12
  • 13. www.china-outbound.comIntroductionChinese Outbound Tourism – the first 15 yearsChinese Tourists in Europe:- Market Segments- Seeking Prestige, Demanding Respect- Investment and Return on InvestmentChinese Outbound Tourism – the next 5 yearsConclusion14
  • 14. www.china-outbound.comTravel has been an important part of theeducation process in Imperial China, butoutbound travel has no tradition:Xu Xiake (1587-1641), China’s most famoustraveller, was no Ibn Battuta or Marco Polo,he was interested in China onlyExceptions: Buddhist monks and Zheng He(1371-1433), the “Chinese Columbus”15
  • 15. www.china-outbound.comBefore the start of Reform and Opening policy in 1978, traveland leisure were held in contempt in the P.R. of China 1983 - 1996 VFR and delegations1996: 8 mio. 1997 - 2004 ADS and chaotic growth2004: 29 mio. 2005 - 2010 Gaining experience and scope2010: 57 mio. 2011 - ? The Second Wave of China‘sOutbound Tourism:Sophistication and segmentation2011: 70 mio.2012: 83 mio.2013: 95 mio. e16
  • 16. www.china-outbound.comDemand pushing open the gatesAfter 1989 (Tiananmen movement and Fall of Berlin Wall)preventing outbound tourism (politically dangerous andexpensive) is no longer feasibleADS Approved Destination System installed after 1997 tocontrol and slow down demand for outbound leisure travel –unsuccessfulSince 2004 incremental paradigm change toward “Soft Power”approachSince 2009 government support of outbound tourism – openingto selected foreign tour operators in 2011 unsuccessful2013 new party leadership curbing official travels but first timeofficially “encouraging” outbound tourism17
  • 17. www.china-outbound.comMore border-crossings in first quarter of 2013than in whole year 200318
  • 18. www.china-outbound.comSituation today:Global No. 1, but only the upper class travelling to EuropeIn 2012, 83.2 million border-crossings and 102 billion US$ spending elevateChina to the position as the biggest global outbound tourism source market.30 million Chinese travels in 2012 went beyond Hong Kong and Macau,almost double the number of all Japanese outbound trips.App. 5% of all Mainland Chinese (app. 65 mio.) can afford to travel beyondGreater China (Hong Kong, Macau, Taiwan).Number of Chinese US$ millionaires households: 1.3 million, 3‰ of the 400million households in ChinaDon’t forget: 83 million border crossings are not done by 83 million differentpersons, many frequent travellers (including traders, pilots and prostitutes)20
  • 19. www.china-outbound.comIntroductionChinese Outbound Tourism – the first 15 yearsChinese Tourists in Europe:- Market Segments- Seeking Prestige, Demanding Respect- Investment and Return on InvestmentChinese Outbound Tourism – the next 5 yearsConclusion21
  • 20. www.china-outbound.comIncreasing segmentationChinese tourists are not only growing in numbers, the market is increasinglysegmenting:Second and Third tier citizens first-time travel overseas in package groupsExperienced repeat travellers, the “New Chinese Tourists” and luxurytravellers moving from “8 countries in 10 days” sightseeing to experienceseeking and from package tour to self- or private group travelExample Scandinavia – destination for New Chinese Tourists(turning around Peter’s numbers from previous presentation):55% of visitors to Scandinavia are repeat visitors to EuropeMajority comes from 1st tier cities Beijing, Shanghai, Guangzhou, Shenzhen41% have good English language skills50% of Helsinki visitors are self-organised travellers61% of Stockholm visitors are self-organised travellers22
  • 21. www.china-outbound.com“The” Chinese outbound traveller is not existing (anymore)Segmentation residence international:Mainland Chinese – majority just starting to travel internationally, nouveau richeHong Kong/Macau/Taiwan – longer travel experience, some old money familiesOverseas Chinese – still Chinese but different passportTemporary Chinese residents – expats and students, keen travellers and multiplierSegmentation residence inside China:Sophisticated First tier vs. starry-eyed Second/third tier city inhabitantsSun-seeking North vs. fun-seeking SouthSegmentation lifestyle / travel form:Package tour traveler – hostage of trodden path offers and the tour guideSelf-/privately organised traveller – why visit the Eiffel tower twice? Looking forindividualisation within (!) the peer group, open for suggestionsMainland Chinese living temporarily outside of China – frequent travels, lookingfor regional differences, hosting other Chinese visitors23
  • 22. www.china-outbound.com“The” Chinese traveller is not existing (anymore) - ConsequencesTOP 10 European cities will continue to be visited by busloads ofChinese ticking off sights- and shopping-lists and by MICE visitors,need extra efforts to attract repeat visitors (Paris? That’s so 2010!)For European cities beneath the TOP 10 level Chinese outboundtourism is only just starting. With adapted offers, China-specificmarketing and intra- and interregional cooperation they have thechance to attract high-spending experience-seeking repeat visitors(Did you hear about the city with the free Chinese map App? Cool!)Examples from Chinavia survey:7 European cities with highest growth rates in Chinese bednights 2011:Malmö, Salzburg, Bratislava, Gothenburg, Nürnberg, Zagreb, Ljubljana71% of visitors to Scandinavia visit only Scandinavia during current trip24
  • 23. www.china-outbound.comDifferences in travel expectations and motivation:Package group travellers vs. Self-organised travellersPackage-group travellers travel often for the first time to destinationImportance to document: We have been there (for this snapshot)Strong interest in major sights of major destinations, buying famous brandsExperience during the trip not so importantSelf-organised travellers often have a longer travel career, often MICE- oreducation-related travelImportance to document: Differentiation within the groupLooking for authentic (but matching their expectations) European life,buying lifestyle documentsMore likely to have more time and higher information level about offers ofdifferent destinations from extensive Chinese Social Media “research” (forpreparing a trip to Europe average 100 hours online time)First generation of life-long travelers since childhood starts appearing, a tripto Seoul starts to be no more exiting than a trip to Sanya/Hainan25
  • 24. www.china-outbound.comIntroductionChinese Outbound Tourism – the first 15 yearsChinese Tourists in Europe:- Market Segments- Seeking Prestige, Demanding Respect- Investment and Return on InvestmentChinese Outbound Tourism – the next 5 yearsConclusion26
  • 25. www.china-outbound.comPrestige and Respect27Chinese outbound traveller see themselves as – and are told bytheir government they are – representatives of their country,going to potentially hostile alien surroundings.Showing to the world and to themselves that they havepersonally made it but also that CHINA as a nation has made it(back) to the top is a major part of the fun of traveling andspending overseas.Chinese see themselves as victims of western oppression sincethe Opium Wars and suspect to be treated as second-classcustomers out of racism and envy by the non-Chinese. Theirdemand is not to be treated as well as everybody else, butBETTER than anybody else.
  • 26. www.china-outbound.comPrestige and Respect28Chinese outbound traveller are looking for signs of respect.Even English speaking visitors will be happy to see Chineselanguage information materials, even Muesli-munching Chinesewill be happy to see chuk (Congee) on the breakfast buffet.Emphasising historical and current connections between thedestination and China or recent visits (because of good luck orbecause you paid for it) of Chinese celebrities, a Chinese flag,all helps to show respectVisibly caring for the Chinese visitors, by Quality Labels, byengagement in Chinese Social Media, by teaching staff a fewwords of Chinese and not to annoying sophisticated Chinese bytelling them that they fear the number “4” – helps too.
  • 27. www.china-outbound.comExample MICE29Winner of Chinese Tourists Welcoming Award 2013Regularly hosting Chinese corporate delegations as well as publicexhibitions. Examples:Yoga Lin, Taiwanese music star first ever UK concert 2012Red Bull China, sports competition during 2012 OlympicsJinling Figurative Paintings of China 2012, a public art exhibition,initiated by Chinese Artists Association, JiangsuGuanghua Int. Nursing Conference 2013 (4000 participants)CHW features Europe’s largest domed ceilingBecome part of CHW’s rich history of events & famous speakers:First ever meeting of the United Nations, 1946Churchill, Khrushchev, Blair, HM The Queen, Bruce Willis
  • 28. www.china-outbound.comExample COTRI Chinese Tourists Welcoming City Label30Visibility of engagement forthe Chinese market in offlineand online trade publicationsand Social MediaPhysical and electronic labelMemberships in CTW City LabelNetworkFree represenation in threeChinese tourism fairsGiving prestige, showingRespect to Chinese visitors
  • 29. www.china-outbound.comExample TripShow.com31CTW City LabelNetwork membersmarked withspecific badge onTripShow.com
  • 30. www.china-outbound.comIntroductionChinese Outbound Tourism – the first 15 yearsChinese Tourists in Europe:- Market Segments- Seeking Prestige, Demanding Respect- Investment and Return on InvestmentChinese Outbound Tourism – the next 5 yearsConclusion32
  • 31. www.china-outbound.com33Travelling to Europe means for Chineseoutbound travellers first of all:Investmentin- Personal prestige withinthe group- Self-esteem- Social capital- LearningBut also:- Business opportunities- Investment in real estateand companies
  • 32. www.china-outbound.comReturn on Investment34If inter-continental travel is investment, the services and productsoffered should be organised in a way to guarantee the Chinesevisitor a good Return on Investment (ROI):Value for money and for timeGuaranteed quality as seen from a Chinese point of viewNo more time spent on an activity as needed for prestige gainSupporting the bragging value of a place/an activity/a product:famous, typical, oldest/highest/awarded, celebrities choice,unusual (but not unknown), authentic (but not againstexpectation) hard to get, VIP only, as seen in TV and moviesConnecting fun und investmentGiving face to China and all ChineseSafe and without risk
  • 33. www.china-outbound.comIntroductionChinese Outbound Tourism – the first 15 yearsChinese Tourists in Europe:- Market Segments- Seeking Prestige, Demanding Respect- Investment and Return on InvestmentChinese Outbound Tourism – the next 5 yearsConclusion35
  • 34. www.china-outbound.comChinese Outbound Travel 2017 (barring Wild Card events)1. Chinese transcontinental travellers are not travelling for fun, but forconfirmation of their abilities. Therefore even with a slowing Chineseeconomy, in 2017 we will witness 170 million outbound travels, double thenumber of 2012.Half of the 170 million travels will go beyond Greater China2. Package group travel will be seen even more as less prestigeous travel formmainly for less sophisticated newcomers. Half of the travels will be eitherself-organised or customised flexible offers for small groups of friends,family or colleaguesTour operators and tour guides will stop dominating the high-end of themarket3. European cities of different sizes will be more successful in attractingChinese visitors and MICE events in very varying degreesAdaptation and commitment will decide who is hot and who is not36
  • 35. www.china-outbound.comIntroductionChinese Outbound Tourism – the first 15 yearsChinese Tourists in Europe:- Market Segments- Seeking Prestige, Demanding Respect- Investment and Return on InvestmentChinese Outbound Tourism – the next 5 yearsConclusion37
  • 36. www.china-outbound.com5 insights about the Second Wave of Chinese Outbound Travel1. Chinese outbound travellers will continue to gain importance in terms ofnumber of visitors, bednights and amount spent per person per trip alsofor non-Asian destinations  ignoring or dismissing them is not an option2. Distinguishing between the segments of the Chinese market is essential averages won’t help you to understand the different customer groups3. Chinese are not coming to Europe for holidays. In different forms, gainingprestige, self-esteem and knowledge are main motivators for packagegroup members, self-organised travellers and MICE customers alike learning to adapt your offers and stories to cater to the fulfillment ofthese motivations will attract Chinese tourists also to “smaller” cities4. Chinese are first-generation affluent, “money-rich” but “time-poor” help them choosing, offer them more value for money, not discounts5. Chinese will be Chinese, with growing experience and language skills theyinsist more, not less, to see signs of appreciation of the Chinese culture signalise your extra attunement and commitment to Chinese visitors38
  • 37. www.china-outbound.com39Thank you for your attention!Looking forward to your questions and comments.ContactCOTRI China Outbound Tourism Research InstituteProf. Dr. Wolfgang Georg ArltTel. +49 481 8555 523Mail arlt@china-outbound.com

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