1. Introductory Workshop for
Exhibitors
COTTM 2013
Organiser: COTRI China Outbound Tourism Research Institute
Presenter: Prof. Dr. Wolfgang Georg Arlt, COTRI
Anders Ellemann Kristensen, CEO Albatros Travel
www.china-outbound.com
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2. Introductory Workshop for Exhibitors
10.00-10.10 h Introduction
10.10-10.30 h Prof. Dr. Arlt: China’s Outbound Tourism 2013
10.30-10.45 h Anders E. Kristensen: How to do successful
business with Chinese tourism companies
10.45-11.45 h Q&A from the audience
11.45-12.00 h Summing up
www.china-outbound.com
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3. China’s Outbound Tourism 2013
New Chinese Tourists looking for
niche products, new destinations
and investment opportunities
Prof. Dr. Wolfgang Georg Arlt
Director COTRI
arlt@china-outbound.com
www.china-outbound.com
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4. COTRI China Outbound Tourism Research Institute
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 Bosnia-Hercegovina, Croatia, Estonia,
Finland, France, Ireland, Italy, Kosovo, Latvia, Lithuania, Macedonia,
Mexico, Morocco, New Zealand, Serbia, Slovenia, Tunisia, UK
Germany: China:
Fritz-Thiedemann-Ring 20 101/2B Gui Gu Liang Cheng
25746 Heide / Germany 1 Nong Da Nan Rd., Haidian District
Phone +49 481 85 55 523 Beijing 100084 / P.R. of China
Fax +49 481 85 55 121 Phone +86 134 2603 6722
E mail info@china-outbound.com E mail china@china-outbound.com
www.china-outbound.com
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5. 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: China:
Fritz-Thiedemann-Ring 20 101/2B Gui Gu Liang Cheng
25746 Heide / Germany 1 Nong Da Nan Rd., Haidian District
Phone +49 481 85 55 523 Beijing 100084 / P.R. of China
Fax +49 481 85 55 121 Phone +86 134 2603 6722
E mail info@china-outbound.com E mail china@china-outbound.com
www.china-outbound.com
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6. GOOD NEWS:
22.01.2013
China to continue pushing outbound tourism
China will continue encouraging its citizens to travel overseas,
despite the economic slowdown at home.
During a meeting with UNWTO Secretary-General, Taleb Rifai, the
Chairman of the China National Tourism Administration (CNTA), Shao
Qiwei said that tourism remained one of the Chinese government’s ‘key
strategic pillars’ for economic growth, and that outbound tourism will
also boost China’s development in the long-term.
“With 148 countries now included in the list of ‘Approved Destination
Status’ (ADS), the government, and particularly CNTA, will continue
to promote the travelling of Chinese people abroad as we believe
in the mutual benefits of collaboration. By continuing to send Chinese
travellers to Europe, the benefits will eventually flow back to China,”
Shao said in Madrid.
In 2012, 80 million Chinese travelled abroad.
www.china-outbound.com
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7. But a word of caution:
“The government, and particularly CNTA, will continue to promote the
travelling of Chinese people abroad.”
Good news: Support, but „continue“? This is the first time ever
CNTA China National Tourism Administration is saying it is
„promoting“ outbound tourism.
“In 2012, 80 million Chinese travelled abroad.”
Delightful number mentioned by the Chairman, but his own
research institute CTA gives 83.2 million border crossings (not
different persons!) for Chinese outbound in 2012.
Chinese sources are important but official information
and oversimplifying media reports should be taken
with a pinch of salt.
www.china-outbound.com
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8. Chinese Outbound travel – approaching
the 100 million border-crossings mark
www.china-outbound.com
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9. Travel has been an important part of the
education process in Imperial China, but
outbound travel has no tradition:
Xu Xiake (1587-1641), China’s most famous
traveller, was no Ibn Battuta or Marco Polo,
he was interested in China only
Exceptions: Buddhist monks and Zheng He
(1371-1433), the “Chinese Columbus”
www.china-outbound.com
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10. Before the start of Reform and Opening policy in 1978, travel
and leisure were held in contempt in the P.R. of China
 1983 - 1996 VFR and delegations
1996: 8 mio.
 1997 - 2004 ADS and chaotic growth
2004: 29 mio.
 2005 - 2010 Gaining experience and scope
2010: 57 mio.
 2011 - ? The Second Wave of China‘s Outbound Tourism:
Sophistication and segmentation
2011: 70 mio.
2012: 83 mio.
www.china-outbound.com
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11. Demand pushing open the gates
After 1989 (Tiananmen movement and Fall of Berlin Wall)
preventing outbound tourism (politically dangerous and
expensive) is no longer feasible
ADS Approved Destination System installed after 1995 to
control and slow down demand for outbound leisure travel –
unsuccessful
Since 2004 incremental paradigm change toward “Soft Power”
approach
Since 2009 government support of outbound tourism – opening
to selected foreign tour operators in 2011 unsuccessful
2013 new party leadership curbing official travels but first time
officially “encouraging” outbound tourism
www.china-outbound.com
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12. Becoming Global No. 1
China has developed into the number one producer of many
things - Gold, TV sets, Cell Phones, Solar Panels, Beer, Apples,
Cars, Carbon Dioxide and much more.
In cases where the country is still
only number two, like tomatoes
and space stations, this is going
to change soon.
In tourism, China is just arriving
at the top position.
www.china-outbound.com
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13. Global No. 1, increasing segmentation
In 2012, 83.2 million border-crossings and 102 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
www.china-outbound.com
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14. Growth slowing down…
www.china-outbound.com
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15. … and China’s HNWI getting nervous…
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
www.china-outbound.com
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16. … but outbound travel continuing to expand
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% www.china-outbound.com
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17. The “New Chinese Tourists” –
Opportunities and challenges
www.china-outbound.com
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18. 2012: Diversification of destinations
Hong Kong and Macau loosing market share
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%
www.china-outbound.com
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19. Niche products and destinations gaining ground
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
www.china-outbound.com
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20. New Chinese Tourists – why do they exist?
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
www.china-outbound.com
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21. New Chinese Tourists – becoming “normal” (a.k.a. like us)?
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”
www.china-outbound.com
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22. Travel motivation
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
www.china-outbound.com
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23. Travel goals
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
www.china-outbound.com
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24. How to learn to provide service quality the way the New Chinese
Tourists want it and how to communicate it to the market?
www.china-outbound.com
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25. CHINA OUTBOUND TOURISM RESEARCH INSTITUTE
Training and
Quality Assurance
by CTW Chinese
Tourists Welcoming
Programme
Visibility in China on
www.welcoming
Chinesetourists.cn
www.china-outbound.com

26. Developing successful niche products
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
www.china-outbound.com
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27. Travel future
The low price, low quality Chinese package outbound tourism
will suffer from the pending economic crash in China, annual
growth rates in terms of number of persons travelling may fall
below the 20% mark.
But the New Chinese Tourists will continue to go abroad, as
the motives for international travel – prestige, networking,
distinction, experience – will not change.
The annual growth rates in spending on international travel
will probably stay above the 20% mark.
www.china-outbound.com
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28. TOP 5 things to understand about the New Chinese Tourists
1. “New Chinese Tourists” (NCTs) are different from the first-time package-
tour visitors: arriving in smaller, often self-organised groups, visiting less
countries but more destinations in one country during one trip
2. NCTs are middle-aged (25-40), Social media driven, often speak English,
often studied abroad, are first-generation affluent, mostly work hard for
their money, are therefore “money-rich” but “time-poor”
3. NCTs are not coming to Europe for holidays and relaxation, but for seeking
prestige, self-esteem and individual distinction within the group
4. NCTs are less interested in sightseeing and more interested in experiences,
which have to be intensive, short and carrying bragging potential
5. NCTs are still Chinese, looking for signs of appreciation of China and the
Chinese culture, seeing themselves as representing China and as part of
the Chinese travel community
www.china-outbound.com
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29. Thank you for you attention – looking forward
to your questions and comments during the Q&A
discussion!
Contact: arlt@china-outbound.com
Have a successful COTTM
2013 in the Year of the
Water Snake!
www.china-outbound.com
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