The China Outbound
Travel Handbook 2008
2008
written by:
Roy Graff Hu Huaming
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About the authors:
This handbook was written from two distinct business views - Chinese local
expertise and Western experience of doing business in China. As such, it provides
practical information you can use as well as insight into the challenges of dealing
with China’s tourism industry and how to prepare for them.
Mr. Hu Huaming
DPS China (Destination Promotion System)
Hu Huaming began his outbound travel career in 1991 when China first opened the
outbound travel market. He has been the general manager of the outbound
department of CYTS. DPS specialises in destination promotion, dedicated to
servicing international partners for the marketing and representation of their tourism
products and services to China's booming market.
Mr. Roy Graff
ChinaContact www.chinacontact.org
Roy Graff has served as E-commerce director for Gullivers Travel Associates and
Chief Representative of Octopusavel.com in China from 2002 to 2005. He runs
ChinaContact based in London and Beijing. The company provides full service
representation to tourism destinations, hospitality and travel companies as well as
bespoke service covering consulting, strategy, business development, training and
product localization. Roy also maintains the ChinaContact Tourism Network which
allows travel professionals worldwide to network and interact online.
Roy administers the most comprehensive source of China travel sector news in
English through his blog news.future-of-travel.org and directs the annual forum on
China’s tourism industry in London – China, the Future of Travel.
The China Outbound Travel Handbook will give you the basic understanding and
insight to begin operating in this challenging, complicated but potentially hugely
profitable market place. You will learn who is travelling abroad, what are the best
ways of reaching them, how the travel industry is organised in China and how to
show your hospitality to Chinese visitors abroad.
This handbook is 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.
We wish you a pleasant and informative read.
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Table of Contents
Forew ord ................................................................................................................4
o rd
The C hines e Tr av el I n dust ry ...........................................................................6
hi nes Trav
Government tourism bodies ___________________________________________________7
Approved Destination Status (ADS) policy ________________________________________8
Wholesale and retail travel agencies____________________________________________10
WTO and China____________________________________________________________12
The Chinese currency _______________________________________________________13
Passports and visas ________________________________________________________14
The C hines e Me dia ...........................................................................................15
hi nes
Media characteristics________________________________________________________15
Television ________________________________________________________________15
Radio ____________________________________________________________________16
Newspapers_______________________________________________________________17
Magazines ________________________________________________________________17
Trade Magazines___________________________________________________________17
Internet __________________________________________________________________17
Advertising & public relations _________________________________________________19
The C hines e Tr av el le r......................................................................................20
hi nes Trav elle r
Who? ____________________________________________________________________20
Where? __________________________________________________________________23
How many? _______________________________________________________________27
When? ___________________________________________________________________28
How much? _______________________________________________________________30
What are their expectations?__________________________________________________31
Cultural differences _________________________________________________________33
Consumer behaviour ________________________________________________________34
Hos pi tality ...........................................................................................................39
tal ity
Service and etiquette________________________________________________________39
Language_________________________________________________________________40
Illegal immigration __________________________________________________________41
Sal es & Ma rk eti ng i n C hina ...........................................................................42
Sales eting hin a
Governmental organisations __________________________________________________42
Travel trade _______________________________________________________________42
Direct consumers___________________________________________________________43
Suggested marketing methods ________________________________________________43
Competition from other destinations ____________________________________________44
COTRI , CTW awards and Quality Label ________________________________________45
Exhibitions in China _________________________________________________________45
Challenges and recommendations _____________________________________________50
Forums and Conferences in China _____________________________________________52
Forums about China in the West_______________________________________________53
Lookin g to t he f ut ur e .......................................................................................54
Looki ng
Furt her Inf orm ati on onli ne .............................................................................55
I nf ation on li
Co nta ct det ail s .....................................................................................................55
3

Foreword
As China is about to show the world all that it has learned and accomplished since the
open door policy begun with the staging of the summer Olympics, the world’s business
community is eagerly awaiting to see greater opening up and to seize opportunities to
sell more to China’s growing middle and wealthy classes.
This is also the day, considered auspicious in Chinese custom (the number eight is
pronounced ‘ba’ which sounds like ‘fa’ for wealth), that the 2008 updated edition of
China Outbound Travel Handbook is published electronically as a free resource for
practitioners and academics in tourism. The book is available without cost or
subscription fee through the ChinaContact Tourism Advice Network to anyone interested
in China’s outbound tourism market. As I write this forward in Beijing before the
Olympic Games Opening Ceremony, I feel that this day marks the true beginning of what
my friend and colleague Professor Wolfgang Arlt of COTRI called ‘the third phase’ of
China’s tourism sector development. China’s travelers are now as discerning and
sophisticated as their counterparts in other countries and demand more choice, better
quality and more control over their travel. This Handbook will be the first step to reach
these customers.
Roy Graff, Beijing 8-8-2008
The Dragon awakes! After twenty years of successful reforms, China has become an active
player in the international tourism industry. Travelling abroad is now a regular part of the
lives of many people in China, for both business and leisure.
Doing business in China and with China, has been the subject of countless books and
training courses for more than a decade. These books and manuals have dealt with general
business practices that can be applied to as many industries and sectors as possible. While
they are useful for background knowledge and some insight into China’s business culture,
ultimately they cannot answer specific questions about China’s tourism industry. Tourism is
one of the youngest industries in China, with outbound tourism literally the ‘baby’, still
learning to define itself and realise its potential. The industry suffers from lack of regulatory
enforcement and a ruling body several steps behind the private sector.
There are between 200 and 250 million Chinese today that are financially able to travel
overseas i. 2007 outbound numbers reached nearly 41 million, an increase of 18.6% over
2006. WTO estimates a minimum annual growth of 12.8%, reaching 100 million by 2020.
There are over 700 licensed outbound travel agencies in China. The number of countries
given ADS (Approved Destination Status) is more than 135 and still increases. It is an
exciting time to be working in tourism, with China representing the single greatest growth
opportunity in the world to western travel destinations and tourism companies.

Disclaimer:
Every effort has been made to check the reliability of the information given in this book. All figures,
statistics and numerical representations are updated at time of publication. The author accepts no
responsibility for differences between stated figures and those published elsewhere. Due to the
dynamic changes in China and the lack of reliably accurate statistical data, we recommend that you
check for updates on the market regularly and not rely on statistical data alone.
Rights to this publication belong to ChinaContact (CContact Limited). Unauthorised printing, copying
and sharing of content included in this document for purpose other than personal use is not allowed.
Please contact the publisher ChinaContact if you wish to quote, re-publish or reprint content under a
commercial agreement at info@ccontact.com or +44 20 3239 9688.
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The Chinese Travel Industry
Introduction
The travel industry in China is complex and vague for two main reasons. First, the
industry has only recently been confronted with new free market mechanism where
consumers are free to choose their travel destinations. Second, despite this, the
industry is still largely controlled and directed by the government. So what effect
these two seemingly conflicting factors have?
This situation is comparable to other sectors in the Chinese economy which are in a
transitionary phase from centrally controlled policies to free market mechanisms.
The market mechanism is clear to Western players in travel and tourism: the
consumers’ demands must be met by suppliers with a premium on value added. But
the overwhelming role of Chinese governmental institutions is often misunderstood
by Western businesses.
In the Chinese travel industry, the national, provincial and city governments
influence greatly the development of the market. We expect this influence to
gradually decrease over the coming years, in light of WTO regulations and
increased openness to the west. As it stands, only a limited number of licenses are
issued to Chinese travel agents allowed to operate international travel. There is no
distinction between retail and wholesale business. Foreign tour operators are not
allowed to conduct outbound travel in China in any legal form though there are signs
that this situation may change in the future.
The limited number of Chinese travel agents engaged in outbound travel clearly
cannot meet the growing demand for travel abroad. This has resulted in an
extensive grey network of travel agents operating without a license. The big
disadvantage of this grey network is that they are not legally liable, are not allowed
to deal with foreign exchange or handle visa applications. But this unofficial
sub-sector has been the most active, succeeding in gaining a sizeable market share
by focusing on business travel or using ‘franchised’ licenses.
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Only one third of the travel business is actually operated by official travel
•
agencies, the rest passes through other organisations such as government
bureaus, trade promotion bodies, consultants, private networks and contacts
abroad.
Gaining access to the Chinese market and developing a successful strategy
•
requires first a good understanding of the complicated situation.
Freelance agents often ‘rent’ or ‘franchise’ an outbound travel license number
•
from an established agency to sell and operate their own independent groups
and individual travel business.
Government tourism bodies
China National Tourism Administration (CNTA)
•
CNTA is comparable to a Ministry of Tourism and financed by the government. It
does not, however, have the full status of a ministry and lacks enforcement power.
Its main functions are:
• Defining the legal framework within which the travel industry operates.
• Defining and implementing the strategy for the development of the travel industry
overall.
• Promoting inbound and domestic travel.
• Decision-making on the (legal) establishment of foreign travel organisations within
China.
• Overseeing events concerning the foreign travel industry (e.g. CITM).
• Signing tourism agreements with foreign governments on behalf of the Chinese
government.
Local government tourism bureaus
•
Each province and city has a tourism bureau which is a branch of CNTA; they are
responsible for implementing the policies on tourism as defined by the CNTA. Their
budget however comes from the local government and this often creates conflict
when it comes to implement policies. When operating in China, it is as important to
cultivate good relations with the local level tourism bureau, as it is to maintain good
relations with CNTA head office.
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CNTO
•
China National Tourism Office is the international representation of CNTA and has
offices in some of countries that maintain diplomatic relations with China. CNTO
operate independent offices in the Los Angeles, New York, Toronto, Sydney, Seoul,
Tokyo, Osaka, London, Paris, Madrid, Zurich, Frankfurt, Kathmandu and Singapore.
They primarily deal with promoting China as a destination but have the additional role
of promoting bi-directional tourism links.
Governmental institutions like CNTA are non-commercial and not allowed to
•
directly cooperate with private companies.
CNTA and the local tourism bureaus are partners of many European national
•
tourist offices for marketing and promotions in China.
CNTA is usually the official partner for organising travel of Chinese citizens to
•
major cultural or sports events abroad.
Business and official travel arrangements are not under the jurisdiction of CNTA.
•
The Ministry of Commerce and other ministries are in charge of these
arrangements, often in cooperation with trade (promotion) consultants or similar
organisations.
Approved Destination Status (ADS) policy
The emphasis of the Chinese government is clearly on developing inbound and
domestic travel. The holiday economy is focused on promoting consumer spending
within the country. Inbound tourism has priority as it brings in foreign currency.
As for outbound private travel (tourism), the policy is chiefly concerned with
controlling and regulating the travel trade and maintaining a sustainable gradual
development of this sector
ADS was first introduced in the early nineties for destinations in Southeast Asia
such as Singapore, Thailand and Malaysia. Prior to ADS, travelling abroad was only
allowed for business purpose and official visits with government approval needed
for every single visit. ADS policy was created to account for the growing interest of
Chinese citizens in foreign travel and the fast increase in disposable income.
ADS is granted to overseas destinations through a bilateral government agreement.
The ADS only concerns tourism groups handled by assigned Chinese local travel
agencies. Business and official travel to overseas destinations are not included in
ADS agreements.
The purpose of ADS is to have a control mechanism on the organising parties on
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both sides (local travel agencies and international tour operators) in order to
guarantee safe and reliable tourism services for the Chinese customers.
An important issue within ADS is to avoid possible illegal immigration through tourism
channels. All tourism groups travelling within the ADS framework are supposed to be
monitored by both Chinese and foreign authorities to ensure they return to China.
Embassies and consulates apply different methods to monitor the return of the
Chinese tourists. Whenever a tourism group member does not return to China, the
local travel agency is held responsible and sanctions are applied.
Only certified ADS travel agencies are allowed to promote and organise tourist
groups including visa application and payment of foreign currency to foreign parties.
Each of the certified travel agencies must assign special couriers to handle the visa
application procedure.
Countries without an ADS agreement are not allowed to receive tourism groups from
China or to promote their destination in China for tourism and are restricted to
business and official travel groups only.
CNTA keep a list of approved tour operators for outbound travel and publish it on
their website in Chinese for every destination country (www.cnta.gov.cn). When
listed with CNTA it might simplify the procedure regarding guarantees, payments
and visa application. Each country in Europe has differing methods of selecting
approved inbound operators to submit to CNTA. The online directory is not updated
regularly and is normally several months behind.
135 different countries and territories have signed an ADS tourism agreement with
the Chinese government and 100 countries were actively engaged in tourism
promotion as of December 2008ii. The reason for this discrepancy is that after
signing the agreement, the two countries then negotiate the fine details of operating
and monitoring the tourist groups and agree on an implementation date.
All the EU member states are included in the ADS agreement as concluded in
•
2004. The United Kingdom was the last EU member state to sign an ADS
agreement with China in January 2004 and began operation from end of July
2005.
Switzerland, Norway and Iceland have separate bilateral ADS agreements with
•
China as non-EU members.
The USA finally signed a bi-lateral tourism agreement (akin to ADS) in
•
December 2007 which took effect in July 2008.
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Requirements for local travel agencies to handle ADS groups
Certified travel agencies for international travel with at least a one-year track
•
record of incoming tourism.
No previous violations of travel related laws and regulations.
•
International and national travel agencies have differing insurance obligations to
•
resolve disputes (such as compensations or fines), 600,000 RMB and 300,000
RMB respectively.
Licensed outbound travel agencies must have an additional insurance fund of
•
one million RMB, or 1.6 million RMB in total.
Tour leaders and group size
Contained in the ADS agreement is a stipulation that a Chinese certified tour
•
leader must accompany the tourism group. The certificate of a tour leader is
reassessed on a yearly basis by CNTA.
The minimum size of a group is five people including a tour leader.
•
China has 17,400 certified tour leaders.
•
Travel groups with less than five people do not fit into the ADS agreement and
•
therefore need to apply for business or official visa and justify their travel using
invitation letters of receiving parties. They can also apply for a normal visa on an
individual basis directly with the consulate without the intermediary services of
the travel agent.
The FIT market is not regulated through any tourism agreement. It is up to each
•
consulate to issue visa for individual tourists.
The German embassy has been the most accessible for FIT visa applications.
•
They have issued over 20,000 individual visas for tourism.
Most other EU embassies shun individual applications fearing possible illegal
•
immigration.
Wholesale and retail travel agencies
There are 1,472 international (inbound) travel agencies in China, out of a total of
more than 15,339 travel agents. Only 700+ agencies are licensed to operate
outbound travel. These travel agencies vary greatly in size. Some of them have
branches nationwide while others operate in certain regions only. There is no clear
distinction between wholesale and retail travel agencies yet. As tourism has only
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been developed recently, the services provided to the customer are still rather
limited.
Traditional transactions are concluded by sales people visiting the clients, based on
their personal networks. This way of operating is not transparent and highly
dependant on the sales person. These networks are the so-called grey areas.
Although their name card may show the name of a certified travel agent, they
operate independently and often switch from one agency to another (and so does
their name card). The flow of staff between travel agencies is very common and staff
retention is a major challenge. Any database of travel agencies in China must take
this into account.
These days, more travel agencies sell their services and products at the counter to
meet the demand of the growing number of customers. Customers are becoming
more sophisticated and therefore demanding more quality and transparency.
Branding of high-street travel shops is not developed, with travel products mostly
looking the same regardless of where they are purchased.
When wholesalers exist, they are mostly based in Beijing, Shanghai and
Guangzhou. They normally sell both to trade and direct consumers and operate
multiple brands. The wholesalers collect their clients from all over China, through a
personal network of relations.
Pressure from below (the consumers), from above (government regulations) and
from the outside (foreign competition) is expected to increase in the near future.
This will lead to local companies developing clear brands and diversifying their
products.
There are several well known names within the travel industry. These are the travel
agencies set up by different departments of the government in the days that all
travel was controlled by the government. CTS, CITS, CYTS have offices all over
China, but should not be considered as either a wholesaler or a national brand.
Each of their offices is managed separately and must build its own reputation in the
region in which it operates. Other nationally known brands include: China Comfort,
CITIC, China Merchants among others. CTI, which is owned by Hong Kong CTS, is
the only ‘foreign’ company that can legally operate outbound travel.
Recently, CITS and CTS began buying back a controlling part in many of their
own-brand offices across China. However there is no automatic distribution of
products through the chain of offices and each can choose their own suppliers.
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Many sales and marketing staff or departments operate independently within a
•
travel agency. When disputes arise the travel agency might not be held
responsible for the services of their staff or departments. When cooperating with
such people it is important to double-check their actual contract with the travel
agency.
Franchising is a common way to operate as a certified outbound travel agency.
•
Unfortunately the franchising contracts are often not legally binding.
Franchising or using another company’s license does not automatically imply
•
that the travel agent is unreliable. One needs to assess the actual quality of the
total product and judge the potential for cooperation on a case by case basis.
The logo or agency name on the name card is not an indication of who owns the
•
agency or how reputable it is. Always check for their license number, which
company it was issued to and what is the relationship to the agent you are
dealing with.
WTO and China
Until recently the scope for foreign tour operators was very restricted. Only
representative offices were allowed to function as liaison offices engaged in
collecting information on inbound travel to China. Subsequent to the World Trade
Organisation (WTO) agreement on the Services sector, China has gradually (some
would say reluctantly) opened its travel market to foreign investors from 2004.
The establishment of both joint ventures and wholly foreign owned travel agencies
in China was allowed in 2004, but the requirements are set very high. An annual
business turnover of at least US$40 million is required for a joint venture and an
annual business turnover of at least US$500 million for a wholly foreign owned
enterprise with a registered capital of at least 4 million Yuan (US$483,000).
Gulliver’s Travel Associates (GTA), a wholesale supplier of global travel products,
now part of Travelport, launched its China subsidiary in Beijing in August 2004,
becoming the first European travel agency licensed to operate in the country.
Another two Japanese companies, Jalpak International (China) Co. Ltd. and All
Nippon have been granted licenses to provide inbound and domestic travel services
in China. Under the regulation announced by CNTA in June 2003, foreign-controlled
or funded travel agencies are not permitted to arrange tours for Chinese mainland
citizens to foreign countries (Including Hong Kong, Macao and Taiwan that are
officially Chinese regions).
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China revised its regulations on foreign investments in wholly or majority owned
travel agencies in China effective from 17 February 2005. The changes include the
lowering of registered capital to RMB2.5 million and removal of restrictions on
locations. However foreign funded travel agents still cannot engage in China’s
outbound business. From the 1st of Jan. 2006, the requirement of annul turnover is
above 25 million USD for Hong Kong and Macao tour operators to set up wholly
owned tour operator in mainland China while it is 12 million USD for just joint
venture tour operator.
Facing increasing competition, domestic tourism companies have also begun to
form partnerships. In April 2004 China Beijing Quanjude Group and Beijing New
Yansha Group, two major tourism companies in the Chinese capital, merged to form
the Beijing Tourism Group (BTG). The merger resulted in a new company with
assets exceeding 15 billion Yuan (US$1.8 billion). China International Travel
Service officially acquired the China Duty Free Group to form the CITS (Group)
Corp. in November 2004.
Most foreign tour operators of small and medium size in Europe are not able to
•
meet such high requirements regarding turnover and registered capital and
therefore have restricted access to the Chinese market.
In light of the above regulations, the local tour operators enjoy protection that
•
gives them an unfair advantage over foreign operators.
Within the framework of the WTO negotiations, the EU will demand the principle
•
of equal treatment to be applied to the travel industry, removing all requirements
or limitations to foreign enterprises in China’s travel industry.
The Chinese currency
The Chinese currency is called ‘Renminbi’ (RMB), literally ‘people’s money’. One
unit is called ‘Yuan’ or ‘Kuai’. RMB is not convertible and banks outside China do not
accept it. Foreign exchange bureaus now accept limited amount of RMB for
purchase or sale. One needs special approval to purchase foreign currency within
China whenever travelling abroad or paying in foreign currency for certain products.
The State Administration of Foreign Exchange (SAFE) is responsible for all foreign
currency exchanges in China. Only certified international travel agencies are
allowed to make payments in foreign currency through the bank with approval of
SAFE. Other travel agencies or organisations do not have access to foreign
currency and can only make payments in RMB.
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Chinese citizens are allowed to take a maximum of 5,000 USD and 20,000 RMB in
cash when travelling overseas for their expenses abroad. They can use RMB credit
card in of the foreign countries.
The Chinese government has revalued the RMB against the USD which means
Chinese’ overseas purchasing power has increased.
When dealing with a local travel agent or organisation one has to clarify in
•
advance in what currency and through what channel payments are to be
fulfilled.
Passports and visas
China has several types of passports: diplomatic, public affairs and private
passports. When travelling to Macau, Hong Kong or Taiwan special travel permits
are issued for Chinese mainland citizens. Depending on the purpose of travel the
Chinese citizen holds different passports. Only private passports are used for
tourism and ADS visa is issued to private passport holders. Only certified
international travel agencies listed on the ADS list are allowed to handle visa
applications on behalf of their clients. The ADS licensed travel agent will submit the
application to the embassies or consulates involved, including documents on the
social, economic and financial background of the applicants.
The ADS procedure for the Schengen member states is the same for every member
country. Visa application procedures for individual, business or official travel are
different with each consulate.
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The Chinese Media
Media characteristics
The media in China is not fully privatised and is controlled and/or monopolised by
the government. Reporters and journalists can choose to write whatever they think
is interesting as long as it is in line with government policies. There is no need to
strive for excellence in the sense of ‘scoops’ or ‘breaking news’. Reporters and
journalists often work on the basis of their own network, not necessarily based on
market mechanisms as in the West.
The tasks and responsibilities of reporters and editors are often not clearly divided.
It is often confusing who the decision-makers are. Editors do not have as much
freedom as those in the west and normally need to obtain approval from
propaganda or censor bureaus of the government.
Competition is nevertheless increasing, forcing the media to optimise their economic
performance. Given the rapid developments in media, it is useful to seek advice
from specialised consultants. These consultants can provide a good network of
relations within the media circles. They can exercise influence on the editorials or
advertorials size, content, lay out and depth. Most of the magazines regarding
economics and finances are focusing on the white-collar class. Automobile and IT
magazines are suitable for tourism promotion since their readers have a relatively
high income. Fashion magazines target the white-collar female readers.
Television
All television stations are state owned and controlled. China Central Television
(CCTV) has 12 channels broadcasting nationally and internationally. Every province
has at least one other local channel. Most households receive about 50 different
Chinese channels. Many requests for cooperation in promotion of foreign
destinations come from TV stations and this demands careful study of the potential
exposure. Foreign channels are not broadcast in China by terrestrial means but
satellite dishes are the norm in international chain hotels and expatriate compounds.
Fees for television advertising are high. So far only Australia, Hong Kong and
Singapore have used this medium.
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Travel programs on television include:
“Travel Compass”
CCTV
National “Travelling the Four Seas”
Travel Satellite TV “Travel Column”
“Beautiful Mountains, Beautiful
Beijing Beijing Television
Rivers, Beautiful Feelings”
Shanghai Shanghai Television “Life On-Line: Fun”
Shanghai Eastern Satellite “China is More and More Fun”
Guangdong Guangdong Television “Wandering”
Hong Kong Phoenix Satellite “Across China”
Europe Phoenix CNE Satellite
Radio
All radio stations are state owned and controlled. Radio listeners are usually older
people, students and (taxi) drivers. As many people of the middle class take taxis or
drive their own car, radio stations can be good partners in advertising. Traffic
Radio in each cities has very big influence on the market. Like in Beijng, 103.9 is a
famous radio channel and the tour operators are willing to co-operate with it. Most
large travel agencies have contracts with stations for tourism advertising and
features.
Main travel programs on the radio:
National Central People’s “Morning News”
Broadcasting Station
Beijing Beijing People’s “Traffic Station – Relaxed Travel”
Broadcasting Station and “Music Station”
Shanghai Shanghai People’s “Travel Bus”
Broadcasting Station
Guangdong Guangdong Radio “Travel Macau and Hong Kong”
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Newspapers
There are only two news agencies in China, Xinhua News Agency and China News
Agency. There are thousands of different newspapers in China. The main two
national newspapers are the “People’s Daily” and the “Economic Daily”. The only
newspaper specialising in tourism is the “China Tourism Report” of the CNTA.
Evening Newspapers in each city are widely read by the locals and considered most
valued by advertisers. The segmentation of readers based on economic class or
background is prevalent in China. Examples include “Beijing Youth” for white collar
workers, “Shopping Guide” for the fashionable young, papers with a focus on
specific provinces and those intended for expatriates from Taiwan, Japan or Korea.
Magazines
Glossy travel magazines are gaining popularity among the many lifestyle magazines
selling well in China. “Trend Travel”, “Traveller”, “Travelling”, “Deep”, “City Travel”,
“Travel” and “China National Geographic” are distributed nationally. Other Beijing
magazines that publish travel features are “Sanlian Life”, “Fortune”, “Global
Entrepreneur”, “New Economy” and “Beijing Youth”. “Huaxia Travel Geographic”
and “Travel Agent” are published in Shanghai. Other Shanghai magazines that
publish travel features are “Shanghai Week”, “Rainbow” and “Shanghai Top”.
Trade Magazines
TTG China, Travel Weekly, TTN and Travel Agent Magazine are distributed to the
travel industry in Chinese free of charge.
Airline magazines include “China Civil Aviation”, “International Aviation”,
“International Aviation News”, “Eastern Aviation”, “Western Aviation” and “Southern
Aviation” and “Global Travel”.
Internet
Due to the fast economic growth and high education levels in China, internet usage
has been booming in the past decade. Young urban professionals are morel likely to
obtain their travel information online than through any other source. All major cities
have reliable and affordable broad band internet access. Most Internet providers are
based in Beijing. The internet is also often used for on-line reservations for hotels
(FIT travellers). Fees for Internet media advertising are relatively low and enjoy a
large, professional and young audience. Payment is normally in the form of space
rental rather than pay-per-click as in the West.
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The main internet portals are: sina.com, sohu.com, 163.com, online.sh.cn,
tom.com,.21cn.com.
At the same time as the World Wide Web is becoming increasingly popular among
Chinese, the Chinese central government is getting worried about the negative
effects of this new media. While some worries are justified (addiction to online
games, internet gambling, pornography and credit card fraud), others stem from the
tight control China exercises on all other forms of media.
The result of this concern is a high degree of censorship and restriction of internet
content. As China cannot control sites that are hosted outside its borders, it resorts
to monitoring and censoring what Chinese can view from external sites. This can
lead to certain servers at certain times being blocked. With most websites held on
shared servers, any site can be affected by this.
The other issue not yet resolved is capacity – usage outpacing investment in
underwater cables and routing systems. This results in frequent bottlenecks and
extremely slow uploads of external sites. Companies and organisations that want
Chinese viewers to access their site need to consider that it will be frequently
unavailable or load at such slow speeds that people may become frustrated and go
elsewhere.
The solution is to host a mirror of your site on a shared server in China. To do this, it
is important to note:
Chinese sites have different design requirements – often very busy sites with
•
animation and colours.
Registering your domain with .CN will improve search engine performance in
•
China and avoid your domain name being taken by someone else.
Chinese search engines also use registered domains in Chinese – a separate
•
registration is required and this is only available in China
Only companies registered in China can legally host a website in China – an ICP
•
license or application number is now required for any site, no matter what the
content is provided the site uses a .cn domain name. Application can only be
accepted from companies legally registered in China.
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Advertising & public relations
International branded PR companies now operate in most of the big cities in China
primarily servicing international companies. There are many local advertising and
PR companies with outstanding performance that offer value and know their target
audience well. Advertising and PR studios (small enterprises) often provide very
good and specialised services.
· It is common practice to present journalists with an envelope containing a few
hundred RMB as expenses, for attending a press release or marketing event.
· The joint promotion with the key tour operators in each has proven to be an
effective way for China marketing by the NTOs in China as it will also have the
input from the tour operators and the clients have tailor made products to
choose.
• The key tour operators are competitors, but sometimes they can also work
together on certain products.
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The Chinese Traveller
Who?
Among the 1.3 billion people in China, clearly not everybody can afford a trip
overseas. Disparity in income and living standards is very high. Research shows
that at least 150 million people have an income level of middle class and above,
privileged enough to afford travel abroad. Given the continuous growth of the
economy, this middle class is increasing rapidly even as the income gap is
increasing. Among this group, we can distinguish three types of travellersiii.
Official travel
•
Official travel is conducted by people employed in government or public service.
They often travel abroad upon invitation of a related organisation in the destination
country. Such travel requires approval from the Chinese authorities in advance, as it
is at the government’s expense. These officials carry official passports, which are
different to private passports. The visa procedure is handled by departments of the
Chinese government in coordination with the embassy or consulate of the
destination country.
Most of the official delegations concern meetings with foreign counterparts,
so-called inspection or technical visits. These technical visits provide the justification
to travel abroad. More often than not the planned official visits are shortened or even
cancelled while the group is already abroad. Securing an invitation to travel abroad
has in fact become a way to visit a foreign country much like tourists do. The official
delegations are often small groups of less than ten people. These groups come from
all over China, not only from the major metropolises. All travel arrangements are
taken care of by specialised departments within the ministries responsible.
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Business travel
•
This includes incentives, visiting exhibitions and inspections or technical visits. The
purpose of travel is to establish business relations and get a better understanding of
the foreign business climate and commercial partners. The actual purpose of
travelling is still leisure. Business groups vary in size and nature and can come from
anywhere in China.
Incentive travel was in the past offered by foreign investors in Chinese enterprises,
but now increasingly it is the Chinese enterprises who organize incentive groups for
their staff, customers and agents. Incentive travel is mostly in the field of IT, medical
care, automobile and insurance. To meet the needs of the incentive market, some
travel agencies have set up new departments or independent companies
specialising in handling incentive groups. In 2005, the biggest incentive group is
15,000 pax travelling to Australia and the second biggest is the 6,000 pax group to
Thailand. There are quite a number of incentive groups of around 1,000 pax
travelling to Europe and other destinations.
Chinese officials and business people can be big spenders. It includes a large
•
amount spent on private shopping. Since their travel costs are paid for, this is
not surprising.
Both business and official travel are not quite transparent and often not directly
•
operated by tour operators, but rather within the governmental departments or
by (trade promotion) consultants. Travel is often organised through a network of
private relations of friends abroad. This will change once the legal framework for
travel agencies will be adjusted to allow them to freely operate various types of
travel.
Private travel
•
Private travel, unlike official and business travel, is a new phenomenon in China.
This type of travelling has leisure as its sole (and authorised) purpose. Due to this
being a new opportunity for Chinese, their priorities are to see as many countries as
possible and get a better understanding of foreign cultures. It is often regarded as
an educational experience. The government of China has signed tourism
agreements with more than 118 foreign countries to facilitate Chinese tourist
groups, granting the so-called Approved Destination Status (ADS).
Groups
•
Most people from China are first-time visitors and travel in groups, given the
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language barriers and unfamiliarity with the destinations. They belong to the
rising middle classes and often travel in large groups (30-45 people). Certified
travel agencies in China handle the visa procedure on behalf of the
customers, following the ADS agreement with the destination country.
Individual Travel (FIT)
•
The individual traveller often has a high income and big purchasing power.
They are more likely to speak other languages and are experienced travellers.
They can be quite demanding to their agent and supplier.
The visa for FIT travellers must be applied personally. It is up to the discretion
of each embassy or consulate whether to issue FIT visas for tourism. This is
not covered by the ADS agreement or any other government policy. In fact,
FIT is not classified by China as tourism.
The demographics of private travellers vary: Pensioners are travelling during the
•
off-season mostly sponsored by their sons or daughters; the parents take their
children for travel during school holiday; and the 3 golden holiday weeks are
crowded with office workers and their families.
For now, group travel to Europe consists of more than 5 countries in the same
•
itinerary for the first time visitors. Success in arranging single country Europe
tours will depend on how well the destination is promoted.
Traditionally the domain of middle-aged males, travel is now accessible to all.
•
Tourism promotion boards, suppliers and guides should be prepared to adjust
the product to suit the demands of new types of customers.
China has many ethnic minorities with different cultural and religious
•
backgrounds. Hui, Manchu, Korean, Ughur, Kazakhs, Tibetans, Miao are just
some of them. They are potential consumers with defining characteristics and
demands.
The major Markets and their defining characteristics
•
Northern China (Beijing and North-east China)
As Beijing is the political capital, most of the official travel is from Beijing.
•
Beijingers are proud since they live in the capital. They are engaged in
•
politics and love socializing. Work comes second to friends and family.
It is also the cultural capital and the people of Beijing have a great sense of
•
history.
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Eastern China (Shanghai and the coastal provinces Zhejiang and Jiangsu)
These are regions with a history of overseas travel dating centuries, resulting
•
in many with relatives living abroad.
These areas are considered wealthiest in terms of average income.
•
Shanghainese are trendy and internationally oriented.
•
Shaghainese dialect is commonly used in business, although all know
•
Mandarin Chinese.
People from this region are known as very price-driven. They are shrewd
•
business people and drive hard bargains.
Shanghai and surrounding areas are well developed for international
•
business.
South China (Guangdong province and neighbouring provinces)
Guangdong has benefited from its proximity to Hong Kong as the commercial
•
gateway into China. Its capital city, Guangzhou, is a major trading and
commercial centre.
People in the south speak Cantonese and prefer not to use Mandarin.
•
Consumer spending is the highest among China’s provinces.
•
People in the south prefer higher standards of service to cheap prices.
•
Comparing market sensitivity to various business factors:
Factor Beijing Shanghai Guangzhou
Price sensitivity Low High High
Quality
Middle High High
expectation
Service
Middle High High
expectation
Brand awareness Middle High Middle
Where?
Statistics on China are, in a word, confusing. The arrival figures as registered by the
receiving countries and the departure figures as registered by the customs in China
do not match at all. The main reason for this is the fact that Chinese customs only
register the first destination upon leaving China. As so many travellers leave China
at the border with Hong Kong, it is registered as the first destination, regardless of
where the actual destination may be.
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For example, in 2004 the Chinese customs registered 420,000 departures for
Singapore, while the Singapore statistics show 880,000 arrivals from Chinaiv.
Top 10 Destinations
Among the top 10 destinations, the only non-Asian countries are USA and Australia.
USA has not signed an ADS agreement with China on tourism. Australia was the
first western country to sign the ADS agreement with China and has done extensive
promotion in China. Australia is not shown in 2004, since most flights to Australia go
through Hong Kong, which is then registered as the destination,
The top ten destinations for Chinese in passenger numbers (CNTA)
1999 2000 2001 2002 2003 2004 2005
1 HKG HKG HKG HKG HKG HKG HKG
2 Macao Macao Macao Macao Macao Macao Macao
3 Thailand Thailand Thailand Thailand Japan Japan Japan
4 Japan Russia Japan Japan Russia Russia Vietnam
5 Russia Japan Russia Russia Vietnam Vietnam S. Korea
6 USA S. Korea S. Korea S. Korea S. Korea S. Korea Russia
7 S. Korea USA USA USA Thailand Thailand Thailand
8 Singapore Singapore Singapore Singapore USA USA USA
9 N. Korea N. Korea N. Korea N. Korea Singapore Singapore Singapore
10 Australia Australia Australia Australia Malaysia Malaysia Malaysia
2007 Chinese departures to world regions according to Chinese customs
Destination Arrivals
Asia 36.3 million
Europe 2 million
Americas 1 million
Oceania 0.5 million
Africa 0.3 million
Europe is not in the list of top ten destinations though it would, if counted as one

destination in the statistics. The European Union member countries do not keep
uniform statistics on Chinese arrivals. The passports of China, Taiwan and
Hong Kong all have the name China on them, which leads to confusion at the
destination. Lack of unified computer data from all EU countries makes the
statistician’s job very difficult.
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Destination Europe
With the United Kingdom signing the ADS agreement in January 2005, all EU
member states are now ADS destinations. The non-EU member states Switzerland,
Iceland and Norway have also signed bilateral ADS agreements with the Chinese
government in 2004.
As a result, Chinese certified travel agencies are allowed to promote and organise
tourist groups (5 people and above) to all European destinations as well as Turkey.
With these ADS agreements, the biggest hurdle for opening up the Chinese market
has been overcome.
Europe is considered one of the favourite destinations for Chinese. It is regarded as
a multi-cultural society with a long history and diverse civilisation. When travelling to
Europe, Chinese want to visit at least three different countries. Tours take up to ten
countries within two weeks and hardly ever visit one country. Within Europe, France,
Italy and Germany are the most popular destinations.
In Europe, Germany has been receiving most of the Chinese visitors. It is pro-active
in its approach to promote tourism and encourage business links. Moreover,
Germany has taken the lead by signing ADS agreement bilaterally two years before
the rest of the EU. They have been generous with their visa regulations and in turn
gained an advantage over other European destinations.
France is also very active in promoting its destination. The cultural year of France in
China supported by both governments has had a great impact. France has for years
been issuing visa for tourism groups even while this was not officially agreed upon
by the government. In 2008 tourism to France from China suffered a setback due to
political sensitivities involving Tibet and the Olympic Torch relay through Paris. An
unofficial travel boycott against France was allegedly instigated by the Beijing
tourism board leading to a dramatic drop in tourism from China.
Switzerland has been successful in destination marketing despite having no direct
flights, not belonging to the EU or Schengen visa agreement and the relatively late
approval of ADS. The Chinese traveller has become very interested in Switzerland
thanks to extensive marketing and promotion.
Italy has been reluctant to issue tourism visas in the past, but is implementing the
ADS procedure now to conform to the agreement, resulting in much higher arrival
figures. But as Italy has a small number of direct flights, it is at a disadvantage.
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Some themes for European destinations in 2006
London: the Year of China
•
Germany: 2006 FIFA World Cup
•
Austria: 250 Anniversary of Mozart
•
Direct flights are a major selling point in destination marketing. Choice of tour
•
operator in Europe and number of nights in each destination are decided by the
first port of arrival.
“Visa shopping” in the past meant agents would bargain with different
•
consulates to find the cheapest and simplest visa application and with it the
choice of first destination. With the implementation of the overall ADS procedure
this should be not be the case anymore, as all the embassies and consulates
are supposed to apply the same rules.
Nevertheless, visa shopping still exists as some embassies and consulates
•
process visas faster (e.g. larger staff capacity at their visa departments), have
better facilities (such as special opening hours for ADS visa couriers),
communicate in a more transparent way, are more service-oriented or are less
fussy with visa processing (lower rejection rates). All contribute to the image of a
certain destination and have an impact on sales.
Destination USA
With the advent of a bilateral tourism agreement signed between the US and China
at the end of 2007, the Chinese industry was excited about the prospects of a new
shining and sought after destination for their clients. Equally excited were the US
state and city tourism promotion bodies and private tour operators eager to find a
new revenue stream as America’s tourism industry suffers from a global economic
downturn. Many tourism promotion bodies opened representative offices or
appointed sales representatives in China in anticipation of the tourism boom. From
July 2008, Chinese tour groups began to travel to the US on a tourist visas. The
weakness of the US Dollar in relation to the Chinese Yuan means stronger
purchasing power for Chinese consumers, who are on the whole aspiring to visit the
America they see in cinema and television.
We would advise caution in reading too much into this new agreement. Even before
it was inked, Chinese traveled to the US on so-called business tour groups and
estimates put them at around 400,000 per year. The US authorities expect tourism to
grow to 500,000 in 2011 and have decided on visa quotas to control the actual
numbers that can visit on a tourist visa.
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How many?
Chinese customs registered 28.85 million outbound travellers in 2004v, an increase
of 42% over 2003. 31.03 million outbound traveller in 2005,up 7.53%; 34 million in
2006 and 41 million in 2007. Clearly of all the outbound travel the majority goes to
Asia. The huge increase can be mainly attributed to the simplified procedures of
visa applications for overseas destinations. For example, Hong Kong was limited to
group travellers, but is nowadays also accessible for FIT travellers.
As mentioned before, it is not clear how many Chinese travellers actually visit
Europe as the statistics are not available or do not match. When we look at the
available figures of overnights, visa, arrivals and departures we can only estimate
that at least 600,000 Chinese travellers visited the Schengen member countries in
2004. This is approximately 3% of the total reported outbound travel market.
2004 outbound statistics reported from variousvi sources:
Destination Overnights Visitors Chinese customs
Germany 650,000 n.a. 220,000
France n.a. 400,000 200,000
U.K. n.a. 160,000 170,000
Italy 119,000
Sweden n.a. 30,000 15,400
Scandinavia n.a. 55,000 n.a.
Netherlands 80,000 n.a. 49,000
Turkey 35,000 n.a. 11,500
Switzerland 230,000 140,000 16,500
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The discrepancy in the various figures comes from the fact that Chinese
•
customs only register the first point of arrival of the tourist. In the case of
Switzerland for example, there are no direct flights so most arrivals will be
registered under a different destination.
Most European destinations registered an increase of about 30% in Chinese
•
visitors but this figure is influenced by the relatively low figures of 2003 because
of the negative impact of SARS.
The increase of 43% of total outbound travel is mainly the result of simplified
•
visa procedures to Hong Kong, Singapore and Macau.
China is numbered fourth source for inbound travel to Australia with 230,000
•
visitors and to Japan with 440,000 visitors in 2004.
China is numbered second source for inbound travel to Singapore with 800,000
•
visitors in 2004.
When?
Travel takes place throughout the whole year. As about half of outbound travel is for
business and official travel, it is not reliant on peak seasons. Domestic and regional
travel is often booked at the last minute. This is also true for European destinations,
as the agent could not know if the visa application was successful until one or two
days prior to departure. With more information available on the overseas destination
(climate, prices, attractions, events etc.) and more accessible visa procedures,
customers have started planning longer ahead. Nowadays agents can advertise
tours one or two months in advance and receive bookings, safe in the knowledge
that a tourist visa can be obtained.
Paid holidays
•
Paid holidays are not common, which is why people tend to travel only during the
public holidays for private travel. A public discussion to introduce more paid holidays
in order to spread the tourism flow throughout the year resulted in a change to the
holiday leave system in China from 2008. Employees won the right for 5 to 15 days
of paid leave in addition to (shorter) public holidays.
Employees of International companies or foreign-invested companies enjoy better
holiday conditions, with a sliding scale of paid holiday each year additional to the
national public holidays, based on years in service. These white-collar workers are
also higher paid and form an attractive potential market sector for outbound travel.
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Public holidays and school vacations
•
The public holidays were extended from 3 to 7 days in 1999, creating the
opportunity for people to travel at their own expense (private travel). Private travel is
now mainly concentrated during the public holidays. The school vacations take
place around Chinese New Year (4 weeks) and in summer (July and August).
Travelling with the family is a new phenomenon as these extended holidays have
only recently been introduced.
China has implemented a strict one-child policy during the last twenty-five years.
Families in the cities have one child only. Families from the countryside are allowed
to have two children. Travelling is also often considered an educational experience
for the only child. When a family goes travelling it might also include the
grandparents, making it three generations and a terrific challenge for the travel
planner.
The spring festival is a time for families to meet and spend time together. The
preferred destinations for this holiday are warm places closer to home. Domestic
destinations and South East Asia are the popular choice. During October and May,
more holidays were taken to long haul destinations. Many people took up to two
weeks holiday during these periods. However from May 2008, the May week-long
holidays was shortened to 3 days only and new public holidays were introduced.
New holiday system from 2008
New Year’s day 1 January (one day off)
Spring Festival Varies according to lunar calendar (3 days off extended to
(Chinese New Year) 1 or 2 weeks)
Tomb Sweeping 5 April (one day off)
Festival
Labour Day 1 May (one day off)
Dragon Boat festival June, varies according to lunar calendar (one day off)
Mid-Autumn festival September, lunar calendar (one day off)
National Day 1 - 3 October (3 days off extended to 1 week)
As the concept of paid holidays is relatively new in China, people often travel
•
with the excuse of business or official travel.
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How much?
A trip to Europe equals roughly the average yearly disposable income of people
living in the cities (1,500 Euro). As the cities in China have a population of millions, it
goes without saying that quite a few people enjoy an income significantly higher
than the average. Economic disparity is extremely high and cause for concern for
the Chinese government. Estimates are that about one third of the urban population
can afford to travel. Their average daily spending on travelling in Europe is around
300 Euro.
Shopping is one of the highlights of travelling abroad for several reasons. Firstly,
Chinese consumers are generally price conscious and consumers of luxury goods
typically seek the lowest price if this is easily identifiable. Prices of luxury
commodities can be at least 20 to 30 per cent higher in the mainland compared to
Hong Kong or Europe as a result of the high import tariffs and consumption taxes.
Secondly, gift giving is an important aspect of Chinese culture. When travelling, they
tend to bring back gifts representative of the countries they have visited, often
branded products otherwise inaccessible in China. In addition, in the business world
buying expensive gifts is a common and accepted practice and is seen as a way to
show respect.
Last but certainly not least, despite the recent expansion of most luxury brands, the
variety of luxury products available in the Chinese mainland is still limited when
compared with Europe. And some brands do not offer their full range of products on
the Chinese mainland. This is an additional incentive for the Chinese tourists to buy
when travelling overseas.
Average spending per trip to Australia is almost 3,000 USD per Chinese visitor,
•
compared to 3,600 USD per Japanese visitor and 3,870 USD per American
visitorvii.
Shopping of luxury goods focuses on jewellery, leather goods, watches,
•
accessories and ready-to-wear.
Chinese travellers still tend to carry cash, domestic credit cards
•
getting popular. of the foreign destinations now can accept Chinese credit
cards.
Singapore has introduced a visa policy connected to Visa platinum and gold
•
cardholders, they can apply for tourist visa with multiple entries based on their
credit card credibility.
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Economic hubs in Chinaviii
•
Area Cities Urban
population
North China Beijing, Tianjin, Dalian, Haerbin, Shenyang, Jilin, Xian 50 million
Eastern China Shanghai, Hangzhou, Nanjing, Jinan 30 million
Southern China Guangdong, Shenzhen, Fuzhou, Kunming, Xiamen 20 million
Western China Urumuqi, Lanzhou, Tianshui, Lhasa 8 million
Central China Wuhan, Changsha, Hefei, Chengdu, Chongqing 60 million
Average yearly disposable income per person in Euro (2003)
•
Beijing Shanghai Hangzhou Guangzhou Fuzhou Chengdu Wuhan Changsha
1,400 1,500 1,300 1,500 1,020 882 850 994
Average consumer yearly spending per person in Euro (2003)
•
Beijing Shanghai Hangzhou Guangzhou Fuzhou Chengdu Wuhan Changsha
1,112 1,104 995 1,157 734 645 725 833
What are their expectations?
Travelling is a big deal for Chinese and doubly so when travelling abroad. The
freedom to travel to Europe without the need for official permission is the beginning
of an era for the tourism industry. Tourism, however, is not a new phenomenon.
Under the pretext of business of official delegations, hundreds of thousands of
Chinese had visited Europe in the past decade.
The historic background of travelling abroad was often based on “friendly relations”
with other countries. Until the late eighties the world was divided in two camps
engaged in cold war. During this period China made a clear distinction between
friendly nations and adversaries. Officials were allowed to travel abroad only upon
official invitation to enhance friendly relations. It was therefore very much limited to
officials and seen as a great privilege. With the fall of the Berlin Wall, the
consequent change in world order and economic reforms in China, outbound travel
had moved from being the privilege of officials to a business necessity. As
disposable income and leisure time increases, it is now becoming a part of ordinary
people’s lives for pleasure and education. However, visiting other countries is still
regarded as an exchange of friendship and goodwill.
This cultural background can influence the expectations of Chinese travellers. One
often still feels honoured or privileged to travel abroad and expects a corresponding
hospitality from the hosts. With the changing times, privileged Chinese visitors are
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not necessarily received ceremoniously; rather they are often treated as a cash cow.
Frequently, the Chinese visitor is disappointed in the level of service and hospitality
he/she finds in Europe. To experience Western society first hand is very much a
culture shock. Europe is not the hyper-modern society they have expected
compared to China which has always depicted itself as backward and poor.
The first groups of travellers to Europe received a great deal of publicity and have
set the tone for Europe’s image in Chinese eyes. They view with respect Europeans’
regard for cultural heritage, the environment and personal freedoms. The positive
experience often comes from such things as access to casino’s, to luxury goods and
visits to famous traditional landmarks like the Eiffel tower and Dutch windmills.
As national tourism boards and tour operators are finally allowed to promote and
advertise their tourism products and services, the Chinese consumers will now have
unprecedented access to information. This offers a choice on what type of travel
they would like and leads to a quick diversification of the market. Although shopping
is high on the list, the negative experience of many on high pressure ‘shopping
tours’ to Southeast Asia and Australia is slowly changing the priorities. Interest in
attractions, museums and nature, variety of accommodation and means of transport
will all be expressed by this market in the next few years.
Based on a research by the China Economic Prosperity Inspection Centre in 2002
among 700 Chinese citizens from Beijing, Shanghai and Guangzhou, it was
surmised that over 60% intend to travel abroad within one year.
Excerpts of the survey:
Do you intend to travel abroad within one year?
I have been abroad already and have the intention to travel again 21.6%
I have not been abroad, but intend to go 42.25%
I do not intend to travel abroad 36.2%
Do you intend to travel abroad within three years?
Yes No Not sure
38.2% 19.6% 42.2%
When planning a trip abroad, what do you consider the most important issue?
Sightseeing schedule 27.40%
Service quality 25%
Variety of destinations 18%
Standard of accommodation and food 17%
Transportation 10.40%
When planning a trip abroad, what is your main concern?
That promises made by the agent are not fulfilled 31%
Complicated procedures 28.90%
Price may be prohibitive 20.10%
That complains will remain unresolved 11.40%
Lack of choice among travel agencies 8.60%
Source: Huanya Economic Research Institute
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Cultural differences
Travelling in Europe can be a culture shock for Chinese as we have mentioned. It
can also be so for the hosts. Managing expectations is equally important for the
hotels and service suppliers that engage Chinese tourists.
The concepts of privacy and space are quite different for Chinese and
•
Westerners. Being loud and nosy is an expression of enjoying oneself and caring
for each other, but this might be experienced as rude by Westerners. With such
a dense population, Chinese are accustomed to very little personal space and
are not used to being on their own.
Smoking is entrenched in Chinese society as the domain of men. They will find it
•
difficult to accept smoking bans in public spaces. At the same time, they will be
puzzled over the prevalence of public smoking amongst women in Europe.
As China’s history dates back thousands of years, Chinese are not impressed by
•
cultural sites that are ‘only’ a few hundred years old. This is a distinct advantage
of Europe over the new world destinations of Australia and North America. The
cultural and historical links between China and Europe should be highlighted as
much as possible.
When travelling abroad it is a rare opportunity to experience certain activities that
•
are forbidden in China. Casinos and cabaret shows cause a lot of excitement
among visiting Chinese for this reason.
In China, travel is a service and travel agents are expected to bend over
•
backwards to satisfy their paying customers. In turn, those agents expect their
partners in the destination to go along with the client’s demands under any
circumstance. The find it difficult to accept the western attitude. What we
consider a fair service for a fair price, they would consider inflexibility or lack of
caring.
Because visa approval is still sometimes unpredictable, air tickets and hotels are
•
often confirmed at the last minute. Business people, used to flexible domestic
travel, expect to be able to change their plans frequently and therefore do not
plan carefully enough to avoid late changes.
Compared to other nationalities, Chinese groups are never booked months in
•
advance. There is tremendous pressure on travel agents, visa consulates, local
suppliers, hotels, guides etc. to provide instant quotations and high quality tours
on extremely short notice. Inevitably this often leads to problems on the road and
subsequent complaints from the clients. As ADS procedures become the norm
and visa application standardised, we expect to see this problem ease.
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Consumer behaviour
Food and drink
Chinese cuisine is world famous. Chinese travellers do not easily accept other
cuisines. Whenever Chinese cuisine is not available, Chinese travellers will have a
hard time adjusting. At least one Chinese meal a day should be arranged. Chinese
meals are shared together which often results in less expensive dining compared to
Western restaurants. Chinese food abroad was adjusted to the taste buds of
Westerners and is often not up to Chinese standards.
Depending on which province they come from, Chinese have very different tastes
when it comes to food. People from Guangdong like fresh food with little spice,
people from Sichuan, Hunan and Hubei enjoy very spicy food; people from
Shanghai, Jiangsu and Zhejiang prefer sweet and people from the North of China
eat more salty and oily cuisine.
Chinese often bring their own dried instant noodles, which they can eat at any meal,
should the food they find on their trip not be suitable or not fill them up. Instant
noodles are prepared by pouring hot water on them. Though it is difficult to satisfy a
Chinese traveller when it comes to food, paying attention to the choices of cuisine
will certainly be highly appreciated. A host that takes the care to find out what kind of
Chinese food the clients like, or a hotel that goes the extra mile to add Chinese
elements to the breakfast buffet, will win the respect and appreciation of their
Chinese guests.
When it comes to drink, Chinese tea is ubiquitous. Unlike the black tea prevalent in
Europe (‘red’ tea in Chinese), Chinese drink green tea leaves, which are less
processed and therefore lighter in flavour compared to black tea. Nowadays,
sweetened iced red tea is becoming popular amongst the young. Chinese visitors
often bring their own tea leaves, since they do not expect to find it in Europe and
prefer leaves to tea bags. Hotels and restaurants would do well to provide hot boiled
water to brew tea or instant noodles even if they do not stock these items. In China
each hotel and restaurant provide unlimited hot water or green tea free of charge, so
this is expected in Europe as well. It is worthwhile stocking disposable chopsticks
even if serving western food.
Beer is popular during a mealtimes and hard liquor for the men. Women are less
inclined to drink alcohol and normally stick to tea or soft drinks. People from
northern China are more likely to drink more potent stuff, such as rice wine (mijiu) or
sorghum wine (gaoliang).
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Meals times tend to be early – 7 AM for breakfast, 11:30-12:00 for lunch and
•
around 6 PM for dinner.
All dishes are to be served at once or in the order they are prepared and rice can
•
be served in one large bowl to be shared by the guests.
In northern China people eat soup at the end of the meal, while in southern China
•
people soup is a starter.
Chinese usually don’t like sweet desserts such as cakes and are used to eat fruit
•
at the end of the meal.
In contrast to European cuisine, Chinese welcome a variety of meats and
•
vegetables in one meal. Fish, poultry, beef etc can be served together, with rice
and soup as a staple.
People from Northern China love dumplings (similar to ravioli with meat, seafood
•
or vegetable filling) as any meal of the day.
Muslims make up a large minority in China who do not eat pork.
•
There are very few vegetarians in China so no special arrangements need to be
•
made, unless it is a Buddhist group.
Accommodation
Accommodation is normally arranged by the European tour operator. Hotel chains
traditionally do not have direct contact with Chinese travel agencies although this
will change. Chinese consumers are not familiar with the range of hotels in Europe
or the standards. They form their expectations based on hotels in China and
assume that the standards are the same across Europe. Managing their
expectations and providing more information in advance in very important.
Chinese travellers often judge the hotel by the size of the lobby. They prefer large
hotels with a modern look and state-of-the art equipment. A double room in China
means 2 separate single beds, the equivalent of twin room in Europe. This is also
referred to as ‘standard’ room and is preferred by Chinese guests.
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Hotels that feature Chinese restaurants or with a Chinese restaurant in the
•
vicinity are always preferred.
Shopping areas within walking distance have preference.
•
It is helpful to provide information in Chinese where the nightlife takes place or
•
where there are casinos.
Chinese people are not used to drink tap water. They expect hot water flasks or
•
water kettles in the room.
We recommend stocking the mini bar in the room with green tea leaves and
•
instant noodles. It is important to clearly show which items are for sale.
Chinese electric plugs are 3 pronged and different to any European country.
•
They use the same wattage, but adaptors are needed to suit the local sockets.
Chinese people travel light so a basic selection of accessories such as
•
toothbrush, toothpaste, razor, comb etc. in the room will be appreciated.
Chinese international satellite programs are available all globally. CCTV 9 is an
•
English language channel while other CCTV channels are all in Mandarin. Many
satellite channels available in Europe are in Cantonese, so this is a point to
notice. Providing such channels is a very good selling point.
Transportation
Coach: Comfortable, fast, safe and economical arrangements are expected.
Chinese groups mainly travel by coach through Europe. The Chinese travel
agencies are not familiar with the rules and regulations covering coach drivers in
Europe and try to extend the driving hours to fit more in to each day. Local tour
operators should clarify this area and provide (where possible) a seamless service
throughout Europe.
Rail: Travelling by train through Europe is gaining in popularity, particularly for FIT.
There is a room for much more promotion as Chinese are very used to this mode of
transport, but have no awareness of how advanced and comfortable the rail system
in Europe is compared to their own.
Air: The main requirement is direct air connections. There is a bottle neck on air
routes from China to Europe and many choose connections via Asia or the Middle
East. Air routes to Europe from Chinese cities other than Beijing, Shanghai and
Guangzhou are preferred as currently almost all travel to Europe must transfer via
these cities or Hong Kong. Some agencies even arrange charter flights during the
peak periods to resolve this.
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Chinese-speaking cabin staff are vital, as there may be many tourists who are
•
flying for the very first time.
As a courtesy, any local maps translated to Chinese will help the tourists gain
•
courage to venture on their own.
Sightseeing
Many Chinese travellers to long haul destinations are leaving their country for the
first time. They prefer to visit at least three countries during their trip.
Mono-destination itineraries are still rare but gathering interest. Attractions and
itineraries are often decided by the European tour operator and are pretty standard.
To promote new attractions or itineraries, the European providers will need to build
long-term relationships with the Chinese travel agencies to gain their trust and
support. As travel bookings are often last minute, less attention is paid to the details
of the itinerary. With the limited knowledge of the agent this cannot be checked. Of
course, it is does not help customer satisfaction at all, but will improve only with
more experience, longer planning time, better visa procedures and consumer
sophistication.
The Chinese-speaking tour escort or guide is of great importance to the Chinese
tourist. Whenever the tour guide is not up to scratch, complaints will ensue.
Checking in advance the source region of the group can help to match them with a
suitable escort/guide. The tour leader coming with the groups is supposed to speak
English, but don’t be surprised if communication proves difficult. Recent experience
of ADS groups shows that agents try to save money by not paying their tour leader
or hiring young, inexperienced ones. The tour leader then attempts to make up their
revenue from shopping commissions.
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Shopping
Shopping opportunities must be included in coordination with the travel agent and
tour leader. The Chinese travellers love to purchase souvenirs during their trip, as it
is their habit to offer presents to all their friends, relatives and colleagues back
home. A large proportion of their trip budget is spent on gifts both in proportion to
their income and in real terms. Chinese people are very socially aware and care
what people think of them. They may all purchase the same goods once one
member made a buy. Brand is very important to them. They will purchase items so
as not to be outdone or not to embarrass the tour leader. However pressure selling
is having a negative effect on the reputation of many destinations and travel agents.
Though shopping is integral to the experience, discretion should be used. In China,
shopping malls have long opening hours so it is important to inform the clients what
the opening hours are in your region, to avoid disappointment.
Favourite gifts: clothing, jewellery, cosmetics, watches, regional delicacies and
•
souvenirs.
Some groups already travel solely for the purpose of shopping. This started in
•
HKG and Singapore and now also happens in France and Italy.
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Hospitality
Service and etiquette
Chinese people are quite patriotic and proud of their culture. It is considered
ill-mannered to criticize China for sensitive issues like human rights, Taiwan or
Tibet, which are based on Western media information they have no access to. As
leisure tourists they do not expect to enter into political discussions. Based on
China’s history of occupation by foreign nations, they are sensitive to racial
stereotyping and bias. If they feel this to be the case with any service provided to
them, their offence will be severe.
Chinese feel free to ask direct personal questions out of simple curiosity (personal
income, blood type, date of birth and family relations for example). This is an
expression of concern and friendship and not meant to be rude or intrusive. The
differences between Chinese people from various regions can be just as
pronounced as between different countries in Europe. Before receiving a group it is
useful to know which area they are from in order to adjust your service and planning
accordingly.
Credit cards are becoming more popular but international cards are difficult to obtain
and normally require a large deposit in China. Therefore for travel, cash is still king.
Unfortunately the large amounts of cash they take for shopping make Chinese
tourists a target for robbery, so safety is one of their greatest concerns and should
be addressed head-on.
Name cards are always exchanged at business and social meetings and should be
handed out and received with both hands holding the card. If receiving Chinese
guests, or visiting China, it is a good idea to prepare Chinese versions of your name
card. They will show your guests/partners how to pronounce your name and what is
your position. The Chinese surname always comes before the given name, usually
consisting of one syllable, although there are exceptions. Names of ethnic groups in
China are different. It is acceptable to shake the hands of people of the same
gender while with younger people social handshaking is much the same as in the
west. Social kissing, which is normal in Europe, is not the norm in China.
As Chinese avoid head on confrontation at any cost, you may be excused for
thinking after a visit that everything went smoothly and to their satisfaction. In fact,
the reason they do not complain is because they fear it will lead to an embarrassing
confrontation. The concept of 'face' is extremely important. MianZi in Chinese, can
be lost (shi mianzi) or given (gei mianzi). Losing face happens when someone is put
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in an embarrassing situation. Making a Chinese person nervous in an already
uncomfortable and alien environment will definitely lead to a loss of face. Even when
in the wrong, avoid a direct confrontation. If there is a tour leader, it is best to
discuss problems with him or her first and ask him/her to facilitate the resolution.
Finding a compromise is always seen as the best way.
It is usually likely that the guests will return to China and either complain to their
travel agent or just to their friends and family. In any case, a responsible host will try
to find out their real thoughts of the experience before they depart. Some tips on
how to accomplish that:
Ask the agent - Follow up visits by checking with the tour operator or travel agent
•
if they had received any complains or comments on the services.
Formulate questions differently – rather than asking “is everything ok?”, rather
•
“how can we make your experience better?” or “what suggestions can you make
to improve our service?”, so that the reply will be perceived as friendly and
positive.
Never assume you have received an honest reply. The cliché about yes meaning
•
maybe and maybe meaning no is very much a fact in China.
Language
Knowledge of foreign languages is very limited despite compulsory English studies
at school. There are no opportunities to practice and Chinese are inherently shy
about what they do not master. Information in Chinese is a necessity on board
airlines, in restaurants, tour attractions, hotels and so on. This can begin with
marketing collateral and extend to websites, information at consulates, tourist
information desks at airports and in city centres. Chinese who travel abroad read up
on Chinese language guide books written by Chinese. The information that you
provide to the guests should consider what they are interested in, instead of direct
translation of the same collateral that is used for a western audience.
The mainland uses a simplified form of Chinese written language, while Hong Kong
and Taiwan use the traditional form. These must not be confused. Spoken Mandarin
Chinese is the official dialect of China and Taiwan and ostensibly Hong Kong
although Cantonese is the preferred lingua-franca in South China and Hong Kong.
In Shanghai, though Mandarin is understood, Shanghainese dialect is the preferred
business language.
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The satisfaction of a tour group often depends on the skills of the Chinese speaking
tour leader. Where possible, matching the dialect or background of the guide with
the group will automatically put the tourists at ease.
Illegal immigration
As there is such disparity of income within China, people traffickers profit from the
desire of poor people to look for opportunities to immigrate to the west. The advent
of tourism groups unfortunately gives these criminals another tool in their effort to
smuggle people over. The methods they employ include fake passports and
national ID cards, fake invitation letters and bribing travel agents to help with visa
application.
To deal with this threat, CNTA has strict criteria for ADS approved agents as well as
mechanisms to prevent abusing the system. Local travel agents check very
thoroughly all applicants, before the consulates do the same. Normally, travel
agents ask for a deposit of up to RMB 50,000 per person, refundable when the
customer returns to China. Some consulates require the travel agent to show the
original passports and boarding cards of the tourists upon their return as an
additional precaution. The agents are liable to cover the entire cost of repatriation
from their insurance fund and be blacklisted with the consulates.
The tour guide usually carries all passports of the group members.
•
Both travel agents and consulates keep lists of cities in China that are regarded
•
high risk for illegal immigration.
Travel agencies operate screening procedures on customers that are similar to
•
those employed by consulates.
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Sales & Marketing in China
Introduction
Chinese consumers and trade are different and marketing to them is the main
challenge for new entrants into this market. Adaptability, creativity and willingness to
listen and be flexible with plans, will be rewarded. Frequently, strategies will need to
be adjusted or refocused to keep in line with a fast changing market place.
The Swiss National Tourism Office, German Tourist Office, Italian Tourist Board,
Maison de la France, Finnish National Tourist Office and Visit Britain have now all
established themselves as well-known travel promotion organisation in China. Their
extensive network within the trade and media is an excellent gateway to the Chinese
market.
National and Regional tourism boards have the option of using a local travel
•
consultancy to deliver tailor-made marketing strategies before they embark on
establishing their own branch.
Chinese business is based on personal relationships and trust. When selecting a
•
local partner, agent or representative, consider their existing personal network
with the travel trade, media and government.
Governmental organisations
Maintaining good relations with China National Tourism Administration (CNTA) and
its local branches cannot be stressed enough. CNTA is responsible for implementing
the ADS policy and their public or tacit approval is always needed. Any marketing
campaigns should be advised to them and ideally gain their approval and cooperation
at both national and local level.
Travel trade
The initial partners are often the more than 700 certified international travel
agencies who are authorised to handle tourist groups. They are in direct contact
with targeted customer groups. Profitable cooperation will come through designing a
joint promotion and marketing. A win-win solution found through incentive schemes
or marketing cost sharing is advised. Cooperation can include further parties such
as airlines, media and other overseas travel organisations (hotels, shopping areas,
attractions etc.). Though more complicated, it is also more effective and allows the
agents to offer a fully designed package.
Low budget and boutique hotels are more of interest to FIT travellers be it corporate
or students. Working with one of the many on-line hotel reservation centres will
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bring the benefits of their local knowledge and market reach at minimal marketing
expense.
Travel agents are eager for practical information in order to understand overseas
destinations since they themselves have not travelled abroad much. Familiarisation
tours are very useful and serve to enhance mutual relationships. Cooperation
should be planned for long term profit, as the industry is still in its developing phase.
Direct consumers
Local media, with travel agent support, will be the most effective route to reach the
target consumer. Press tours are more effective when combined with familiarisation
tours for travel agencies focusing on a range of products. For example, the
cooperation of Swiss National Tourist Office with Beijing Traffic Radio Station and
CITS resulted in a successful campaign promoting Ski Holidays in Switzerland.
There are many opportunities as people in the media are extremely eager to
promote travelling abroad. New ideas for stories do not come often so it is possible
to secure firm commitments for new items and advertorials on the basis of well
executed press tours.
Suggested marketing methods
FAM tours were mentioned above. They are not only useful for raising awareness
but also for improving relations with key contacts. Cooperation of different tourism
related bodies to provide a seamless package to the consumer as suggested above,
helps overcome the agent’s lack of knowledge and initiative in promoting new
destinations.
Any new marketing campaign will require high profile press events and direct
contact with the trade through newsletters promoting new itineraries and products.
Involvement of either government bodies or one of the main Chinese tourism groups
will help with the publicity and the follow through. Attention should be paid to the
dominant players in each geographical region. Plan your campaign in a gradual
way, since it is impossible to cover all of China with one single campaign. This
market is too large and shifts constantly as it develops.
Since Chinese place high value on famous brand names, marketing strategies can
be adapted to suit. Joint promotions with famous brands of electronics, drinks,
watches, cars etc. that play into this characteristic have a higher chance of success.
Certain target groups cannot be easily reached through the mainstream retail travel
sector. These include the affluent, corporate and incentive travellers. In order to
market to them, other channels should be tapped that will require assistance from
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local specialist consulting companies, trade groups, clubs, associations and
government bureaus.
Competition from other destinations
Many other outbound destinations have been active in the Chinese market for many
years before Europe joined the fray. Their experience is worth noting, although
some have distinct advantages over Europe in terms of geographic distance and
cost.
• Hong Kong has touted itself as the shopping paradise and focused on visiting
relatives from southern China. Another campaign focused on students. Hong
Kong joined forces with Macau, Shenzhen and Guangdong to further develop the
Zhuhai delta as a tourist destination. It has benefited from higher spending power
of individual tourists following the decision to allow FIT travel to HKG.
• Thailand is now focusing on improving its image following customer complaints
over high pressure shopping and low standard of tour guides. Quality logos have
been introduced in cooperation with the local government tourism bureau.
• South Korea runs a campaign in cooperation with CNTA. In Beijing several South
Korean themed events take place, like a film festival, food weeks and travel
exhibitions.
• Japan’s strategy focuses on Greater China (mainland China, Taiwan and Hong
Kong). Vouchers for travel on the subway and light rail, museum visits and so on
are distributed locally. Visa procedures have been simplified and visa fees
reduced.
• Singapore is targeting MICE and FIT travellers. Though FIT customers are higher
spenders compared to groups, most consulates restrict visa applications due to
fear of illegal immigration. In contrast, Singapore’s visa regulations have been
relaxed for FIT and the visa extended, for example, from 14 days to 30 days.
• Australia and New Zealand have a joint marketing campaign. They often focus
on nature and adventure in tourism, spend high amounts on advertising in TV,
billboards and public transport and engage travel agents in training and
promotion programs.
• USA has begun promotion in the Chinese market in 2008 and is the most aspired
to destination for Chinese. However the US authorities limit the number of visas
they issue and require personal interviews and biometric scans, thereby
restricting fast growth from China to USA.
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COTRI , CTW awards and Quality Label
In 2008, For the fifth time the COTRI (China Outbound
Tourism Research Institute) has given awards to
international tourism companies and organizations which
provide excellent services and products for the growing Chinese Outbound Tourism
market. The “CTW Chinese Tourists Welcoming Award 2008” winners were
presented with the awards during the COTTM China Outbound Travel and Tourism
Market on April 14th, 2008 in Beijing
Prof. Dr. Wolfgang Georg Arlt, Director of the German-based COTRI emphasizes the
need for the CTW Award: “Chinese tourists are increasingly willing to pay more for
better service. The CTW Award helps them to identify destinations and service
providers which are going the extra mile to cater to the specific needs and
expectations of Chinese travelers. With more than 40 million Chinese traveling
across the border in 2007, this is a market which cannot be ignored.”
Started in 2004, the CTW Award is presented in five categories: Product
development, Marketing, Internet/New Media, Service Quality and Overall
Performance, with Gold, Silver and Bronze awards given away by an international
jury.
Starting in 2008, COTRI will verify companies and institutions,
which are engaged in offering excellent services to Chinese
visitors, with the COQ China Outbound Tourism Quality Label.
After going through an online self training, these tourism
organizations - including destinations, transport, hospitality,
attractions and retail - have to submit an action plan,
containing measures for improved services to Chinese tourists. Several appointed
affiliates around the world including ChinaContact have been authorized to offer the
training necessary to obtain the quality label. Further details about the Quality Label
can be found on the ChinaContact website.
Exhibitions in China
For a country where less than 2.1% of the population takes overseas trips, China
has developed quite an early fascination with travel & tourism exhibitions. This year,
six international fairs featuring outbound travel will be held, in addition to numerous
domestic and inbound fairs run by provincial tourism boards across the country. Two
of these only started in 2005. Despite the hype from tourism boards and exhibition
companies, most fairs are dogged by low public attendance and a lack of proper
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organisation. Visitor figures cannot be trusted to show a realistic account of a fair’s
outcome.
Why is supply running far ahead of demand? Since the government introduced
three 'golden' holiday weeks and with ADS policy spreading to more countries,
tourism has become a major economic (and political) factor in China. Many tourism
groups and hotel chains are invested by powerful, connected people. The potential
to make money from travel companies by holding exhibitions, when added to the
desire of city governments to gain international exposure and credibility, becomes
irresistible.
CITM
The most established travel exhibition running since 1998, China International
Travel Mart is organised by the China National Tourism Administration (CNTA).
Held on alternate years in Shanghai and Kunming each November about one week
after WTM, it is regarded as the largest and most important fair in China. Though it
focuses on domestic and inbound tourism, outbound travel makes up about 1/4th of
the total space of around 46,000 square meters. After the SARS epidemic of 2003,
Kunming CITM failed to attract many buyers and the organisers did a poor job at
providing adequate infrastructure and planning. Shanghai 2004 at the new Pudong
International Convention centre was much better although buyer attendance was
disappointing. In 2005 there were almost 700 international stands representing 81
countries. Kunming’s new exhibition halls mirror those in Beijing though they seem
too massive for the city. In 2006 and 2007, the exhibition continued to grow in size
but still lacked professional management leading to complaints of thefts and loss of
marketing collateral. The 2008 fair is held again in Shanghai.
It is unfortunate that such an important show is still held in Kunming every other
year, as western China is still not a large enough market for outbound travel.
Domestic destinations are much more popular for the local population at this time.
Nevertheless, presence at CITM is important as this is the main official international
travel expo in China. Maintaining good relations with CNTA (China National Tourism
Administration) and local tourism boards is important for national tourism boards
and multinational companies. With the current interest in China’s outbound sector,
there is no doubt that CITM2006 in Shanghai will be the largest ever.
BITE
Not to be outdone by CITM, Beijing municipal tourism board (BMTB) started its own
travel show in July 2004, BITE (Beijing International Tourism Expo) at the old soviet
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era Beijing Exhibition centre in west Beijing. It is smaller and attracts few foreign
NTO's, mostly from Asia. Most of the visitors tend to be consumers as it takes place
during the summer school holidays, when travel agents are at their busiest. The
domestic travel market takes the bulk of the space, with regional tourism promotion
boards using ever fancier, colourful stands and music/dancing to attract visitors.
BITE is managed by a Singapore based exhibition company with the support of
BMTB.
GITF
Guangzhou, the commercial centre of south China, hosts GITF each March in a
small area of the brand new and immense International Convention Exhibition
centre outside of town. Focusing on domestic travel for the most part, it attracts
mainly regional interest and Hong Kong companies. It has been held since 1993.
Guangdong province is the largest single exporter of outbound tourists (which
includes Hong Kong and Macau on its borders). To tap into this vibrant market,
representation at this fair can be useful.
WTF
Back in Shanghai, WTF (World Travel Fair) was the first event focusing on ADS
outbound destinations. Held at the same location as CITM in January for the past
two years, it has moved to March this year at a new location, the Shanghai
Exhibition Centre on Nanjing West road. This allows for more time to elapse after
CITM, better weather and a more convenient location in central Shanghai. Officially,
1.5 days are reserved for trade-only visitors. The experience in 2005 was that many
non-trade visitors were let through due to management confusion. This led to
scenes of crowds grabbing brochures and gifts while attempting to hold business
negotiations on the stand. WTF is privately organised by VNU Exhibitions with the
sponsorship of Shanghai Municipal Tourism Administrative Commission. In 2009,
the fair will be held at the larger exhibition centre in Pudong.
COTTM
China Outbound Travel and Tourism Market is focusing on being the only China
outbound travel market purely for the trade. Organised by Tarsus Exhibitions, a UK
company, it started at the Agricultural Exhibition Centre near the embassy district in
east Beijing in 2004. The first ever BITTM was held with maximum of international
marketing effort – a novel phenomenon for China. Local participation however was
less impressive as the organisers did not spend the same energy on local promotion
for buyers (though they did sponsor 200 qualified buyers). Some of the exhibitors
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felt attendance was too low and some of the agents visiting said the show was too
small. Other exhibitors were extremely satisfied by the quality of the buyers visiting
and told me they were able to negotiate contracts at the show and received new
business as a direct result.
As a new concept it still needs to be accepted by China’s travel industry, however
this event benefits from the experience and professionalism of a European event
management company. The organisation, monitoring and auditing is all done to a
European standard, which addresses some of the issues mentioned in the next part.
From 2007, the fair was held at China World Exhibition Centre and has grown
quickly attracting many first-time foreign exhibitors.
Event report 2008:
The exhibition took place at the China World exhibition hall in east Beijing on the 3rd east Ring road.
There were 2 joined halls holding the exhibition. Of the European countries' tourism boards only
Belgium participated but private companies from across many countries were there as well as the
tourism boards of several African, Middle East and Asian countries did participate.
From the second day it was very quiet, most of the time I met with agents that had pre-arranged
appointments. The 3rd day was probably superfluous and many people had gone to attend the
IFCOT forum that took place on that day.
In terms of quality of buyers, we still have to see what actual business comes out of it. Many of the
agents I know that attended are in senior positions and are decision makers. But there were also
many operations staff that only wanted info and did not really have any actual business to discuss.
So I would say it was a mixed audience and not enough of high-level managers that take decisions
on the product.
As the travel trade events in China are traditionally not very effective in facilitating B2B meetings and
discussions, this is still better organised than those exhibitions that combine public and trade visitors.
In the setup days there were thefts (also during the exhibition itself people stole brochures - for
recycling) and the security did not prove efficient enough. I was based at a stand right next to an
entrance and witnessed how the single guard had to constantly block and pull back unauthorized
people throughout the day.
I received feedback from other exhibitors that were new to China that they would have liked to attend
a seminar or workshop preparing them to dealing with the Chinese buyers and to negotiating with
Chinese clients. In 2005 ChinaContact organized a one day forum precisely for this purpose which
was well attended. The feedback from Belgium Tourism board was about the same issue of people
sneaking in to take brochures for sale to paper recyclers and many requests for 'invitation letters' for
European visa.
Final word - this is very much a regional event for Beijing and North China. Even paying the agents to
fly over does not seem to entice them if the invitation is not made through the right connections. So
unless more is done to guarantee an attendance by Shanghai and Guangzhou agents, it will be up to
the exhibitors to attend events also in those cities during the year, not just 1 exhibition.
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CIBTM
China Incentive and Business Travel Mart is organised by Reed Exhibitions after a
smaller event held in Shanghai in 2003 failed to attract the desired attendance. It is
the only event focused on corporate travel, catering to buyers from multinationals,
Chinese companies and government departments. The location is China World
hotel and convention centre. This is a rather small exhibition which offers good
opportunities for those specifically targeting the corporate client. The event is held in
July in Beijing but was not run in 2008 due to the Olympic Games. Scheduled to
resume in 2009.
IT&CM China
Organized by TTG Asia and held in Shanghai in March. This is an exhibition with
several forum sessions alongside it, addressing corporate travel issues. The
exhibitors are mainly hotel chains and destinations appealing to corporate travel
buyers. The visitors include Chinese business travel agencies, corporations and
hosted buyers from the West.
ALTM
Asia Luxury Travel Mart is the sister fair to ILTM in Cannes and was held in
Shanghai since 2007 at the same venue, Shanghai Exhibition Centre on Nanjing
West road, opposite the Ritz-Portman Hotel. The fair is targeting suppliers of luxury
travel products and services and provides fixed appointments during the 3 days
exhibition of 20-25 minute duration. On the opening day of the fair a half day
conference is held for all exhibitors and delegates with keynote speeches and panel
discussions. This year the topics covered were the emergence of luxury
consumption in China and image PR in China. Most exhibitors used the shell
scheme while a few national tourism boards and hotel groups opted for designed
stands.
In 2008 it was held on 16-19 June. Several companies and groups used the event to
launch products or services:
Gulf Air launched its direct flight Shanghai-Bahrain
•
Ritz-Carlton announced that it will be launching an ultra brand of resorts,
•
Reserve, which will be targeted at the top spending 2% of its clientele.
Hyatt Hotels and Resorts announced that it will be developing several new
•
properties in the Asia Pacific region under its boutique Park Hyatt and larger
Grand Hyatt brands over the next 12 months.
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Sample Geographic split of buyers for one exhibitor:
Australia – 5 Bangladesh – 1 Singapore – 9
Canada – 1 Russia – 2 Taiwan – 2
Usa – 1 Thailand – 2 HKG – 6
Bahrain – 1 Korea – 2 China
Dubai – 1 Malaysia – 2 Beijing – 10
India – 4 Japan – 6 Shanghai – 8
In terms of quality buyers, the show proved to have mixed success and feedback on
the experience will be sent to the event organisers. It was crucial to have
researched the buyers in advance and select the right people to meet. However the
online description of agents is not always accurate so some of the meetings did not
produce any concrete potential.
ALTM assessment
Pro: Ability to meet decision makers from many countries in Asia Pacific in one place, saving on
travel and research costs; exposure to media contacts and potential trade partners such as hotel
groups and private jet companies; gives a good overview of other players in the market and the
direction product and service is heading.
Con: Production values of the show were not as high as expected and in some aspects
disappointing; Research into buyers seemed to lack when it came to Chinese buyers with some
either too small to have purchase power or engaged in mass tourism rather than luxury.
I am not certain if I would recommend clients to attend again next year. This is mainly due to the
quality of Chinese buyers which was well below the quality of buyers from other countries. I know
very well how difficult it is to put up a quality luxury event in China and I commend the ALTM team for
the work they have put into this year's event.
Challenges and recommendations
There are several problems shared by all events, for prospective international
exhibitors who want to introduce their products to the Chinese market, whether
trade or public.
English is useless even when dealing with the trade. If you don't have an
•
interpreter and Chinese language marketing collateral expect your experience to
be a waste of time.
Statistics are (nearly) useless. A CITM official admitted that they can get no
•
reliable data on visitor attendance numbers, not to mention demographics or
other analysis. Monitoring is outsourced without reliable control and ticket
forgery is common place.
Most brochures and give-aways are wasted on freebie hunters and paper
•
recyclers.
Costs charged by the official contractors for set-up, construction, translation and
•
other services can be as high as in Europe when they charge foreign clients. The
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cost for local companies is much lower.
Despite officially declared trade only days at all fairs, controlling this policy is
•
tricky, and you will find many time wasters during these days.
Chinese are cautious with new business contacts and do not normally conclude
•
business at fairs. They regard travel exhibitions as a place to pick up new ideas
and begin a dialogue with prospective suppliers.
Costs can often escalate. Aside from booth rental there are management fees,
•
set-up fees and other extras that may not be clear from the outset.
What can you do to make your investment in exhibiting in China a success?
To maximise your exposure, effectively market your products and reduce your
•
costs you should focus on one or two fairs that cater to your target market and
plan your visits to China around them, including follow up visits to potential
clients.
Use a localisation company to convert your brochures, website etc. to Chinese
•
and employ an interpreter with travel industry experience.
Prepare to invest in an eye-catching design and Chinese signs/posters.
•
Make appointments in advance. If public fair days are not a priority, use this time
•
to visit clients in their office or at the hotel.
Invite high potential clients to lunch or dinner stressing socializing rather than
•
business talk.
Register early as discounts are available up to 3 months before start date. Times
•
and discounts vary depending on fairs.
There are many exhibition and consulting services in China that can help to make
the arrangements. It’s important to work with ones that have specific experience in
travel fairs and no communication barriers. They will save you time and money and
understand the local market needs. Travel exhibitions are still experiencing growing
pains, but are already a good introduction into the market and a great marketing
opportunity for inbound organisations.
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Recommended events for companies or promotion bodies in the West who
are thinking of exhibiting in China.
For Asian destinations the choice will be different as their source market covers
more areas of China.
COTTM: It is the only purely outbound B2B expo in China and has the potential
•
to become a major event on the calendar, provided the organisers can skilfully
combine their international expertise with local knowledge. The ability to hold
business talks on your stand without being hoarded by public visitors looking for
free gifts is very valuable. Note that this is mainly for Beijing and North China
agents.
http://www.cottm.com/
•
CIBTM or IT&CM: managed by a well known international exhibition company
•
and focusing on the corporate travel sector only. Focusing on regional business
in either Beijing or Shanghai.
http://www.cibtm.travel/
•
http://www.itcmchina.com/
•
CITM: Important for good relations with the Chinese authorities and credibility in
•
the market, even if not managed extremely well.
http://www.citm.com.cn/
•
WTF: Can be of use to tourism promotion boards of ADS destinations. Regional
•
show for Shanghai and Eastern China. Has been making efforts to appeal more
for B2B. They also feature a full day forum on Chinese outbound tourism.
http://www.worldtravelfair.com.cn/
•
Forums and Conferences in China
International Forum on China Outbound Tourism (IFCOT)
•
http://www.outbound-tourism.cn/english/intro.asp
•
China Travel Distribution and Technology Summit (CTDTS)
•
http://www.traveldaily.cn/AdLinkCount.asp?id=52
•
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Forums about China in the West
China – the Future of Travel (ChinaContact forum on China’s Tourism Sector)
•
http://www.future-of-travel.org
•
The ChinaContact forum is the only event outside China that brings together
•
both Western and Chinese experts on the topic of Chinese tourism industry
development. Through forums and interactive panel discussions delegates
deepen their insight of China as a tourism market and destination. This
landmark event was held at World Travel Market annually since 2006. Support
is given from international organizations and industry leaders as well as global
travel trade media partners.
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Looking to the future
By the year 2020 the number of Chinese outbound travellers will reach 100 million,
according to projections of the World Tourism Organisation. This is a remarkable
average increase of 12.8% yearly. China is considered as one of a few dynamic
tourism growth markets in the world. These are realistic projections given the
economic growth and the fact that so many people are eager to travel abroad and
are interested in foreign cultures. China was a closed society for many years and
experienced fast paced and dramatic opening up in the past two decades.
Promotion and marketing are now the vital tools in exploiting the market potential.
Consumer target groups require more information on the range of products
available to raise their level of sophistication when making travel choices. Most
popular tourism destinations have signed ADS agreements with China with very few
exceptions. Canada is the last major tourist destination not to be sanctioned as an
open destination for Chinese tourists. Soon Chinese will have as much choice as
tourists in western countries and competition for their business will be fierce.
Companies who intend to tap into this market must establish an early presence and
be willing to adapt and develop their products and service as needed.
We can expect further segmentation and specialisation in the market as Chinese
consumers look for specialists in niche tourism sectors such as sports tourism,
adventure and cultural tours. Improved access to internet distribution will allow more
suppliers to directly offer their services to the market though the prospects of direct
online credit card bookings are not great in the near future.
Knowing how to tailor the product and the marketing message to a Chinese
audience is crucial to success in China, as is carefully selecting partners for
cooperation. Take care in evaluating your chances and researching your potential
collaborators and agents. If an offer of business seems too good to be true then
often it is. China still harbours many pitfalls for new entrants and the best advice is
to ask for help from those that have done it before you.
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Further Information online
ChinaContact website: http://www.chinacontact.org
•
ChinaContact Tourism Advice Network: http://network.chinacontact.org
•
China Travel Industry Blog: http://news.future-of-travel.org
•
China Outbound Tourism Research Institute: http://www.china-outbound.com
•
China Business Network: http://www.thechinabusinessnetwork.com
•
China Business Services and China Business Blog:
•
http://www.chinabusinessservices.com
Great Eastern Studio: http://www.greateasternstudio.co.uk
•
China Advisers Network: http://www.china-advisers-network.com
•
Contact details
If you have any comments, or for further information and advice on accessing the
fantastic potential that is the Chinese tourist market, please contact ChinaContact
for a free consultation:
ChinaContact
London, UK
E-mail: info@chinacontact.org
Tel: +44 20 3239 9688
Skype: ccontact88
www.chinacontact.org
Also available on these online networks:
LinkedIn, Plaxo, Video, Xing, Twitter,
FriendFeed, Google Friend Connect
Sources
i
China National Bureau of Statistics and media reports – statistics vary
ii
China National Tourism Administration (CNTA)
iii
Survey by Tourism Research Institute of China Academy of Science in 2003
iv
Singapore Tourism Board
v
CNTA
vi
CNTA and relevant foreign NTO
vii
Tourism Australia
viii
China National Bureau of Statistics
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