investing in China’s tourism future 中国旅游业发展咨询有限公司

The growth of Chinese travel and tourism: how will it impact the global tourism industry? Origins and growth trends in Chinese tourism The impact of Chinese tourism on domestic and regional economies How hard is it for foreign travel companies to succeed in China? Opportunities for western companies in China's tourism sector What the future holds for China's tourism sector? 8 October 2007

Origins and growth trends in Chinese tourism

The impact of Chinese tourism on domestic and regional economies

How hard is it for foreign travel companies to succeed in China?

Opportunities for western companies in China's tourism sector

What the future holds for China's tourism sector?

About the speaker Expertise on China business and culture as well as speaking fluent Chinese. Lived in China's two commercial power houses, Beijing and Shanghai and travelled extensively to China's major cities, forging good personal relationships with key private industry leaders and public officials. Served as China Director of E-commerce for Gullivers Travel Associates, overseeing all aspects of the company's electronic product distribution in China. Planned and executed a high level three-day conference on modern tourism trends titled 'The Future of Travel is Here', co-hosted by Beijing Municipal Tourism Board. Returning to Europe in 2005, Roy founded ChinaContact to assist tourism companies, travel providers and tourism promotion bodies eager to discover the tremendous potential of China as both market and destination.

Expertise on China business and culture as well as speaking fluent Chinese.

Lived in China's two commercial power houses, Beijing and Shanghai and travelled extensively to China's major cities, forging good personal relationships with key private industry leaders and public officials.

Served as China Director of E-commerce for Gullivers Travel Associates, overseeing all aspects of the company's electronic product distribution in China.

Planned and executed a high level three-day conference on modern tourism trends titled 'The Future of Travel is Here', co-hosted by Beijing Municipal Tourism Board.

Chinese Outbound Travel

China outbound tourism will greatly impact the international tourism industry by 2020, accounting for the single largest source of international tourism. Each and every tourism organisation and company needs to formulate a China strategy and prepare the ground work now.

Challenges: The ‘Open Door’ myth China has announced an Open Door policy. However, in the service sector… The government puts barriers to foreign competition to protect local business. Business relations are based on trust and friendship built over time. Chinese travel agents are largely ignorant of long haul destinations, therefore are weary of promoting new products. 門

China has announced an Open Door policy. However, in the service sector…

The government puts barriers to foreign competition to protect local business.

Business relations are based on trust and friendship built over time.

Chinese travel agents are largely ignorant of long haul destinations, therefore are weary of promoting new products.

Popular destinations (ADS) Most popular destinations for Chinese Reasons: politics, time, cost, cultural affinity, language, food Hong Kong, Macau, Japan, Korea, Thailand, Vietnam, Russia, USA, Singapore, Australia, Malaysia France, Switzerland, USA, UK, Australia, Germany, Canada, Italy Top aspirational destinations Reasons: status, novelty, culture, business needs, shopping

Most popular destinations for Chinese

Reasons: politics, time, cost, cultural affinity, language, food

Top aspirational destinations

Reasons: status, novelty, culture, business needs, shopping

Size of outbound market 12,000,000 2001 Turkey / Egypt Germany / South Africa EU / Africa UK / Russia / South America Caribbean / Mongolia 16,600,000 20,220,000 28,850,000 31,000,000 34,000,000 2002 2003 2004 2005 2006 Japan / ASEAN 10,472,600 2000 Australia / New Zealand 9,232,400 1999 8,425,600 1998 5,323,900 1997 5,060,000 1996 Hong Kong/Macau 4,520,000 1995 Approved Destination Status DEPARTURES YEAR

Statistical overview Chinese Outbound Travel Destinations (2005) Zhang Qing/Byecity.com 2006 : 34 million outbound travellers Market Value : 17 Billion Dollars 2007 projected: Over 37.4 million

Chinese Outbound

Travel Destinations

(2005)

The nature of the Chinese outbound traveller Middle and high income city dwellers White collar annual income: USD $25k on average Established pattern of business trips combined with leisure holidays Increased awareness of luxury destinations Desire to ‘outclass’ others Prefer convenience and access to range of activities 一

Middle and high income city dwellers

White collar annual income: USD $25k on average

Established pattern of business trips combined with leisure holidays

Increased awareness of luxury destinations

Desire to ‘outclass’ others

Prefer convenience and access to range of activities

Group package versus Independent travel Chinese prefer group travel Familiarity Culture better (perceived) value Habit of past experience 上

Chinese prefer group travel

Familiarity

Culture

better (perceived) value

Habit of past experience

Group package versus Independent travel A shift to Independent travel Negative experience Growing affluence Status symbol Better access to information Self confidence Changing attitudes and lifestyle 下

A shift to Independent travel

Negative experience

Growing affluence

Status symbol

Better access to information

Self confidence

Changing attitudes and lifestyle

Business or Leisure? Business Paid by company/bureau Predominantly company of male colleagues Convenience and time Concentrated shopping Appreciate flexibility and attention to time management Leisure Self financed Small groups of friends or family members More flexibility and interest in attractions Allocate more time for shopping. Most high spending still driven by business and delegations

Business

Paid by company/bureau

Predominantly company of male colleagues

Convenience and time

Concentrated shopping

Appreciate flexibility and attention to time management

Leisure

Self financed

Small groups of friends or family members

More flexibility and interest in attractions

Allocate more time for shopping.

Satisfying a Chinese client Attention to personal details Understanding of cultural sensitivities Knowing your Hans from your Hui Knowing of regional differences Being flexible - adaptable to changes in plan Chinese language information Exceeding expectations

Attention to personal details

Understanding of cultural sensitivities

Knowing your Hans from your Hui

Knowing of regional differences

Being flexible - adaptable to changes in plan

Chinese language information

Exceeding expectations

Market entry steps Review and audit your services Adjust and prepare suitable products Localise your information Launch and promote through the trade Build relationships over time Follow through on promises

Review and audit your services

Adjust and prepare suitable products

Localise your information

Launch and promote through the trade

Build relationships over time

Follow through on promises

Chinese Inbound and domestic Travel

Overview of China’s inbound tourism Has been growing at 19.9% a year on average since 1990. Will receive 129 million inbound visitors from overseas in 2007, five million more than 2006. 22 million visitors in 2006 excluding Taiwan, HKG, Macau. Tourism boosted by world class events (2008 Beijing Olympics, 2010 World Expo, Formula 1 racing, Tennis, Summer Davos)

Has been growing at 19.9% a year on average since 1990.

Will receive 129 million inbound visitors from overseas in 2007, five million more than 2006.

22 million visitors in 2006 excluding Taiwan, HKG, Macau.

Tourism boosted by world class events (2008 Beijing Olympics, 2010 World Expo, Formula 1 racing, Tennis, Summer Davos)

Photograph by very kind permission of Mr Li, Cultural Heritage Management Officer, Matisi Scenic Area Administration Office Foothills of the Qilianshan, western Gansu

Overview of China’s domestic tourism China has 12,930 star-rated hotels International hotel chains are expanding fast in China Domestic tourists are projected to take 1.5 billion trips across the country, up eight percent in 2007. Spend US $250 billion on developing its railway network by 2020. $17.4 billion between 2006 and 2010 for airport development.

China has 12,930 star-rated hotels

International hotel chains are expanding fast in China

Domestic tourists are projected to take 1.5 billion trips across the country, up eight percent in 2007.

Spend US $250 billion on developing its railway network by 2020.

$17.4 billion between 2006 and 2010 for airport development.

Influences on inbound tourism Leading up to 2008 Beijing Olympics and 2010 Shanghai World Expo, China will receive unprecedented media attention – double edged sword The 2008 Beijing Olympics will show more faces of China to an international public previously not aware of China's tourism resources. China will become a popular destination for incentives, conference, meetings, sports and business. 2010 World Expo in Shanghai will attract large numbers of short-haul visitors from Asia and enhance China's image internationally.

Leading up to 2008 Beijing Olympics and 2010 Shanghai World Expo, China will receive unprecedented media attention – double edged sword

The 2008 Beijing Olympics will show more faces of China to an international public previously not aware of China's tourism resources.

China will become a popular destination for incentives, conference, meetings, sports and business.

2010 World Expo in Shanghai will attract large numbers of short-haul visitors from Asia and enhance China's image internationally.

Differences in tourist behaviour Chinese domestic tourist market is different: Prefer to spend time in crowded places with large groups Seek comfort and convenience above exotic experiences Less educated about the impact of tourism on destinations

Chinese domestic tourist market is different:

Prefer to spend time in crowded places with large groups

Seek comfort and convenience above exotic experiences

Less educated about the impact of tourism on destinations

Thanks to Silk Road hotels

Examples of tourism culture differences

Future Trends for China South East Asia will grow as a market for luxury travel and short breaks golf, sailing, gaming, shopping (short excursions) Europe will become fashionable as a cultural attraction USA/Canada will become most popular destination when visa restrictions are eased. China will become the world’s number one inbound tourist destination by 2014 according to UN-WTO. http://www.cnto.org/chinastats.asp#Stats

South East Asia will grow as a market for luxury travel and short breaks

golf, sailing, gaming, shopping (short excursions)

Europe will become fashionable as a cultural attraction

USA/Canada will become most popular destination when visa restrictions are eased.

China will become the world’s number one inbound tourist destination by 2014 according to UN-WTO.

http://www.cnto.org/chinastats.asp#Stats

China Travel Industry blog Total amount debited from card (UK Pounds ) £1,041.20 £1,041.20 Payment for flights booked with British Airways will appear as a separate item on your statement as British Airways PLC. Visa Delta/Debit , Payment card used **** **** **** 9865 Payment Summary 2 piece(s) Baggage allowance Premier Economy BA0038 British Airways Heathrow (London) United Kingdom Beijing China 15:10 23 Jun 11:25 23 Jun 2 piece(s) Baggage allowance Premier Economy BA0169 British Airways Pu Dong (Shanghai) China Heathrow (London) United Kingdom 07:59 17 Jun 3:55 16 Jun Total amount debited from card (UK Pounds ) £1,041.20 £1,041.20 Payment for flights booked with British Airways will appear as a separate item on your statement as British Airways PLC. Visa Delta/Debit , Payment card used **** **** **** 9865 Payment Summary 2 piece(s) Baggage allowance Premier Economy BA0038 British Airways Heathrow (London) United Kingdom Beijing China 15:10 23 Jun 11:25 23 Jun 2 piece(s) Baggage allowance Premier Economy BA0169 British Airways Pu Dong (Shanghai) China Heathrow (London) United Kingdom 07:59 17 Jun 3:55 16 Jun

14 November 2007, World Travel Market, Excel, London The only international event outside of China designed to unlock the mystery of doing business with China’s tourism sector. Full day of forums and interactive workshops for effective communication, sales and marketing methods and understanding how to navigate the market. Forum on China’s tourism industry

The only international event outside of China designed to unlock the mystery of doing business with China’s tourism sector.

Full day of forums and interactive workshops for effective communication, sales and marketing methods and understanding how to navigate the market.

The China Outbound Travel Handbook “ an excellent introduction to an amazingly complex market... relevant to every sector of the tourism business... contains lots of tips and practical advice for suppliers and is written in a down-to-earth style, with a minimum of meaningless statistics...” BBT Online, Belgium

Contact Us: Roy Graff London, UK Email: info@ccontact.com Tel: +44 20 78719886 Mobile: +44 7821 093199 www.chinacontact.org http://chinacontacttourism.ning.com/ Consultancy service: market access, marketing strategy, public relations, deal brokering Localisation: tourism marketing materials, websites, press releases Event management: exhibitions, product launches, trade fairs, business trips Representation: local sales and marketing representatives North America: New York Email: usa@ccontact.com South East Asia: Singapore Email: [email_address]

Consultancy service:

market access, marketing strategy, public relations, deal brokering

Localisation:

tourism marketing materials, websites, press releases

Event management:

exhibitions, product launches, trade fairs, business trips

Representation:

local sales and marketing representatives