Written by Xiang Robert Li.
To say Chinese outbound tourism grows fast would be an understatement. Between 1994 and 2013, the number of outbound trips by Mainland Chinese citizens rose 16-fold from 6.1 million to 98.2 million. China is not only the world’s fastest growing source market (UNWTO, 2013), but now the largest source market in terms of both visitation amount and travel spending. In 2014 one in ten border crossings in international travel were made by Mainland Chinese, making China one of the most sought-after tourism markets.
After two decades’ continuous growth, Chinese outbound tourism shows no sign of slowing down, yet the market is clearly experiencing some fundamental changes. Fifteen years ago, when Chinese outbound tourists first caught foreign marketers’ attention, some industry veterans immediately noted their resemblance to Japanese tourists in the 1980s, when the fast growing Japanese outbound travel also drew worldwide attention. From the highly structured group tours, the low foreign language proficiency and limited interactions with locals, to the tendency to snap photos, the first groups of Chinese tourists behaved just like their Japanese counterparts, except that Chinese tourists are also famous for their fondness of Chinese food and shopping. On the other hand, the Approved Destination Status (ADS) agreements generally mandate Chinese tourists to visit foreign destinations in group package tours. Therefore, Chinese tourists’ destination choices have been largely determined by product availability (e.g., whether a destination country has obtained ADS) and tour operators’ business interests. This era, featuring “mass-tourism style” group tours and a partially supply-driven market, could be called Chinese outbound tourism 1.0.
An important, yet not well-understood fact about Chinese outbound tourists is that most of them are young, inexperienced customers unfamiliar with many travel/leisure products (e.g., cruise, all-inclusive resort), which Western tourists take for granted. In other words, many of them are not only first-time brand consumers (e.g., visiting a particular destination for the first time), but also rookie product users (e.g., travelling abroad for the first time in their life). This means their decision-making and consumption processes are full of challenges, because not only they themselves are inexperienced, few people around them can help either. Cultural and education reasons aside, some Chinese tourists simply do not know how to behave “properly” (by their hosts’ standards) when travelling overseas. At the extreme, some Chinese tourists’ “uncivilized behaviour” like spitting, speaking loudly, and showing a lack of respect to the host culture, has earned them and their country a bad reputation. Presumably, Chinese tourists must go through a “collective learning curve,” during which the initial anxiety and discomforts will steadily be replaced by sophistication and more predictable consumption patterns.
Thanks to technological developments, social media and globalization, this learning curve seems to be shorter than expected. Two important indicators of the sophistication of the Chinese market are the growing repeat travel rate (in terms of both revisiting specific destinations and travelling abroad multiple times) and higher penetration rate of independent travel. As for the former, the latest statistics show that over 60% of Chinese outbound tourists already have previous overseas travel experiences, and up to 70% of Hong Kong visitors and 50% of U.S. visitors from Mainland China are repeaters. As for the latter, independent outbound tourism, although still in its infancy, has been outpacing outbound travel in general with two-thirds of today’s Chinese outbound travellers preferring to travel independently. The increasing customer sophistication has led to a shift of preference for less structured, more diversified, flexible, and personalized travel products, a trend towards what could be termed “Chinese outbound tourism 2.0.”
Chinese outbound tourism 2.0 is not merely about a new wave of Chinese tourists; strategic adjustments on the supply side are also an integral part of this emerging phenomenon. Western tourism suppliers have been actively involved in China’s unprecedented market development, ranging from Mercedes-Benz kicking off its premium travel service brand (“Mercedes-Benz Travel”) in Shanghai, to InterContinental designing the Hualuxe brand specifically for Chinese consumers. Meanwhile, Chinese companies have also been increasingly proactive in capitalizing on the growth of Chinese outbound tourism and their own expertise in serving Chinese consumers. China’s Wanda Hotels & Resort recently launched three hotel brands of its own, and is building a 5-star hotel in London. In Oct. 2014, a Chinese insurance company acquired America’s most famous hotel, New York’s Waldorf Astoria. In a way, they are following Western hotels’ footprint a couple of decades ago, when Marriott and Hilton started building hotels in China to cater to Western guests.
Going forward, Chinese outbound tourism will likely continue drawing attention from scholars and practitioners around the world. It is exciting to observe one of the most spectacular phenomena in the modern tourism history unfold in front of us.
Professor Xiang (Robert) Li is based at Temple University’s School of Tourism and Hospitality Management. His research focuses mainly on destination marketing and tourist behavior, with special emphasis on international destination branding, customer loyalty, and tourism in Asia. This article is adapted from the Introduction of the book entitled “Chinese Outbound tourism 2.0” (Li, X. (2016). Chinese outbound tourism 2.0. Apple Academic Press/CRC Press- Taylor & Francis Group.) The author would like to acknowledge Apple Academic Press for their approval of using this content. Image credit: CC by wohnblogAt/Flickr.