Chinese tourists spent $102 billion on foreign trips in 2012

Chinese tourists spent $102 billion on foreign trips last year, outstripping deep-pocketed travelers from Germany and the United States.
Chinese tourists spent 41 percent more on foreign travel in 2012 than the year before, beating the close to $84 billion both German and U.S. travelers parted with last year.
Tourists from other fast-growing economies with swelling middle classes, like Russia and Brazil, also increased spending in 2012. In recession-hit Europe, however, French and Italian tourists reined in their holiday budgets.
“The impressive growth of tourism expenditure from China and Russia reflects the entry into the tourism market of a growing middle class from these countries,” said UNWTO Secretary-General Taleb Rifai.
The German Travel Association (DRV) said it was to be expected that the Chinese would eventually overtake Germans in terms of spending, given that the country had more inhabitants than North America, Russia and Europe put together.
“But that they have overtaken us already is astonishing,” DRV president Juergen Buechy said.
The Chinese make more long-haul trips than Germans, who typically go to Mediterranean destinations, meaning that the average spend per holiday was greater, he added.
“This all new generation of  young & affluent Chinese travelers is much more sophisticated than their parents. They prefer to travel independently rather than in group tours, and take the time to choose carefully their hotel and shopping program well in advance” said Pierre Gervois, CEO & Publisher of the Shanghai Travelers’ Club magazine, a travel magazine for very affluent Chinese outbound tourists.
China is the world’s fastest growing tourist source market, thanks to higher disposable incomes in the world’s number two economy and looser foreign travel restrictions. Chinese tourists made 83 million foreign trips in 2012, compared to 10 million in 2000.
Hoteliers, tour companies, restaurants and even taxi drivers will need to brush up on their knowledge of Chinese cuisine, culture and language if they are to tempt them away from favorite destinations like Hong Kong, Taiwan and the Maldives, European tourism officials have said.
Other countries in the top 10 including Japan and Australia posted growth in travel spending, though only Russia came close to China’s huge growth, with a 32 percent increase in holiday budgets.
Russians are now the fifth highest-spending tourists, parting with $43 billion last year, according to the Madrid-based UNWTO, and catching up on the British, who spent $52 billion in 2012.
Italian spending dipped by 1 percent to $26 billion in 2012 and French tourists parted with $38 billion, a 6 percent drop year-on-year. The two euro zone peers were the only countries in the top 10 outbound markets to post declines.

Old stereotypes don’t work anymore for Chinese tourists in Europe

Europe enjoyed a good performance of its tourism industry in 2012 as total arrivals grew by 3.5% last year. “With 476 million international tourist arrivals, Europe is the world’s largest destination, representing a 50% market share worldwide. This share might slightly shrink due to the strong growth of arrivals to other continents-especially Asia. But we will still remain a dominant force in the years to come”, explained at an ITB Press Conference Eduardo Santander, Executive Director of the European Travel Commission.

ETC comprises 33 National Tourism Organisations in Europe comprising most of the continent’s largest countries except France, the UK and the Netherlands which recently left the Commission. ETC has been attributed with a budget of one million euro to muscle its presence abroad, especially to overseas countries. Its website “visiteurope.com” was recently revamped and a new campaign done in partnership with the European Commission was also launched. “Ready for Europe” which showcases the wide variety of Europe through its arts, architecture, nature and landscapes might however miss its target – at least in Asia- due to its vagueness.

“We might have to adjust the campaign for some markets such as Asia where we still need to better understand what are the expectation in terms of product and image when talking about Europe”, admited Eduardo Santander.

ETC’s new strategic campaign towards long-haul markets will target in priority four markets: Canada, the USA, Brazil and China.

China has been identified as one of Europe’s fastest growing market segments. A study was recently released over the Chinese Outbound Market, made in conjunction with the UNWTO. ETC looked also at the Chinese profile. A netnographic study -“the Mind of the Chinese Traveller”- analyzed Europe’s perception as well as Chinese travellers’ behaviour through the prism of blogs and social media.

A China Day conference was also organized last November in Copenhagen while a similar conference will be organized at the end of October in Beijing. “We now need to recognize the specific status of Chinese travellers across Europe. It means that we should add more signs in Chinese in international areas, have more Europeans trained to speak mandarin, identify Chinese restaurants in cities as a majority of Chinese look only for their own food and develop specific products. We still have a long way to go,” recognized ETC Executive Director.

“The Chinese travelers coming to Europe today are very different than the first Chinese independent leisure tourists that came five years ago” said Pierre Gervois, Publisher of the prestigious Shanghai Travelers’ Club magazine, a publication for Chinese High Net Worth Travelers. Mr Gervois Added “The old stereotypes about Chinese tourists are no more valid: they now want to stay in the best suites of Paris and London most prestigious hotels, and don’t want to hear anymore about budget hotels!”

The ETC and Tripadvisor signed also during ITB a cooperation agreement paving the way to promoting Europe around the world.

In 2013, Let’s re-think marketing to affluent Chinese outbound tourists

I want to thank you all for your active participation in our discussions and exchanges on this blog about how welcome better Chinese travelers. You’ll notice that I don’t say “Tourists”. I prefer to use the term “Travelers” as I think it better descibes the level of maturity and sophistication reached by Chinese outbound travelers. The time of cheap “Group tours” is now over for Chinese travelers:It’s time for hospitality and travel industries in the United States, Europe and Asia-pacific to re-think the way they are promoting their hotels and destination management companies’ services in China. More focus on quality and genuine VIP welcome, less focus on discounts and entry-level services. The 2013 Chinese traveler now wants the exact same level of service that European and American travelers. It’s time for all of us to understand this and act accordingly for the marketing and Public Relations campaigns intended for a Chinese audience: Better contents, better design, more interaction on Chinese outbound travel social media networks and a more accurate advertisement strategy with specialized Chinese luxury travel magazines. Four pounds glossy paper Chinese luxury lifestyle magazines are perfect to promote watches and jewelry brands in China, but are not very effective to promote outbound travel destinations. The new generation of digital Chinese luxury outbound travel magazines are far more effective to reach the specific audience of affluent Chinese outbound travelers. We’ll talk a lot about these new exciting magazines in 2013!

Have a great 2013 year with more Chinese guests.

Pierre Gervois

CEO

China Elite Focus Ltd.

Chinese Outbound Travel Agencies promote “quality travel” to Korea

The stereotypical image of Chinese tourists abroad is of large tour groups following a guide with a red flag through sightseeing spots and shopping malls.
But all that could be about to change, as the country’s leading travel agencies attempt to replace traditional tour packages with high-end experiences.
China Travel Service, a big player in the travel industry,  has announced it will cooperate with vacation resorts in South Korea to provide packages that appeal to well-off families, eco-golfers and winter sports enthusiasts.
“Getting in and out of a tour bus at tourist spots and being in a rush is no longer working with outbound tourists,” said Zhang Ping, president of CTS. “We have to move upstream in quality and create tourism products tailored to the demands of individuals and that give people more freedom for unique experiences.”
The company says its cooperation with South Korea’s GB Networks, an agency that provides travel services to 14 resorts, will give Chinese tourists access to large-scale ski resorts, golf courses, water parks, hotels and convention centers.
Jin Chengxiu, director of the CTS’ branch in Seoul, said it was the first time a Chinese travel agency has attempted to tap into the South Korean resort market, which currently attracts a large number of Korean and international tourists, but few Chinese.
“Most resorts are in northern Gangwon Province, which has a smooth, sandy coastline and is known as the epicenter of winter sports in Korea,” he said. “Chinese tourists, especially those traveling with their families or for business conventions, can spend several days and nights in one place relaxing.”
The province is also the site of the 2018 Pyeongchang Winter Olympic Games, and authorities expect to draw 10,000 tourists from China each year in the lead-up to the event.
According to Zhang, Chinese tour agencies are making bold attempts to offer a variety of high-end tourism packages to cater for a booming market demand.
“Some remote but captivating destinations that were believed to be too expensive for Chinese tourists are becoming more popular,” said Zhang, adding that the agency has organized trips to Seychelles in the Indian Ocean with chartered flights this year. “Because the number of Chinese outbound tourists is increasing, the prices of hotels and airline tickets are getting lower, which can cut the price for outbound travel.
“Amid the economic downturn, people are more likely to spend money on tourism to relieve stress. The industry is now also promoted by the Chinese government as a way to stimulate consumption.”
According to the National Tourism Administration, 38 million Chinese tourists traveled overseas in the first half of this year, up 18 percent from the same period last year.
After Japan, China is South Korea’s second largest source of inbound tourists. A new visa policy will come into effect next month, loosening restrictions on Chinese tourists in a bid to promote tourism.

China Travel Retail’s inaugural event in Shanghai from the 24th – 25th July 2012

China Travel Retail (CTR), the most focused networking event for travel retail brands, concessionaires and retailers targeting Chinese travellers, unveils the lists of world-class speakers and companies that will be involved in its inaugural event taking place in Shanghai on 24th and 25th July, 2012.

Joining the Moodie Report Founder & Chairman Martin Moodie, who together with Deputy Publisher Dermot Davitt will moderate proceedings, will be a host of world renowned industry speakers and panelists.

“We are delighted to have so many well respected industry speakers and companies participating at CTR”, said Jeffrey O’Rourke, Chief Executive of Ink. “This world-class line up of speakers, the superb agenda and the number of Chinese airports and duty free operators already attending, is fast establishing CTR as a definitive date in the Travel Retail calendar. We are hoping that over the coming weeks we will be able to announce more high profile speakers, delegates and sponsors coming to shanghai in July to attend our event”.

The China Travel Retail event and exhibition, taking place at the prestigious Marriott City Centre in Shanghai, will showcase best practices both domestically inside China, at Chinese airports and airlines, at sea, as well as how companies are successfully selling to Chinese consumers travelling overseas.  The two-day schedule for this event will include a mix of keynote speeches and master classes.

“Affluent Chinese travellers are looking for a better quality of service during their duty free shopping experience, and a better selection of products. In particular, they are looking for limited edition watches, or rare premium spirits, and not only from well known brands, but from more exclusive brands”, said Pierre Gervois, Chief Executive Officer of China Elite Focus.

“We believe that there is a need for an event that does not just showcase existing best practise within Chinese travel retail, but also helps companies to network, develop relationships and establish a footprint in this ever increasingly influential market”, said Nick Tan, President of GIS Events. “At CTR we will be bringing together for the first time, the most important decision makers from the Airports, Airlines, Duty Free operators, brands and Concessionaires in china and looking to break into this market.”

New Zealand is targeting wealthy Chinese tourists

Auckland tourism chiefs and Auckland Airport will launch a new strategy to attract rich Chinese tourists.
Auckland Tourism, Events and Economic Development (ATEED) and the airport company say the strategy is based around targeting high yielding business and first-class passengers and selling premium experiences and accommodation on arrival in Auckland.
This will involve marketing direct to consumers through initiatives like partnering with airline frequent flyers and platinum credit card companies to promote tourism packages to wealthy customers and working with inbound tour operators.
Auckland Mayor Len Brown has announced a new marketing partnership with Guangzhou as part of the mayoral trade mission to five Chinese cities.
Up to 60 multimillionaire business people from the exclusive Shanghai Travelers’ Club were hosted at a function on April 19th in the city by ATEED, Auckland Airport, Air New Zealand and SkyCity.
China has more than a million millionaires, the number of which grew at more than 30 per cent last year.
Last year there were 134,444 Chinese arrivals into Auckland out of 145,524 Chinese arrivals to New Zealand. There was a total of 2.6 million tourists last year.
ATEED manager tourism Jason Hill said Auckland was investing strongly in attracting more high-yield Chinese visitors to Auckland.
“It is vital we work as an industry to maximise the potential of this fast-growing visitor market. This China delegation and luxury marketing fund will bode well for raising awareness of Auckland’s premium tourism offering and mix of sophisticated urban and natural experiences,” said Hill.
According to Pierre Gervois, CEO of China Elite Focus, the marketing agency who created the campaign “Luxury New Zealand” on behalf of Auckland Airport, “New Zealand has an enormous potential with wealthy Chinese travelers. Auckland’s Airport strategy to increase the number of premium Chinese passengers is the right strategy for New Zealand”. The official website of this campaign www.xindaohualv.com is the leading luxury travel website promoting New Zealand, exclusively in Chinese language.
Auckland’s China trade mission coincides with an announcement this week by the Ministry of Transport of a new air services arrangement with China that triples the amount of passenger flights that may be operated between the two countries.
Auckland Airport chief executive Simon Moutter said the initiative was part of Auckland Airport’s programme to develop premium travel markets.
“We are absolutely committed to capturing the lucrative Chinese travel market. It is important we jointly, as an industry, grab the opportunity to develop New Zealand as a premium brand to that market.”
Chinese tourists now spent on average $300 a night, more than European, North American and other Asian tourists.
Chinese holidays in New Zealand had now grown to an average of 6.1 nights per visitor.
“We expect this to grow as the Chinese become more confident travellers,” said Moutter.

Will cuts on luxury goods taxes in China prevent Chinese from buying abroad?

Last year Chinese tourists bought almost two-thirds of luxury goods sold in Europe as they went on a record spending-spree. But while mainlanders are happy to splurge on foreign soil, what their government needs is for them to open the purse strings at home. Domestic consumption has shrunk to just 36% of gross domestic product and is increasingly the weak link in China’s growth.
One step to redress this spending imbalance is to cut penal mainland taxes on consumption and luxury goods. Analysts say such a move now looks likely.
This could have far-reaching consequences for one of the biggest investment stories of recent years — outbound spending by mainland tourists.
Everyone from retailers in Hong Kong, to London or Seoul could feel the fallout, while foreign luxury brands seeking to expand in China should be buoyed by any duty cut.
Expectations that a move is imminent were fuelled by widely reported comments earlier this month by former deputy commerce minister Wei Jianguo, to expect at least two rounds of reductions on import taxes on consumer and luxury goods. Then, this past weekend Finance Minister Xie Xuren promised to improve China’s consumption tax.
Among the spending habits likely to catch authorities attention say Credit Suisse is the revelation that Chinese residents spent 300 billion yuan ($47.4 billion) overseas on their bank cards in 2011, up 66.7% on a year earlier, according to data from China UnionPay.
And as well as accounting for 62% of all luxury consumer sales in Europe last year, mainland shoppers spent a whopping $7.2 billion during the recent Lunar Year holiday, up 28.6% on the previous year according to the World Luxury Association.
If you look at existing tax rates in China, it is easy to see why shopping overseas is so popular.
Import duties on general luxury products range from 10%-25%, and can be as high as 35%-60% on luxury cosmetic products and alcohol. Add on value-added tax (17%) and a consumption tax depending on the merchandise and prices on the mainland are penal. According to a survey by the Chinese Ministry of Commerce, prices for luxury goods in China are 45% higher than in Hong Kong, 51% higher than the U.S. and 72% higher than France.
If these taxes were designed to promote social fairness and curb bourgeoisie shopping habits by targeting rich consumers, they appear to be missing the mark — luxury spending at home is just being diverted overseas by globe trotting mainlanders.
Another reason to expect action on taxes is the government’s recent focus on boosting growth through domestic consumption. This past weekend in Beijing Vice Premier Li Keqiang said expanding domestic demand is a “strategic point” for economic development. Another official played up China’s readiness to import, predicting it may soon become the world’s largest importer.
This eagerness to import, however, comes at a time when China just recorded a monthly trade deficit in February of $31.5 billion. With export growth expected to remain relatively weak, this provides another reason for authorities to be less sanguine about yuan leaking abroad through unchecked tourist spending.
Meanwhile, it is also worth considering that for many mainlanders, shopping abroad is not just about getting a tax-free bargain.
China’s capital controls and limited domestic investment options mean luxury shopping often fulfills various secondary needs.
In Macau, for instance, purchasing luxury goods can be a handy way to access hard cash. A typical story is a mainlander shopper can buy an expensive handbag or watch on their credit card, which can then be sold back for something like 90% of the value in cash.
In fact, luxury handbags have almost become a money substitute. Milan Station Holdings Ltd. , a chain of shops that trades second-hand handbags even listed on the Hong Kong stock exchange last year, which gives you an idea how big this business is.
This, as well as a preference by many mainlanders to conceal conspicuous luxury shopping overseas, means old shopping habits could be hard to change.
If we do get a cut in luxury taxes, Credit Suisse, say luxury brands who import their goods into China will benefit such as Prada, Coach, Hugo Boss, LVMH or Tiffany.
The flip side, they add, is that for the retail and tourism industries that have benefitted from outbound Chinese tourists, any reduction in import tariffs will be incrementally negative.
But according to China Elite Focus, a Shanghai-based marketing and research firm specialized into reaching to affluent Chinese outbound tourists, these tax modifications will have small impact on the behavior of Chinese shoppers “Buying abroad luxury goods is first and foremost a sign of social status” said Pierre Gervois, China Elite Focus’ CEO. He added “ The fact that Chinese buyers will pay less their luxury goods if they buy in the U.S. or in Europe is a minor factor compared to the prestige of having bought a Tiffany diamond in New York City or a Louis Vuitton bag in Paris”
On the list of potential casualties is Hong Kong, Macau, South Korea to retailers in Europe. Hong Kong could be particularly vulnerable given 28 million mainland tourists visited last year (four times its population) and its huge concentration of luxury retail brands — Louis Vuitton has seven stores in the city, one more than Paris.

Source: The Wall Street Journal, Article by Craig Stephen

InterContinental Hotels targets Chinese travelers with a new hotel brand

InterContinental Hotels Group Plc (IHG), the world’s largest provider of hotel rooms, will begin opening locations as soon as next year under a new brand designed to appeal to Chinese travelers.
The Hualuxe brand of hotels will have teahouses instead of bars and feature other designs that target Chinese consumers, Chief Executive Officer Richard Solomons said in an interview. They’ll first open in China before expanding overseas targeting Chinese travelers, the company said.
InterContinental in the past was “based on bringing western brands into China,” Solomons said in Beijing. “What we have done is to, first time ever, create a brand that really talks to Chinese hospitality.”
Growing wealth and the construction of highways, rail lines and airports is boosting demand for hotels as more Chinese travel. One in four of the hotels in InterContinental’s pipeline is in China, Solomons said. The company’s operating profit in China, Hong Kong, Taiwan and Macau increased 24 percent last year to $67 million, according to its website.
The company has already signed 20 letters of intent to build Hualuxe brand hotels across China. InterContinental will manage the hotels built by the property developers that are its partners, Solomons said. Hualuxe hotels may be opened in 100 cities across China in the next 15-20 years, he said.
InterContinental’s sales in Greater China accounted for about 12 percent of its total revenue last year, Solomons said. This year, Greater China’s share of total revenue will be “a bit higher” than 12 percent, he said.

Watch the video on this link  http://youtu.be/E98PpvglVr4