1. The Chinese Outbound Tourism Market: a global perspective
COTRI China Outbound Tourism Research Institute
Prof. Dr. Wolfgang Georg Arlt
London, March 26, 2014

2. Who is talking to you?

3. COTRI China Outbound Tourism Research Institute
The world's leading independent research institute for information, training, quality assessment, research and consulting relating to the Chinese outbound tourism market
Established: 2004
Offices: Heide (Germany), Beijing, Shanghai, Guangzhou (China)
COTRI Country Partner in: Argentina, Australia, Bhutan, Bosnia and Herzegovina, Cambodia, Chile, Croatia, England, Estonia, Finland, France, Ireland, Italy, Kenya, Kosovo, Laos, Latvia, Lithuania, Macedonia, Mauritius, Mexico, Montenegro, Morocco, Myanmar, New Zealand, Peru, Russia, Scotland, Serbia, Slovenia, Spain, Thailand, Tunisia, USA, Vietnam, Wales
COTRI Germany Headquarter:
Fritz-Thiedemann-Ring 20
25746 Heide / Germany
Phone
Fax
COTRI China Headquarter:
Suite 412 Lido Office Tower
6 Jiangtai Road
Beijing Phone
COTRI Office Shanghai:
Suite 1512 Shui On Plaza
333 Huaihai Rd.
Shanghai
COTRI Office Guangzhou:
Suite 2412 South Tower WTC
Huanshi East Rd.
Guangzhou

4. COTRI founder and director
Prof. Dr. Wolfgang Georg Arlt FRGS
First visit to People’s Republic of China in 1978
owner of Inbound Tour Operator China -> Europe (offices in Beijing and Berlin)
COTRI founder and director since 2004
Professor for International Tourism Management
at West Coast University of Applied Sciences (Heide)
Visiting Professor at universities in China and United Kingdom
Fellow Royal Geographical Society (London)
Research Fellow Japanese Society for the Promotion of Science (Tokyo)
Latest publication:
Editor of
Zhang Guangrui: China’s Tourism Development COTRI eBook 2013
COTRI Blog at Forbes.com:
Editor:
China Outbound Market
Intelligence

5. COTRI Country Partners

6. Why are we all here today?

7. CHINA – INTERNATIONAL TOURISM SOURCE MARKET NO. 1 IN THE WORLD
IN TERMS OF BORDER-CROSSINGS

8. CHINA – INTERNATIONAL TOURISM SOURCE MARKET NO. 1 IN THE WORLD
IN TERMS OF SPENDING

11. The big picture

12. 1 History
Travel has been an important part of the (self-)education process in Imperial China, but outbound travel has no tradition
Xu Xiake ( ), China’s most famous traveller, was no Ibn Battuta or Marco Polo
Chinese are still learning to be an international tourist, lack of role models

13. 2 Demand Demand pushing open the gates
After 1989 (Tiananmen movement and Fall of Berlin Wall) resisting the demand for outbound tourism (politically dangerous and expensive) is no longer feasible
Since 2004 incremental paradigm change toward “Soft Power” approach of using outbound tourism
2013 new party leadership curbing official pleasure travels and conspicuous consumption, but for the first time officially “encouraging” outbound tourism

14. 3 Investment
Chinese Outbound Travel will continue to grow despite bursting of credit bubble in China (Chinese GDP +2% and deflation in 2015?)
Long-distance outbound travel for Top 5 percent of Chinese society is investment, not holiday
Direct investment : Business travel, real estate and company investment for profit and for passports
Indirect investment : “Leisure” travel for self-esteem and peer group confirmation of status and prestige
Long-term investment : Formal and informal education, market knowledge, experiences

15. 4 ROI Chinese outbound traveller seek Return on Investment
If international travel is investment, the products offered should be organised in a way to guarantee the Chinese visitor a good Return on Investment (ROI):
Value for money and for time
Guaranteed quality as seen from a Chinese point of view
No more time spent as needed for prestige gain
Supporting the specific bragging value of a product: famous, typical, oldest/highest/awarded, celebrities choice, unusual (but not unknown), authentic (but not against expectation), hard to get, VIP only, as seen in TV and movies
Connecting fun und investment
Giving face to China and all Chinese
Safe and without risk

16. 5 Segmentation
“The” Chinese outbound tourists does not exist (anymore).
The four most important groups:
Mass-market package tour participants, often first-time traveller, from second/third tier cities, interested in cheap trips, sightseeing and shopping for prestige
More affluent and more experienced self-organised travellers, interested in value for money, intensive short experiences and shopping for lifestyle affirmation, “money-rich but time-poor”
Business/official travellers, interested in luxury and conspicuous consumption (when nobody watches)
Chinese temporarily living outside of China (Chinese expats, students), travelling themselves and receiving guests

17. 6 Package Self
Chinese traveller continue to embrace self-organised travel
According to COTRI research, almost all adult affluent Chinese have been outside Mainland China at least once, 90% of all adult affluent Chinese have already visited Europe
Each year more travel experience, higher percentage of overseas university graduates, and more information available combined with new Chinese tourism law pushes affluent Chinese to travel self-organised
With the domino effect of easing of visa restrictions well under way in 2014, need to use tour operator for visa diminishes

18. 7 Future A history of waves:
100 million aspiring Chinese living in 2nd and lower tier city inhabitants are still waiting for their turn to see the Mona Lisa and to visit European brand stores with package groups for as little cost as possible
50 million more experienced travellers moving from ticking off sights and from buying the most famous brands to finding destinations, travel styles, hotels and products which fit the lifestyle of their specific peer group

19. Time to learn more about your Chinese customers.
8 Action
Getting happy and profitable Chinese customers
Concentrating as much on direct bookings and direct (social media) marketing as on working with Chinese tour operators
Providing prestige by using Chinese language, symbols, decoration, quality labels, credit card services – but in an unobstrusive way
Providing services for money-rich but time-poor guests – no waiting!
Turning the attraction/hotel/sight into a destination with a story – something to tell at home about
Anticipating the needs of Chinese visitors – Chinese photographer for honeymoon couples, exclusive limited edition souvenirs which can only be bought on the spot or in O20 (offline to online) shops
Time to learn more about your Chinese customers.

21. Have Fun and Profit in the Wood Horse Year! Contact
Thank you for your attention, looking forward to your comments and questions!
Have Fun and Profit in the
Wood Horse Year!
Contact
COTRI China Outbound Tourism Research Institute
Prof. Dr. Wolfgang Georg Arlt
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Thank You!