How far can the Chinese tourism market go?
In Asia, Europe and the Americas, Chinese tourists have now become an ubiquitous presence. Their number has more than doubled in the last seven years, from 57.38 million in 2010 to 122 million in 2016, according to the its government's tourism administration.
Why outbound Chinese tourism is growing
Accordingly, spending by Chinese tourists abroad has increased. Various sources place their expenditures in 2016 at $261 billion. Today, China has become the world’s largest outbound tourism market in terms of volume and spending, surpassing the United States and European countries.
China’s phenomenal growth in international travel has been attributed to its booming economy, the massive expansion of its middle class, the government’s moves to lessen restrictions and simplify certain processes, and the easing of visa restrictions specifically for them in many countries. In the past decade, its average annual GDP growth has reached a high of 14.2% in 2007. (The ideal GDP growth to sustain a good economy is 2-3 percent.) China is now the second top economy after the US, with a nominal GDP of $11 trillion (the US’ nominal GDP is $18 trillion.) But in terms of purchasing power parity (PPP) China has overtaken the US and is expected to be the number one by 2050, as a study by Pricewaterhouse Cooper shows.
As a result of the country’s robust economy, millions of its people have been lifted from poverty to gain a middle-class status. Although more than half of its population of 1.388 billion are still in the low-income class, 31 percent now belong to the middle class, earning from $10 to $50 per day. That amount is more than enough to provide for the basic needs, leaving extra money for travelling.
Where Chinese tourists go
The top destinations for these new globetrotting Asian travellers shift periodically. Most first-time travellers visit Asian nations before venturing farther out west. Hong Kong, Thailand, Japan, Taiwan, Singapore, Vietnam and Malaysia remain the favourites while the United States, France and Germany are the most visited in the western world. In 2016, South Korea saw an increase of Chinese tourists while Europe experienced a decline in incoming travellers because of recent terrorist attacks.
The economy in places visited by these alien visitors has been enormously benefitted. Retail shops, luxury brands, restaurants, hotels, the transportation industry and entertainment stand to gain much from catering to them. In turn, many of these businesses are modifying their services to please their free-spending Chinese clients, earn their praise and goodwill and spread the word about them for future patronage.
The travelling Chinese are quite sensitive when on foreign land. They see discrimination and disrespect in simple acts from the non-Chinese, such as when they are told to queue the line or not to smoke in hotel rooms. They are also protective of their country’s history, and perception of alleged revisions in significant events like the Nanking Massacre can have a negative effect on business.
On the other hand, they are also typecast as lacking in manners, and are rude and uncouth. Cultural differences are not only apparent in their trips to the US and Europe; even their Asian neighbours have complained about them.
Can the Chinese tourism market go any farther?
The first half of 2016 saw a 7% drop in outbound Chinese tourists to Hong Kong, Macau and Taiwan. But elsewhere, it is still increasing, albeit not as much as in the previous years. Optimistic forecasts say that the outbound Chinese tourists will be twice as many as the 122 million in 2016. Goldman Sachs predicts that overseas spending by the tourists will reach $450 billion by 2025.
Millennials and senior citizens make up the bulk of the travellers. By 2020, 300 million millennials are predicted to avail of leisure tours to foreign countries. These young adults were born between 1980 to the 1990s, when the one-child policy was still in effect. Having no siblings to compete with for their parents’ and grandparents’ affection and money, they have the means to travel the world with no monetary restrictions.
The older population in China is increasing, too. Thanks to improved healthcare, they live longer and stay healthier into their 50s and 60s. Done with their parental responsibility to only one child, they are now enjoying a lifestyle that gives them time and enough cash for leisure travel.
China and the host countries should take advantage of the gains to be had from each other. The communist country’s government through its China National Tourism Administration (CNTA) recently published a guidebook educating its citizens on proper behaviour and social graces to observe when travelling abroad. Tour agencies booking Chinese travellers must also help in the education.
Countries receiving Chinese tourists are learning to recognise their cultural distinctiveness and respond accordingly by putting up signs in Chinese and teaching them the local ways and customs in a non-offensive manner.
If both parties are open to a change in mindset that leads to improved relationships, global economy will grow and an understanding of the differences in cultures will promote friendship that will bring about mutual benefits.
About Boris Dzhingarov
Boris Dzhingarov graduated UNWE with a major in marketing. He is the CEO of ESBO ltd brand mentioning agency. He writes for several online sites such as Tech.co, Semrush.com, Tweakyourbiz.com, Socialnomics.net. Boris is the founder of MonetaryLibrary.com and cryptoext.com.
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