Tomorrow's Guest: Chinese Tourists will be a Game Changer for a Destination Near You
By Katharine Le Quesne Senior Director, HoCoSo | April 28, 2019
China is the largest outbound tourism market in the world; in 2018, they took 162 million overseas trips – 13% more than in 2017, when the number of trips was over 50 million higher than the second largest market, Germany. Moreover, Chinese outbound volume has grown c. 17% per annum over the past two decades – the fastest rate of any country. (Outbound trips 12.8m in 2000, according to COTRI).
It has been extraordinary to document. Over the past four decades, GDP per capita has increased 21 times (World Bank GDP per capita 1980-2017, based on 2010 constant prices in US$). China has invested in technology, knowledge, commodities and infrastructure, transforming the country into a global economic powerhouse.
Over the same period, travel has been transformed in China. Prior to 1990, exit visas were only available to business travellers, government and students – not leisure tourists. Then, from the early 1990s, China began to reduce administrative barriers to travel, stimulating growth in tourism activity. Corporate business was still the primary segment, albeit most official groups included several days of leisure travel on their itinerary, according to Pansy Yi-Hardie, CEO of Chingland – a travel agency specialising in cross-border travel between China and the UK. The Chinese traveller has long been adept at "bleisure", it seems.
This new era in travel was driven (and controlled) by the introduction of "Approved Destination Status" (ADS), which enabled Government approved tour operators in China and the destination country to handle Chinese tourists. Independent travel was not permitted. ADS was granted to the EU in 2004, the US in 2008 and today, over 160 countries benefit from it. It remains a pre-requisite to handling outbound Chinese tourist groups.
Passport ownership accelerated from 1 million in 1999 to 55 million by 2014; and current estimates suggest 120 million were in circulation in 2018. Whilst this penetration rate is low at under 10% of the population (versus 42% in the US), industry observers expect it to rise further. Indeed, Jane Sun, the CEO of travel services titan Ctrip, estimates numbers could double in the next two years. Extrapolating Sun's prediction based on average trips per passport holder, outbound trips could tip 325 million in 2020.
Big numbers – but only possible with the airport infrastructure to support it, which the Chinese Central Government has duly delivered. Ninety new civil airports were built between 2000 and 2017; and in late 2018, it was reported that the Civil Aviation Administration of China (CAAC) is targeting 450 by 2036 – an increase of 216 airports. Whilst domestic demand will drive the majority of passenger movements, additional international routes – particularly direct flights – will underpin the transformation of existing and new destinations.