China Outbound Tourism Research Institute Prof. Dr. Wolfgang Georg Arlt COTRI China Outbound Tourism Research Institute, Heide / Beijing El turismo chino: deseos, evolución y potencialidades Chinese Outbound Tourism - demand, evolution and potentials of a growing market in a Post-Western world Sevilla June 3, 2011

Powered by China Outbound Tourism Research Institute COTRI China Outbound Tourism Research Institute is the worldwide leading independent research institute for analysis, consulting and quality assessment relating to the Chinese Outbound Tourism market. Headquarter in Heide/Germany, China office in Beijing Director: Prof. Dr. Wolfgang Georg Arlt FRGS Active in P.R. of China since 1978 Former owner of Inbound Tour Operator China->Europe COTRI founder and director since 2004 Professor at West Coast University of Applied Sciences

China Outbound Tourism Research Institute Demand – China’s Outbound tourism: current situation Evolution – China’s Outbound tourism: background Potentials – Spain as a destination for the Chinese outbound source market

China Outbound Tourism Research Institute Demand – China’s Outbound tourism: current situation Evolution – China’s Outbound tourism: background Potentials – Spain as a destination for the Chinese outbound source market

China Outbound Tourism Research Institute

2010: 48 billion US$

Powered by China Outbound Tourism Research Institute 2010: 57 Millions Outbound trips China again No. 1 source market in Asia even if not counting trips to Hong Kong / Macao Outbound expenditure higher than income from Inbound-Tourism

China Outbound Tourism Research Institute 2000: Global market share 1.5% 2010: Global market share 5.8% (est.) 2000: One out of 67 international travelers from China 2010: One out of 17 international travelers from China

Powered by China Outbound Tourism Research Institute Share of Chinese outbound travels during three quinquenniums (Source: CNTA / COTRI, no reliable data available before 1995) More than 60% of all trips with the five years Most Chinese are still first-time international traveller

Powered by China Outbound Tourism Research Institute CNTA China National Tourism Administration Prediction for 2015 (Source: CNTA May 2010) : 100 million Chinese Outbound travelers spending 100 billion US$ outside Mainland China  Global Tourism Outbound Source Market No. 1 in 201x:

China Outbound Tourism Research Institute China’s Outbound Tourism 2011: Quantitative Growth, also qualitative development: Growing support by Chinese government for outbound tourism Easier access to passports, visa, hard currency Steps towards the liberalisation of involvement of international tour operators in the Chinese outbound market Growing interest for new destinations and forms of travel

China Outbound Tourism Research Institute Chinese outbound travelers will continue to populate the main tourism destinations but they have increasingly higher expectations of being treated according to their preferences.

China Outbound Tourism Research Institute Demand – China’s Outbound tourism: current situation Evolution – China’s Outbound tourism: background Potentials – Spain as a destination for the Chinese outbound source market

China Outbound Tourism Research Institute “All the ripping down of the old and throwing up of the new across China today cannot be explained as a matter of economic necessity alone. It is too frantic to be considered so simply. The visible Chinese project is, among much else, a signifier of an almost compulsive psychological urge to self- reinvent – to make ‘being Chinese’ mean something new.” (Patrick Smith: Somebody Else’s Century, 2010:23)

China Outbound Tourism Research Institute After three decades of unprecedented economic growth combined with the replacement of socialist and internationalistic ideas with consumerist nihilism and nationalism, the Chinese society in 2011 is at the cross-roads in it’s development: Internally the way of modernization without modernity has run its course Externally the Deng Xiaoping policy of "keep a low profile and never take the lead” ( 稻光养晦, taoguang yanghui) is no longer applicable

China Outbound Tourism Research Institute Some commentators compare China today with Japan 1989, some with Japan Patrick Smith likens China today – mentally, not economically – to Meiji Japan in the 1880s, trying to modernize while inventing a fake past as an identity anchor. What does that mean for tourism? 8 m high Confucius statue in front of Chinese Museum of History, Tiananmen Square, Beijing, unveiled in January 2011, removed again in April 2011

China Outbound Tourism Research Institute Chinese outbound trips within the Confucian world done for reasons like: Business trips Visiting Friends and Relatives Relaxation Shopping / Trading Overseeing OFDI companies but also for Showing off towards the neighbors

China Outbound Tourism Research Institute Chinese outbound trips outside the Confucian world used additionally for other reasons: Gaining prestige back home Radiating Soft Power in the destination Learning how to behave as a rich person

China Outbound Tourism Research Institute Gaining prestige back home International travel is still giving major bragging potential – which is not vanity, but necessary for securing a place among the Big Boys in a society based on status and connections

China Outbound Tourism Research Institute Radiating Soft Power in the destination International travel has been discovered by the Chinese government as a Soft Power tool to show off to the world the economic might of China

China Outbound Tourism Research Institute Learning how to behave as a rich person China is the home of 1.1 million households with more than 1 million US$ in cash and stocks (in 2010, up from 650,000 in 2009 – plus 67%), representing 2/1000 of the total. (Germany: 370,000, representing 5/1000) Almost all of them are first-generation rich (average age of millionaire in China: 36 years) using international luxury tourism as a training ground to learn how to behave as a (super-)rich person

China Outbound Tourism Research Institute Demand – China’s Outbound tourism: current situation Evolution – China’s Outbound tourism: background Potentials – Spain as a destination for the Chinese outbound source market

China Outbound Tourism Research Institute The Chinese tourism market is segmenting: Mass market: Still “Race to the bottom” Low price – bad quality package tours Upper end: “New tourists” Sophisticated customers looking for sophisticated offers – but still being Chinese travelers.

China Outbound Tourism Research Institute Every country, destination and tourism service provider has to work it’s way through the “Acculturation Curve” (after Hofstede 1994) Euphoria IgnoranceAdaptation Despair Most major European players have arrived at the “Adaptation” end in Chinese inbound tourism. Spain as a late starter is getting closer to the “Euphoria” point.

China Outbound Tourism Research Institute The late start provides a chance for Spain to avoid the mistakes suffered by early movers in the field. However, to be able to learn it is necessary to understand that not the Chinese outbound tourism has just now started, but that it has only now got into the focus of many stakeholders in Spain. The Chinese outbound travelers are already since a decade in the middle of a process of learning, sophistication and segmentation.

China Outbound Tourism Research Institute It is necessary to acquire meaningful data: “60% of Chinese outbound travelers are between 30 and 50 years old” will not help to develop a customized offer: A Chinese person born in 1980 grew up in a world of uninterrupted economic growth A Chinese person born in 1960 grew up in the Cultural Revolution Beware of averages - On average there are two cars per km² in China. Still traffic jams in the big cities are remarkable. We are dealing not with the Chinese, but with the top 10% of society

China Outbound Tourism Research Institute It is necessary to know what you are selling: It is easy to get a fake FC Barcelona shirt for a few dollars on every Chinese street corner – still FCB sells lots of expensive original shirts in China There are enough sightseeing and leisure offers available inside China to last for a lifetime – still international travel is the wish of every upward mobile person in China The name of the product is PRESTIGE, STATUS, BRAGGING POWER and sometimes money laundering…

China Outbound Tourism Research Institute It is necessary to provide adequate training for service providers and to use adequate communication channels: The message Chinese guests are is much more convincing when spoken in Chinese by the receptionist, museum guide etc. and the products are customized according to the Chinese criteria of quality.

China Outbound Tourism Research Institute Spain is such a wonderful country not only for Europeans – let us share it with the rest of the world, including China!

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