OUTWARD AND UPWARD: China’s Travel Industry Looks to the Future 中国旅游业的光明前景
By Carrie Hadler
The face of travel in China has changed rapidly over the last twenty years.
As China’s oft-mentioned rising middle class continues to grow, the options for where their (or their employer’s) yuan goes also expands. In 2009, China’s tourism and travel industry revenue topped one hundred billion RMB for the first time —70 percent of which came from Chinese nationals. A significant portion of this travel is, of course, dedicated to family and Holidays. Over the last five years, more than 200 million Chinese traveled during the weeklong National Day, International Labor Day, and Spring Festival holidays— a significant jump to years prior.
Much of this growth has been facilitated by the Chinese government’s investment in the country’s transportation system. Urban infrastructure investment has constituted an average of 2.6% of China’s total GDP since 1994, and the rise of the car in China has also led to a more mobile population. The rate of air travel, especially, has skyrocketed while intense competition between domestic carriers keeps ticket prices relatively low. Currently in second place, Beijing’s airport is set to surpass the United States’ Atlanta airport as “world’s busiest” before the end of this year. This represents a huge jump in just two years. In 2011, Beijing was only 34th on that list.
The accessibility of travel has grown with Chinese incomes. Whereas most travel arrangements used to be made in person or by phone, through a travel agent or at the airline’s office with cash, today, people can easily book their trips online using credit cards. Encompassing search engines such as c-trip.com have made this increasingly easy, and also offer phone service to capture the more traditional traveler. Young people, especially, have been quick to embrace the ability to book plans online, though.
The factors that people consider when making their hotel plans, on the other hand, have remained relatively constant. “When I am looking at different hotels, I first consider whether it’s clean, then look at the service quality, luxury, and price,” said 25-year old Beijing resident and business owner Cheng Guo. “I like nice places and appreciate good service, but the price should be reasonable, too.” Domestic tourist sites often differ from the places international tourists tend to go, but there is significant overlap when it comes to the most historically significant or beautiful destinations—the Great Wall and Forbidden City remain perennially popular for both Chinese and foreigners, and help to keep Beijing at #1 on the list of China’s most popular travel destinations. The hustle-and-bustle of Shanghai puts it at #2 on the list of China’s most popular destinations in 2012, closely followed by Guangzhou, Chongqing, and Hangzhou. The rankings were based on six criteria: number of international visitors, number of domestic visitors, foreign currency exchange earnings, domestic tourism income, number of starred hotels, and the number of outstanding scenic spots.
Not all travelers opt for the cities, though. China’s beautiful natural sites are also gaining attention. Jiuzhaigou National Park, a UNESCO World Heritage Site, is drawing more and more people every year. The Huangguoshu waterfall, China’s largest waterfall, also draws many visitors each summer.
The latest trend in China is towards international travel. In 2011, Chinese made 70 million trips abroad — a more than 20% increase from the year before. As the Chinese government continues to approve more countries as a destination for their citizens and the number of people with expendable income continues to grow, these numbers will undoubtedly only climb higher. Europe, Dubai, the Philippines, and the Maldives have all been popular destinations with Chinese tourists in recent years, according to Eric Li, the manager for Macau Government Tourism Office. International destinations closer to home still lead the list, though — South Korea and Russia were two of the most visited foreign countries in 2011. Wang Xinjun, founder of Ivy Alliance Consulting, expects that the Chinese love for tropical islands will soon bring Guam to near the top of that list.
One recent trend in Chinese international travel has been a move away from tour groups. In the past, Chinese tended to stay with a large tour group for language and comfort reasons. With more and more people feeling comfortable going solo and confident in their language skills, the incidence of independent travel is expected to grow, and young Chinese may soon join the backpacking crowds in Europe, the United States, and Southeast Asia in greater numbers.
Some of the changes in Chinese travel have been brought about by a surge in overall economic growth and business-related travel. Robin Han, the Director of Sales for Radius Global Travel Solutions in China, said that he has seen a 10-15 percent growth in domestic companies’ travel budgets over the last few years, compared with just 7-10 percent growth for multinational corporations.
Aimin Yan, faculty director of the international management program at Boston University’s School of Management, said, “Face-to-face contact is very important for doing business in China. Trust is integral for a successful business transaction. Clients generally feel more comfortable if they see your eyes, facial expressions, and the level of respect with which you treat them. In-person meetings can be immensely important to the continued success of a business relationship.”
The World Travel & Tourism Council’s analysis of the Asia-Pacific region echoed these thoughts. Their assessment shows a sales conversion of 57 percent for in-person meetings in China with 38 percent of overall sales dependent on business travel and in-person meetings — compared with just 28 percent in the UK and 21 percent in the US. In China, the Internet has certainly risen, but face-to-face is still king in the business world.
As the Chinese travel and tourism market continues to mature, some truths will hold universal. Chinese travelers will continue to search out the best deals for their money at destinations that fit their interests and offer good value. As the ancient proverb says, “Walking ten thousand miles of the world is better than reading ten thousand scrolls.”