Trends and developments in Chinese outbound travel

China is one of the world’s largest economy of the world and has been growing at almost 10% every year. China their GDP has jumped to $4,9tn in 2009 compared to $147,3bn in 1978. This is all the result of the economic reforms that were initiated by Deng Xiaoping, a famous leader of China (1982-1987). (Graeme, 2010)

China's economy is rising

The rise of the Chinese economy has resulted in a rise in consumer spending and household income. China is household income is huge. According to Mckinsey China their household income is likely above $5 trillion a year. (Towson & Woetzel, 2015)
Although China their consumer spending share of GDP is down, this is largely due to household savings. (Guilford, 2015)
Nevertheless Chinese citizens now are able to not only buy the basics of life but also buy the luxury products they want. According to Mckinsey growth in the ‘luxury market spending’ is forecasted to exceed 7 percent by 2020.
Chinese outbound tourism is also booming. From April to June 2016 outbound border crossing made from Mainland China towards destinations beyond Greater China (China, Hong Kong, Macau and Taiwan) increased with 12,5% to 18 million, according to travel daily news. (Koumelis, 2016)
For our business case assignment it is necessary to have a clear indication of the Chinese trends and developments in Chinese outbound travel and the opportunities (and maybe threats) for the Netherlands

 Chinese trends and developments in Chinese outbound travel:

- They search new experiences:
There are three different types of Chinese travellers. The group traveller, the semi-independent traveller and the independent traveller.
The group traveller is a group of travellers aged 40 years old or older and travelling in groups every 2-3 years.  The semi-independent traveller group is a group of travellers between 25 and 35 years old. This group travels once in a year in a group or independently. The independent traveller group is a group who travels by themselves and aged between 20 and 25 years old. (China, 2016)

Chinese 'new' generation travellers

- A digitized consumer
There’s not only a boom in the digital era in the ‘Western world’ but China is going through the same trend. 620 million people use the internet in China and more than 80% have a mobile device. 53% of Chinese tourists travelling abroad use mobile apps to book their trips online and organize their vacation. (China, 2016)

- Social Media
The majority of China’s population (80%) is present on Social Medias. Weibo and WeChat are the most used tools to share photos, videos, brand experiences and memories. These social media platforms have a huge influence on Chinese population and their opinion. (China, 2016)

Social Media platforms

- Travelling destinations are changing
As stated above Chinese people are  turning their interest towards travelling outside of China. For example Thailand, Japan and South Korea are becoming  more and more very popular under Chinese tourists. But they are also  are traveling more and more to Europe and the Americas. (China, 2016)

- Chinese passport ownership
According to GoldmanSachs the passport ownership rate in China is 4%, much lower than compared to the United States with circa 35%. The number of Chinese citizens owning a passport will triple in the upcoming years. (GoldmanSachs Global Investment Research, 2015)

Opportunities (threats) for the Netherlands:

- Number of Chinese tourists

The amount of Chinese tourists that travel abroad currently accounts for 120 million people, which is 10% of the total population of 1.3 billion Chinese citizens. This will, according to GoldmanSachs, rise to 220 million people. (GoldmanSachs Global Investment Research, 2015)

- Overseas spending
Another big opportunity for the Dutch tourist market is the rise in overseas spending by Chinese tourists. Due to the rise of Chinese household spending Chinese tourist also spend more when they’re on vacation. This is also in relation with the habit of Chinese people to spend a lot of money on luxury goods. (GoldmanSachs Global Investment Research, 2015)

- China economic slowdown
One big economic threat for the Dutch (or European) tourist sector is the economic slowdown China is encountering right now. (GoldmanSachs Global Investment Research, 2015)

Chinese passport

- Visa requirements
Another important factor for establishing Chinese tourism in Europe are the visa requirements. Not every country is giving visa’s on arrival to Chinese tourists. This completely depends on the Chinese government’s willingness. This could also be seen as a threat. (GoldmanSachs Global Investment Research, 2015)

References

China, G. i. (2016, January 15). marketingtochina. Retrieved from www.marketingtochina.com: http://marketingtochina.com/top-5-trends-chinese-outbound-travel-market-2016/, September 8, 2016

GoldmanSachs Global Investment Research. (2015). The Chinese tourist boom. Tokyo: GoldmanSachs.

Graeme, W. (2010, August 8). Chinese economic boom has been 30 years in the making. Retrieved from The Guardian: https://www.theguardian.com/business/2010/aug/16/chinese-economic-boom

Guilford, G. (2015, July 22). China needs to get its people to spend and that's a lot harder than it sounds. Retrieved from Quartz: http://qz.com/460223/china-needs-to-get-its-people-to-spend-and-thats-a-lot-harder-than-it-sounds/

Koumelis, T. (2016, August 23). http://qz.com/460223/china-needs-to-get-its-people-to-spend-and-thats-a-lot-harder-than-it-sounds/. Retrieved from Travel daily news: htttp://www.traveldailynews.asia/news/article/62492/chinese-tourism-beyond-greater-china

Towson, J., & Woetzel, J. (2015, May 1). Why China’s consumers will continue to surprise the world. Retrieved from Mckinsey: http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/why-chinas-consumers-will-continue-to-surprise-the-world