Chinese: The new globe-trotters

Outbound Chinese travelers have grown at double-digit percentage rates since 2012. Thanks to relaxed visa restrictions, rising value of the renminbi and the advancement of mobile Internet, the boom in overseas travel is expected to increase further in the future.

Beijinger Zhang Haoran visited Jeju Island of South Korea in May and Bali Island of Indonesia in August and now he is planning for the upcoming Chinese New Year holiday in early February.

He is tempted by Acropolis in Athens and the Aegean Sea as well as the splendid white architecture in Santorini in Greece, but also the lunar-like landscapes in Kapadokya and balloon trips over the Capadoccian valley in Turkey.

"It's hard to make a decision. I may choose one this time and the other later next year," he adds.

Zhang is a part of the rapidly soaring group of Chinese who are traveling abroad more frequently and independently.

Since the turn of the century, there has been over an eightfold increase in the number of overseas trips made by Chinese travelers from 10 million who traveled to other countries in 2000.

In 2012, China became the top tourist source market in the world and the outbound Chinese travelers have grown at double-digit percentage rates ever since, according to the United Nations World Tourism Organization.

China's outbound tourists reached 107 million in 2014 and the number is expected to cross 120 million in 2015, up 16 percent over the previous year, according to the China Tourism Academy, a research institution under the China National Tourism Administration.

"Undoubtedly, 2015 will mark the fourth consecutive year of China as the world's top tourism source market," says Jiang Yiyi, director of the China Tourism Academy's International Tourism Development Institute.

Still, according to a Bank of America Merrill Lynch forecast, outbound Chinese travelers could number around 174 million by 2019, spending about $264 billion annually. That's roughly equivalent to the GDP of a developed country like Singapore.

Chinese overseas travelers make up a sizable group of consumers, acclaimed as the world's largest, most favorable spenders. Chinese spent $164.8 billion overseas in 2014-a fourfold increase over 2008, and about 88 percent was on shopping, reports the China Tourism Academy.

About 400,000 Chinese spent around $833.7 million in Japan during the last National Day Golden Week. They spent about $8.9 billion in Japan during the first nine months in 2015, up 165 percent year-on-year, Japanese media reported.

About four million Chinese arrived in Thailand in the first six months of 2015, a 110 percent increase over the same period in 2014, the country's tourism authority's data show. Spending surged 140 percent to $53.5 million.

But the biggest spending surprise came from Australia, where Chinese spent $5.6 billion in the 12 months to September 2015. The number is so huge that it even exceeds the spending by the British, Americans and Canadians combined.

VisitBritain, the official tourism board of the United Kingdom, expects Chinese travelers to be spending more than $1.47 billion a year in the country by 2020.

As more Chinese names make it onto the global rich list, luxury tourism packages are proving more popular.

A Hurun/International Luxury Travel Market Asia report released in May 2015 says half of all super-rich travelers flew business class in 2014, compared to one-third the previous year.

Chinese luxury travelers have grown more accustomed to good service and well-planned itineraries, said Steve Spivak, vice-president of global sales for Tauck, the US-based tour organizer.

"Itineraries that offer rich, exotic experiences are now popular with super-rich travelers, such as our Amazon River cruise or an expedition to a Kenyan national park."

Utour's publicity manager Li Mengran adds that tours to the south and north poles led by scientists and accompanied by professional photographers are also best-sellers.

With the outbound travelers' rising numbers, air links and flight capacity have expanded accordingly.

Data from OAG, which compiles air travel intelligence, show 298,353 scheduled domestic and international flights left Chinese airports in November, with capacity on international flights up 20 percent year-on-year.

South Korea and Japan lead the way in terms of available capacity, with Vietnam the fastest-growing market.

The figures highlight strong growth in several smaller markets, as Chinese and foreign carriers compete to serve outbound Chinese travelers.

Flights to and from countries such as Afghanistan, Belarus, Czech Republic and Fiji were launched in 2015, while capacity on flights to countries like Iraq, Iran, Pakistan and Turkmenistan grew in excess of 20 percent in the first 11 months.

"The major reason for the growth lies in the policy changes that began in 1997 to allow Chinese to travel abroad at their own expenses, which unleashed a high demand for overseas travel," says Jiang Yiyi, director of the International Tourism Development Institute.

"Since then, increased disposable incomes, extended national holidays, relaxed visa restrictions for Chinese travelers and the rising value of the renminbi (China's currency) have all contributed to the boom."

The starting point of Chinese outbound tourism is July 1, 1997, when China National Tourism Administration (CNTA) and the Ministry of Public Security jointly signed an agreement on measures concerning the administration of outbound travel of Chinese citizens at their own expenses.

Since the reform and opening-up policy in 1978, China dramatically increased the number of private passports. In fact, before the policy, generally Chinese travelers needed official reasons to leave the country.

The two following decades showed a continuous growth of private passport holders due to an increase in outbound visits to friends and relatives, as well as a growth of young Chinese studying abroad from the late 1980s. The 1990s has seen more Chinese going abroad at their own expense.

Today the procedures to acquire passports and other pass certificates are further simplified and more than two thirds of the private passport holders go abroad for tours.

On the other hand, China has swelling ranks of upper middle class and wealthy families, defined in the report by Boston Consulting Group (BCG) and AliResearch with a monthly disposable income over 12,500 yuan ($1,928). This group has seen their share in China expanding from 7 to 17 percent in the past five years and will continue to grow to 30 percent, or 100 million households, by 2020, the report said.

Some have compared the current trend to when Japanese tourists began going abroad three decades ago. From the mid-1980s through to the 1990s, the number of Japanese heading overseas swelled from four million to 16 million, while at the same time the nation's per capita GDP rose from $10,000 to $35,000.

"Before (the 1980s), Japanese tourists liked to stay onshore for vacations. But as they became richer all of a sudden they started to travel more. The same thing is happening in China, but at a much steeper rate," says Daniel Wilson, an economist at ANZ.

In addition, about 50 countries and regions have waived visas or relaxed requirements for Chinese.

And the United States, South Korea and Japan extended the validity of multiple-entry visas for Chinese in 2015. Countries like Australia and the United Kingdom are expected to follow in 2016.

Mobile Internet and apps have also helped to fuel China's outbound tourism boom.

The rapid advancement in technology in recent years means even cheap mobile phones are now effectively palm-top computers, giving users instant access to real-time information on almost any topic.

Avid travelers have been among the biggest beneficiaries of this technological revolution — they can now book flights and hotels in an instant, use "digital wallets" to buy souvenirs, post reviews on the fly, and download apps that offer detailed maps and guides of far-flung places, all in their native language.

"Technological advances have been key, as the Internet has reduced travel costs and made exotic destinations more viable (for Chinese tourists)," says Zhu Zhengyu, an analyst at Analysys International. "It has also led to more Chinese traveling independently rather than in groups."

The Chinese International Travel Monitor, compiled by online booking agency hotel.com, says at least 50 percent of tourists arranged a holiday through a smart phone app in 2015, up 17 percent year-on-year.

During recent years, China's outbound travel market has grown rapidly partly due to another emerging reason concerning the poor air quality in major cities.

In 2014, Ctrip teamed up with insurance company Ping An to offer "smog insurance" for people who choose to holiday in Chinese cities regularly affected by poor air quality. Yet most prefer overseas destinations.

Zhao Lanlan, who lives in Beijing, traveled to the United States twice in 2015. "I spent one and a half months on the east coast and a month in Texas," the 58-year-old says. "I can't stand the smog. In winter, the smog gets worse, and it doesn't help hiding at home."

Going to US is easier now thanks to the relaxed visa policies, she adds. "It feels great there just to go around in the sunshine under the blue sky."

China's outbound tourism market is expected to sustain rapid growth this year thanks to multiple favorable elements at home and abroad. The number of outbound tourists is expected to surpass 130 million in 2016, up 10 percent over 2015.

China's supply-side reform, which aims to improve industrial efficiency and productivity and reduce corporate costs through tax cuts and other measures, will produce new engines for economic growth, which is good news for outbound tourism.

Efforts to ensure the orderly development of the sector will continue, as China considers tourism an integral part of social harmony. As President Xi Jinping has pointed out, tourism is seen as an important barometer of the standard of living, while outbound tourism holds a special charm for the Chinese public.

Developed economies are paying more attention to the role of inbound tourism in boosting local economies and employment. Hence, neighboring, medium-distance and long-distance destinations will continue to compete for Chinese tourists. The relaxed visa policies and improved Chinese-language services that nations have been introduced in recent years are proof of that.

The exchange rate for China's currency, the renminbi, is likely to maintain a downward trend this year, according to multiple financial institutes, but the range won't be too wide or halt momentum in China's outbound tourism.

Chinese tourists will likely flock to countries along the routes mapped out in the Belt and Road Initiative as well as those with convenient visa policies.

Since mid-2014, the State Council has made clear that it wants to develop tourism along the Belt and Road routes, which will link Asia with the Middle East, Africa and Europe, while the country has been actively working with other countries and regions to make this a reality. China has held or plans to hold major tourism programs with South Korea, India and countries in Central and Eastern Europe.

In its 2014 report on the impact of tourism on the global economy, the World Travel and Tourism Council, headquartered in London, said visa policy restrictions were one of the main obstacles to tourism market growth. To prove the point, visits by Chinese have swelled in countries that have waived visas, introduced visas on arrival, streamlined application procedures or cut processing costs.

Chinese visitors to South Korea's Jeju Island surged by 58 percent year-on-year to nearly 2.9 million in 2014 after the authorities there started to allow 30-day visa-free stays. The flow of Chinese tourists will therefore likely grow thanks to further loosened visa policies this year.

More outbound tourists are likely to emerge from China's central and western regions, especially from second- or third-tier cities and rural areas.

According to forecasts by the Ministry of Transportation, the country was to have 42 high-speed railways in operation by the end of 2015, stretching a total of 20,000 kilometers. The rapid development of high-speed rail will give people from once-isolated areas easy access to large cities, which will greatly broaden the source of outbound Chinese tourists.

Urbanization will also continue to power growth in tourism consumption. Data from the National Bureau of Statistics suggested the urbanization rate would reach 58 percent in 2015. Mid-sized and small cities and rural areas are already warming to the outbound tourism market.

Meanwhile, retail consumption will likely flow back to China in 2016. Cross-border e-commerce businesses have enjoyed booming growth thanks in part to the development of free trade zones and favorable policies, which will be further stepped up in the new year.

Chinese are expected to buy more in their homeland as more foreign goods become available, while there is also room to cut prices and improve after-sales services. The author is director of the China Tourism Academy's International Tourism Development Institute.

Industry professionals share their views on why there has been such an explosion in outbound travel in China, will the boom continue, and is the world prepared to welcome more Chinese travelers?

Tokyo

Gyokurin Sei, manager of China Team of Global Strategy and Coordination Dept, Marubeni Corp

Q: Have you seen an increase in the number of Chinese visiting Japan? If so, what are the reasons?

A: The number of Chinese tourists coming to Japan multiplied in 2015. The number of Chinese visitors to Japan is expected to exceed 5 million in 2015.

Japan is a paradise for Chinese shoppers. They buy almost everything, including electronic items, watches, cosmetics, food, garments, toilet seats, healthcare products, kitchenware and pollution-proof masks.

Chinese currency's appreciation and the Japanese currency's devaluation make it possible for more Chinese tourists to visit Japan and go shopping.

Japan has relaxed visa requirements for Chinese tourists. More people visit for business, medical care and in-depth tours throughout Japan.

Japan has expanded the duty-free list and made it easier for foreign tourists to get tax refunds. Chinese tourists can use China's UnionPay cards at Japan's duty-free shops and large, convenient stores.

With more tools to communicate such as WeChat, Chinese tourists can share live the information and photos of Japan's scenic sites and products with their relatives and friends. This may encourage more people in China to visit Japan.

Last but not least, China is geographically close to Japan, which makes it easy for Chinese to visit the island country.

Q: Do you think the increase in Chinese tourists is a lasting trend?

A: Yes, the trend will continue.

Ho Chi Minh

Xu Qian, 26, with Cong Ty Co Phan Du Lich Quoc Te Lol Nguyen Dat Viet Nam International Travel Joint Stock Company

Q: Have you seen an increase in the number of Chinese visiting Vietnam? If so, what are the reasons?

A: Yes. There have been more individual tourists, tour groups and business travelers from China since President Xi Jinping's visit to Vietnam.

Q: What kind of preparations have you made for Chinese tourists?

A: Our company has hired more Chinese guides and arranged trainee programs. We also ask our partner restaurants to provide more food that matches Chinese tastes.

Q: What do tourists like to do in your country?

A: Chinese tourists like drifting out to the sea. The sights at sea are wonderful in Vietnam. And they enjoy the leisurely lifestyle, too. They also like shopping.

Q: What do you like and dislike most about Chinese tourists?

A: I like to see Chinese tourists' smiling faces. They are so excited when they see the sea. But I don't like some uncivilized behavior, such as breaking in line, taking photos of airline stewardesses and making noise in the hotel lobby.

Q: Do you think the increase in Chinese tourists is a lasting trend?

A: Yes, I think so. I believe more Chinese tourists will come to Vietnam, as the countries are so close and the transport links are good. Outbound travel will be more popular among Chinese people as they become richer. Vietnam is a good choice.

New York City

Dena Libner, director of Communications & External Affairs at NYC & Company

Q: Have you seen an increase in the number of Chinese visiting New York City? If so, what are the reasons?

A: NYC & Company predicted that 852,000 Chinese tourists will visit New York City in 2015, which represents an increase over 2014 visitation.

Q: What do Chinese tourists like to do when visiting NYC?

A: The most popular activities among Chinese visitors in New York City are shopping and sightseeing, followed closely by visits to art galleries and museums.

Those three activities rank highest among nearly all international visitors to New York City, which is no surprise: NYC is a global capital for arts, culture and fashion.

A younger and more affluent generation of Chinese tourists is causing a shift in the Chinese visitation market from predominantly business and group travel to independent, leisure travel. On average, Chinese visitors are planning their trips further in advance and traveling more with spouses and children.

Q: How are Chinese tourists' travel habits different from those from other countries?

A: According to our most recent data, Chinese visitors were more likely to experience New York City's fine dining and cultural heritage sites than other international markets, as well as take guided tours.

They were also less likely to go nightclubbing or dancing, or to attend a concert, play or musical.

Los Angeles

Kathryn Smits, vice-president of International Tourism at the Los Angeles Tourism and Convention Board

Q: Have you seen an increase in the number of Chinese visiting Los Angeles? If so, what are the reasons?

A: Yes, we continue to see an increase in visitors from China. We continue to see double-digit growth in visitation from China and expect that trend to continue for at least the next two years.

We attribute this growth to a number of factors, most notably the increased airlift Chinese visitors have to Los Angeles. We currently have 54 weekly flights from China to LA and in January, we'll welcome nonstop service on Hainan Airlines from Changsha.

Los Angeles has long been featured in films and television shows and as such, the Chinese have a high level of familiarity with the idea of Los Angeles and have cultivated a strong desire to experience its famous assets like the Hollywood sign, shopping on Rodeo Drive and celebrity culture.

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Author: Li Jing, Yang Feiyue, Jiang Yiyi
Designers: Hebe, Chen Xiaotong, Du Bing
Editors: Chen Bei, Jiang Wei, Liu Jing
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Published: Jan 7, 2016

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