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Tip of the Iceberg

Chinese tourists are developing more sophisticated tastes, and destinations are having to up their game to provide both familiar comforts and niche experiences

By NewsChina Updated May.3

According to the International Association of Antarctica Tour Operators, 5,289 Chinese travelers visited Antarctica last year, overtaking Australians to gain the No.2 spot, only outnumbered by American visitors. Fifteen years ago, in 2003, only 37 Chinese tourists set foot on the continent. 

This year will see an even greater number of Chinese tourists – in the first three months of 2018 alone, 2,000 Chinese tourists visited the great icebound continent. 
From Kenya to Antarctica, from Morocco to Montenegro, now industry players around the globe are catching up with the idea that Chinese tourists are coming, whether they are ready or not. The big question is, are they prepared for the demands of this new market? 
Luxury lovers, high-end shoppers, selfie addicts, visiting a new country every day on whistle-stop bus tours – stereotyping Chinese tourists as a homogeneous mass is a dangerous mistake. No matter how much destinations welcome the money, what they really face is a sophisticated market with shifting demographics and segmented demands.  

Huge Market 

As the world’s largest source of outbound tourists, Chinese people made 130.5 million overseas trips in 2017, an increase of seven percent on the previous year, according to the China National Tourism Administration. 
More important than the number, Chinese tourists also lead the world in terms of expenditure, spending US$115.29 billion on overseas travel. 
But this is just the beginning – of the country’s population of 1.38 billion, fewer than 10 percent hold passports. Sun Jie, CEO of Ctrip, a leading travel service provider in China, estimated during the World Economic Forum in Davos on January 24 that, by 2020, the number of Chinese passport holders will double to 242 million, which means the current boom is just the tip of the iceberg. 
“The development of Chinese tourism is a symbol of China’s social transformation,” said Ge Lei, CEO of the Beijing-based CYTS-Linkage public relations firm under China’s top tour operator CYTS Tours Corporation. Ge is also a researcher at the National Image Research Center at Tsinghua University and visiting professor at the Department of Tourism of Beijing Union University.
Tourism is a very young industry in China, he told NewsChina.  

For a long time, going abroad was the privilege of senior government officials involved in matters of State and foreign affairs, remaining just a pipe dream for ordinary people. Outbound tourism did not exist in the Chinese mainland until the early 1990s.  
The breakthrough for Chinese outbound tourism came in 1991, when organized tours for Chinese nationals were allowed to go to Malaysia, Singapore and Thailand.  

Introduced in 1998, “Golden Weeks” – seven-day holidays – marked another turning point in the evolution of Chinese tourism. Three golden weeks – one for Spring Festival, which takes place between January and February, one for the May 1 Labor Day, and one for National Day on October 1 – gave Chinese people a previously unheard of opportunity to travel inside the country or abroad. The May Golden Week has since been abolished in favor of several shorter public holidays. 

“2007 was a watershed: as from then on, inbound tourism to China has been in decline, but outbound tourism has seen an average 20 percent growth year-on-year until 2017,” Ge said. 
Since 2012, Chinese have been the world’s top spenders in international tourism and have led global outbound travel. As of 2016, the country accounts for 21 percent of the world’s international tourism spending, or US$261 billion.  

Why are Chinese so keen on traveling abroad? Ge thinks the boom is driven by economic and psychological factors.  

The explosive growth of China’s middle class has brought sweeping economic changes and social transformations. Rising household wealth has been the catalyst for a shift from spending on luxury goods to experiencing outbound tourism. A strong currency has also supported this.  

In terms of psychological needs, travel is seen as a temporary solution to ease Chinese anxiety over fractured family relationships, with people living far apart, a consequence of decades of migration in the course of the country’s rapid modernization and urbanization. Rapid economic and social development has put stress on people, and their minds and souls have become numb by long work hours, breathing polluted air and the struggle to get on in life.  

Travel, like a valve on a pressure cooker, helps Chinese people escape from their harsh reality and is like a balm for the soul, Ge said.  

Niche Groups 

Chinese tourists are not only growing in numbers, but the market is increasingly segmenting with diverse, individualized and niche demands.  

Destinations should not make the mistake of assuming that Chinese tourists are a homogeneous mass, as they come from variety of age groups, regions and incomes, and different tourists have different sets of wants and needs. 
Package tour travel has gradually been seen as a less prestigious form of travel that is now mainly for unsophisticated newcomers. Free independent travelers (FITs) are moving away from cheap package tours to experience-seeking, self-organized trips or private group travel.  

According to the 2017 Report on Chinese Outbound Tourism, issued by the Chinese Tourism Academy and Ctrip, 56 percent of outbound travel will be either self-organized or by customized flexible offers for small groups of friends, family or colleagues. 
“China is an extremely complicated society. The standard of living in first-tier cities in China is already close to that in developed countries, and the country still has a huge market of third- and fourth-tier cities and counties to be developed. That means a great number of people are still waiting to pack up and start their first journey to discover the world,” Ge said.  

Major tourist destinations will continue to be crowded by large groups of first-time Chinese travelers. More experienced travelers, however, will turn up in unexpected places, trying the local cuisine and visiting cultural and historical sites. For many, a unique experience is far more important than the cost.
“Travel is my biggest hobby and the strongest drive to work,” said Hu Kaifeng, 28, who works in a Beijing-based overseas education technology company. As a frequent traveler who has traveled to 28 countries, Hu describes himself as having “wanderlust.”  

Hu loves to visit UNESCO World Heritage Sites around the world. “My lifespan is limited, but travel allows me to transcend time and space to experience history,” Hu told NewsChina.  

Graduating from the London School of Economics and Political Science, Hu can speak fluent English and German. Cost is not a concern. Last year alone, Hu and his family had four overseas trips, costing him nearly 200,000 yuan (US$ 31,779).  

“When I was in Tomar, a small Portuguese town, I wandered into a synagogue, where I happened to find local people chanting in Hebrew. I sat on a chair and listened to their songs. I was enchanted by the melody as well as the aura. One man gave me a yarmulke and I wore it on my head. Some stared at me with curious and friendly eyes, as if they were surprised by a new face from the East,” Hu said, recounting an episode of his global journey which he thought was very unique.  

“I want to discover untouched sites and seek more unique experiences,” he said. “I have visited 70 World Cultural Heritage Sites, but there are still 1,000 waiting for me to discover them.”  

Themed tours and niche destinations are increasingly being developed as enormous markets. Tropical islands, small towns and quaint countryside villages are becoming more appealing to Chinese tourists.  

You can find Chinese tourists hunting the northern lights in Finland, looking for wildlife in South Africa, going skydiving in New Zealand, walking on the desert plains around Uluru in Australia or riding a Harley along American highways.  

Camp/study tours are a new emerging market. More Chinese parents are signing their children up for overseas study tours during the summer vacations, and a big cluster of famous universities makes the US the first choice. 

 “What’s special about Chinese traveling to the US is that many of them go there with an educational focus,” Sylvia Liu told NewsChina. Liu works in a startup travel agency in the US, which mainly focuses on Chinese study and camp tours near the US Eastern seaboard, especially Philadelphia. 

“In the past, Chinese tourists came to the US just to sightsee, but now more come to send their kids to experience American life and possibly set the stage for going to college in the US,” Liu added. 

Chinese parents are willing to pay big bucks to send their children to a US-style camp or on a study tour. “One camp [we designed] usually consists of 50 to 100 teenagers. The price ranges from 30,000 (US$4,775) to 50,000 yuan (US$7,959),” she said. 

Last year, more than 800,000 Chinese went on a study tour abroad during the summer vacation. Their spending is expected to reach 20 billion yuan (US$3.06b), Ctrip reports. The majority of participants are middle school students from well-off families in first-tier cities such as Beijing, Shanghai and Guangzhou.  

Profiling Chinese Tourists  

According to a Nielsen survey on outbound Chinese tourism and consumption trends in 2017, Chinese and non-Chinese tourists display obvious differences in the type of spending on overseas trips, with Chinese tourists exhibiting stronger purchasing power. Non-Chinese are most concerned about the cost, including the absolute price of goods and their personal travel budget; Chinese tourists place greater weight on the relative price of a good or service after receiving a discount. Chinese tourists spent an average of US$729 per person on shopping on their most recent overseas trip, while non-Chinese tourists averaged US$486.  

“Since they [Chinese tourists] are super crazy about shopping, for tourism operators, a tour without the ‘buy-buy-buy’ part is not well-designed,” Liu told NewsChina.  

“Consuming luxury goods and high-quality products is an essential psychological need for Chinese tourists to prove their material capability and happiness. They have a strong desire to show others that they have money and are living the good life,” Ge said.  

In addition to this “buy-buy-buy” mentality, taking photos anytime, anywhere is another must for Chinese tourists.  

“One may find that non-Chinese tourists, especially Western tourists, love to tan on the beaches or try water sports; Chinese tourists will try on dozens of beach outfits and strike hundreds of poses for photos. Taking photos is an extremely strong psychological need for Chinese, it’s another efficient way to show off their great life,” Ge said.  

The internet is an indispensable part of Chinese tourists’ outbound travel. “They are the forerunners of mobile applications and revolutionary payment methods,” stressed a report by the UN World Tourism Organization titled Penetrating the Chinese Outbound Tourism Market, which was issued in August 2017. 

When preparing to travel overseas, 97 percent of Chinese tourists will purchase a data package or make other preparations for using their smart device, so they can enjoy the many benefits of mobile internet access, such as communication, socializing and navigation, as well as exploring local attractions or restaurants, the Nielson report said. 

Everyday millions of Chinese tourists discuss and write about their travel experiences on social media and tourism-related online platforms. “Compared with non-Chinese travelers, Chinese FITs heavily rely on online experience when designing a tour. They are keen to prepare a tour packed with others’ recommendations, be it the most authentic local cuisine or the most popular attraction,” Tan Zhuo, an experienced outbound industry marketer, told NewsChina.  

“Chinese tourists have a long list of must-sees, must-dos, must-eats and must-buys, and they have a strong desire to experience all of it during a single trip. They may see it as a painful pity if they miss a chance to experience any one of them. In this sense, Chinese tourists are really not inclined to enjoy a lazy beach afternoon and do nothing as many Western tourists do,” Tan said.  

The reason why Chinese have such a demanding attitude toward travel, Tan explained, is that going abroad is still not easy due to visa problems and limited vacation time, so they want to maximize their happiness all on one trip.   

Changing Views 

As Chinese tourists travel abroad more frequently, in recent years their views toward the world and themselves have changed. 
“Chinese tourists, in the past, admired just about everything from foreign countries, especially developed countries. But this attitude has changed. Now Chinese tourists’ national pride is rising and they are starting to have a more balanced perspective – sometimes fastidious though – in the way they view things from a foreign land,” Liu said.  

“For instance, they think the infrastructure in major cities in the US, France or other developed countries is not as new and advanced as that in China. They also take pride in China’s convenient internet lifestyle and efficient cashless payment systems. They think foreign countries are lagging behind in this field,” he told NewsChina.
Compared to non-Chinese tourists, Chinese are very sensitive about national image and national esteem. Chinese outbound travelers are looking for signs of respect. 
“Chinese tourists often say they feel treated like second-class citizens, even when they spend a lot of money,” Dr. Wolfgang Georg Arlt at the China Outbound Tourism Research Institute, said in an interview with CNN.  

Arlt points out that service providers face the challenge of making Chinese guests feel welcome because these tourists are more prone to relating any unfriendly atmosphere to double-standards of treatment. 
The Nielson report also supports this argument, showing that friendliness of locals to tourists is ranked ahead of affordability when Chinese tourists choose an overseas destination, following the top three concerns – beauty and uniqueness, safety and ease of visa procedures. In contrast, friendliness of locals to tourists is not one of the top five concerns of non-Chinese tourists. 
“I remember when I dined in a local restaurant in Venice, the restaurant owner came and asked me, ‘Are you Japanese?’ I said ‘no, I’m Chinese.’ He seemed quite surprised and said ‘Sorry, I thought Chinese were rude, loud, always avoiding interaction with locals, either eye contact or conversation, but you are so gentle and polite…’ I must admit I felt bad about Chinese being stereotyped,” Yu Min, 30, a tourist from Hangzhou who recently visited Italy, told NewsChina. 
For locals in tourist destinations, Chinese tourists leave them with an impression of being noisy, rude and ill-mannered. Some Chinese behavior, such as queue jumping, littering, spitting or flouting traffic laws, is detrimental to the image of the country’s people. 
Arlt says that too many locals complain about the negative side of Chinese tourists, but the fact is that those noisy, rude and uncivilized first-time tourists are “more visible.” There are still a great number of polite, educated tourists, who speak perfect English and are frequent travelers, who blend into global cultures so well that they are seldom identified as Chinese. 
“When we talk about Chinese tourists, we must understand the community’s diversity, complexity and development. Indeed, many Chinese tourists do not understand the local rules and customs in the beginning and make mistakes. But they have been learning and making progress over the years,” Ge said.