General Overview
Scottish Enterprise and Scottish Development International commissioned research into the International Tourism Markets of Brazil, Russia, India and China. This report focuses on the Chinese International Tourism Market and provides you with the key facts and motivators for the Chinese market. It will help you to identify the opportunities for tourism in Scotland by providing you with information about what Chinese visitors to Scotland want and expect. With that information, and by working together, you can help realise the tourism potential for Scotland.
As the fastest-growing economy in the world, China is one of the largest exporters, attracting record sums of foreign investment and investing billions of dollars abroad. Strong growth over the past five years defines outbound tourism from China. As the third most lucrative global market, spending exceeds US$70 billion each year, with growth of around 400% over the past 10 years. The UK’s share of Chinese visitors has grown in recent years; however, continues to face intense competition.
Regional destinations top the list for outbound Chinese travellers, with trips to Asia and the Pacific region accounting for 91% (64 million). After that, Europe is the next most visited destination, accounting for 4.4% (3 million) trips. Analysis by VisitBritain suggests that the UK has lost market share to key competitors such as France and the USA over the past five years. Chinese travellers spent over US$100 billion in 2012 worldwide. That sees China become the largest international tourism spender, outstripping both the USA and Germany.
The next ten years will see population demographics influence Chinese outbound tourism market. Numbers in the 35 – 60 year age group are growing and that already positively influences travel to Europe. Working-age ‘empty nesters’ is forecast to become one of the fastest growing demographic segments for outbound travel. The young, affluent middle class could become the biggest driver of travel demand, a segment forecast to grow to 500 million by 2025.
While China’s leading cities (Beijing, Shanghai and Guangzhou), and their surrounding regions are the source of most outbound travel, second-tier cities are now also establishing themselves as travel demand centres. Seasonality also plays its part, with the bulk of travel to Europe occurring between the months of May and September. Few Chinese tourists travel without companions (7%), and the vast majority within family groups or with friends. Most outbound Chinese visits are those taken for leisure. Importantly though, the majority of those travelling to the UK and the Nordic countries are business travellers. Notably, business trips regularly include leisure activity.
Paying for accommodation while travelling is generally high among Chinese travellers visiting the UK, although interestingly studies suggest more nights are spent as a free guest with relatives or friends than in any other form of accommodation. Study visits usually adopt hostel, university or school accommodation. Holiday and business visits account for most nights spent in hotel and guest house accommodation.
Market Analysis
While growth in Chinese visitors to the UK has tripled in the last ten years, it is important to recognise that this growth is in its very early stages of development. With more than 20% year-on-year growth in recent years, the Chinese market has been one of the fastest growth sources for UK tourism.
Around 10% of Chinese visit Scotland while travelling in the UK. Business travel leads these statistics, with visiting friends and relatives following. London leads as the most visited UK city, with Edinburgh third and Glasgow fifth. Scotland does feature in Chinese visitors’ dream activities and iconic images when on a UK visit. For example, in one survey, close to a third want to spend a night in a Scottish castle while on a UK visit (ranking as the third top activity). Similarly, in responding to another survey, Chinese visitors identified a castle in the Scottish Highlands as the third most iconic image of a UK holiday.
VisitBritain predicts strong growth in Chinese visitors to the UK through to 2021, with potentially 400,000 annual visits by that time. That translates to something in the region of 40,000 Chinese visitors to Scotland. UK government investment of around £8 million aims to support an ambition to treble Chinese visitor numbers to the UK over the next few years. VisitBritain’s strategy is to grow visitor numbers from China by 200,000 by 2016, resulting in a £600 million spend, and creating 9,000 jobs in the UK within the tourism, hospitality and retail sectors.
Chinese travellers fall broadly into three groups; Official and Business, Leisure, and Free Independent Traveller s (FIT). Official and Business groups comprise mainly men, travelling alone or in small group. These travellers will often combine sightseeing alongside work activities. The Leisure group is represented by groups of men and women, often travelling as part of a larger organised tour group. FIT group members tend to be more seasoned travellers, often travelling as couples or small groups of friends.
Despite some wide disparities in income and living standards in China, at least 150 million are classed as having middle class income or above and consequently can afford international travel. The Chinese middle class is increasing rapidly and will soon see more outbound travel opportunities.
When travelling, Chinese visitors enjoy a range of activities, including sightseeing, taking photographs, luxury goods shopping, buying souvenirs, sampling local cuisine and specialities and experiencing local culture. While Edinburgh tops the list of popular destinations in Scotland, Glasgow, St Andrews, Inverness, Loch Ness, Fort Augustus, Fort William and Mallaig are also popular. The choice of attractions to visit is generally made by European tour operators. This will mean that Scottish attractions will need to build long-term relationships with Chinese travel agencies in order to develop trust and win business.
Evidence from FIT travellers suggests that Chinese visitors do enjoy longer, more in-depth visits to Scotland. Of particular note is their interest in European culture and history. Given their own history spanning thousands of years, the sense of history in Scotland resonates with them and could prove a useful lever in tourism promotion.
Shopping is a highlight for Chinese visitors. With less breadth of luxury brand availability in mainland China, the opportunities to engage this audience are higher for the UK and Scotland. Authenticity and recognition by polite and attentive shop staff rank highly for Chinese shoppers. Scotch whisky in particular stands out a must buy gift for visitors. Extensive Chinese internet coverage exists for whisky, albeit there is little activity surrounding whisky tours. Sites covering the topic include:
While inexperienced Chinese travellers often prefer traditional Chinese fare, a growing group of more seasoned travellers are definitely willing to sample local food. Entertainment and enjoying a drink and music prove popular too. Casinos and cabaret shows carry huge appeal and generate a lot of excitement!
The Chinese market values key items such as whisky, bagpipes and tartan, and interestingly, while Chinese agencies are starting to promote golf due to its rising popularity in China, few online searches return results for actual golf trips. Some operators who do promote golf include Time4Golf, Beijing Suyuan Golf and Suzhou Tiahu Golf Club. Edinburgh based Universal United Commerce Ltd (www.uucl.co.uk) creates custom travel packages that focus on both golf and whisky.
Chinese travellers prefer spacious modern hotels with state of the art equipment and lots of personal service. They rarely share the Western view that small, older establishments offer greater charm and attractiveness. Very few Scottish hotels offer Chinese translation within their websites. TripAdvisor’s Chinese version, DaoDao.cn returns the most frequent results in relation to hotel booking.
Some useful tips to consider when thinking about Chinese travellers include:
- Never offer guests a room on the fourth floor or on floors containing the number four. This is associated with bad luck.
- Chinese translation of hotel and room services should be available in every room.
- Tour groups prefer twin rooms since companions may not know each other before the trip.
- Check-in and check-out needs to be smooth. Chinese guests do not like to wait for long.
- Electric kettles are a good idea to allow tea brewing.
- Proximity to a Chinese restaurant will be a booking consideration, as will the availability of shopping opportunities.
- Chinese guests are not accustomed to drinking tap water.
- Stocking mini bars with green tea and instant noodles will be appreciated.
- Chinese guests travel light and so a selection of basic accessories such as toothbrush, toothpaste, razor and comb is a good idea.
- Chinese international satellite programmes are available globally and providing these is a valuable selling point.
The Online Trend
In 2012, China ranked as the largest internet audience worldwide with an internet population of 513 million users (set to grow to 650 million by 2015). Of vital importance to the travel industry is the fact that over 80% of Chinese travellers use the internet to search for information and exchange opinions on destinations, travel services and products. At an estimated US$48 billion in 2016, Chinese consumers will spend more than the rest of the BRIC countries on online travel. Online travel sales are set to grow at an annual compound rate of more than 14% from 2001 to 2016. Interestingly, visitor traffic to travel websites in China jumped 40% in 2012, compared with 7% growth for total internet traffic.
In order of effectiveness, the following influence customers’ decisions in travel purchasing:
While Western social media sites such as Facebook and YouTube are banned in China, their online social media community is the most active in the world, driven by an eagerness to share experiences with friends. Blog writing, posts on travel websites, forums and social networking sites are the most popular sharing channels. Important social media services include:
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Sian Weibo, Tencent Weibo, Twitter (micro blogging)
- Renren, Kaixin001, P1 (social networking)
- Ushi, Tianji Wang, Linkedin (professional networking)
- Jiepang (location based service – FourSquare)
- Mafengwo, Daodao (travel platforms)
VisitBritain operates a Megablog on Weibo with some 150,000 followers. Their site ranks high in terms of influence ahead of government accounts including the Korean Tourist Board, CNTA and Singapore accounts.
Traffic to Chinese online travel agencies is growing very rapidly and is led by the package travel specialist Tuniu. While supplier websites attract the smallest share of online traffic, visits to both hotel and airline categories effectively doubled from 2011 to 2012. While most Chinese travellers reference information online, they generally prefer to make bookings direct, either by phone or in a travel agency office. With over 80% of bookings made through call centres, it is important that good connections and distribution operations are maintained with Chinese travel agents.
Business Tourism
Outbound incentive travel from China is a growth sector. For those looking to target this market, research into Chinese companies with Scottish or UK operations is advisable, as well as investigating travel agencies engaged in Meetings, Incentives, Conferences and Exhibitions (MICE) business within China. Golf and whisky tours represent a natural fit with incentive travel. The business market is potentially lucrative, with Chinese officials and business travellers generally identified as big spenders.
Allied to the business market are those people on extended stays within the UK who are studying abroad. Targeting and engaging this group would prove particularly beneficial since they will actively influence their peers through word-of-mouth by relaying the experiences, and images they found attractive during their stays. Again, social media plays its part, with this group communicating with friends and family while abroad through mediums such as Weibo. Some useful reference points for targeting Chinese visitors on extended stays are:
How to Reach the Market
Europe’s multicultural society, long history, diverse and extensive civilisation carries a huge draw for Chinese travellers. Many first time visitors will travel in a group visiting between five and ten countries over a ten day period. More experienced travellers will visit perhaps three to five countries over a similar time period. Heavy promotion of single country destinations would be required to focus single country tours and currently there are very few of these. European destinations which have done this well include France, Italy and Germany. Scottish visitors are virtually all part of tours visiting the UK, Ireland and neighbouring countries.
Of 20,000 travel agencies in China, only 1,600 are licensed to operate outbound travel. Varying in size, some are national operators and others purely regional. Well known national names include China Travel Service (CTS), China International Travel Service (CITS), China Youth Travel Service (CYTS), China Comfort, China International Trust and Investment Corporation (CITIC) and China Merchants. Mainstream Chinese operators currently offering Scottish destinations and attractions include CITS, CTS, Utour and Shanghai Spring Tours. Other companies offering Edinburgh and Glasgow en-route to the Irish ferry include CYTS, BTG International Travel and Tours, Caissa and China Comfort Travel.
The major agencies such as CITS, CTS, Comfort Travel and BTG have MICE departments. Wholesalers include 51book, 517na, China Air Service, Buyecheng, iTour, Easyboarding, Yiqifei and Meiya. Ctrip (www.ctrip.com) is the largest Chinese online travel agency and offers Edinburgh as part of its UK tour. Some smaller agencies that offer similar packages include eLong, Lostrip, Mango City, Aoyou and Tuniu.
Group tour planning cycles see brochures produced by wholesalers quarterly. Suppliers need to engage with tour operators at least six months ahead of the Chinese high travel seasons. UK based operators with sizeable Chinese business include GTA, Kuoni, AC Tours, China Holidays, Newland UK, Benmo, and Chinese Business Network. Trade show participation is a valuable way to gain visibility for the Chinese travel business and establish personal networks.
Key UK trade shows include:
Chinese International Trade Shows include China International Travel Mart (CITM), Beijing International Tourism Expo (BITE), Guangzhou International Travel Fair(GITF), World Travel Fair (WTF), China Outbound Travel and Tourism Market (COTTM), China Incentive, Business Travel and Meetings Exhibition (CIBTM), Incentive Travel and Conventions, Meetings China (IT&CM China) and International Luxury Travel Markets (ILTM).
Cultural Implications and Doing Business
Making a success of doing business in China requires an understanding of Chinese culture. Business relations in China are based on personal relationships and trust. Business partners are expected to engage in long-term relationships that also exist on a personal level. A patriotic nation, the Chinese are very proud of their country and its success. It is important to remember that the Chinese have little if any access to the Western media information criticising China’s human rights record in Taiwan and Tibet and reference to these aspects is likely to cause offense.
Direct personal questions are common in China. Not intended to be rude or intrusive, culturally these are regarded normal behaviour, and represent concern and friendship. Westerners should be prepared for these when forming personal contacts.
Handshaking is acceptable; however, social kissing is not. Back patting and putting your arm around someone is not usual behaviour unless the contact is close. Bowing must be avoided since this is a Japanese gesture and with historical hostility between these nations still a reality, this would be a material mistake.
Greeting with respect, bringing a gift, showing interest in their business, workplace or home town will all support the Chinese notion of gaining ‘face’. Avoid loss of ‘face’ by ensuing that Chinese contacts are never embarrassed, especially in front of their staff or friends.
Gift giving is a highly valued and practiced among Chinese, both personally and in business. Be prepared to reciprocate their giving by preparing typical local gifts in order to show respect and esteem.
Name cards are always exchanged at Chinese business and social meetings. Ensure that you engage a native Chinese speaker to help you translate your Western name with the most appropriate Chinese characters.
Punctuality is vital since the Chinese regularly arrive early at appointments.
In China, there are clearly defined hierarchies between superiors and staff. Showing respect to these hierarchies is vital in maintaining ‘face’.
The Chinese place great importance on the community taking precedence over the needs of the individual. Consequently, co-workers will adapt to preserve the harmony of the group. Chinese groups can also be loud, particularly during large business lunches and dinners. This should not be confused with rudeness, since it represents enjoyment and caring within Chinese culture.
Managing expectations over what can and cannot be delivered is important since in China, service providers are expected to bend over backwards to meet the requirements of their customers. In turn, they expect the same of their partners, and that their clients’ needs will be treated with the same importance. The Chinese can find it difficult to understand the often less service-oriented Western approach.
The Chinese business environment can be quite opaque for Westerners. For example, roles of those attending meetings may be unclear and it can be useful to exchange business cards ahead of negotiations in order to understand who the key decision maker is likely to be. The Chinese have a relatively indirect means of communicating and creating a relaxed atmosphere through small talk before launching into serious discussion is valuable. Patience and restraint are vital; loss of either will be viewed as lack of self control and result in loss of face. A Chinese speaker, preferably an experienced translator, can prove invaluable in avoiding misunderstandings and cultural pitfalls.
Food and drink requirements are important considerations when hosting Chinese visitors. Relatively inexperienced travel groups will find it difficult to move away from traditional Chinese food and as such at least one Chinese meal each day is important. More experienced travellers are likely to have more adventurous tastes and will be willing to sample local cuisine and specialities. Regional differences feature strongly in Chinese cuisine so it is important to consider this when arranging meals. Points to bear in mind include:
- Chinese visitors may choose to eat instant noodles in place of what is offered so it is good to provide boiling water.
- Disposable chopsticks are important even when serving Western food.
- Meals are eaten early; breakfast at 7am, lunch at 11.30 – 12.00 and dinner around 6pm.
- Dishes are served all at once or in the order prepared. It in usual for a variety of meats and vegetables to be served together and these are always accompanied with rice and soup.
- Desserts do not feature highly in Chinese cuisine, fruit is generally preferred.
- Green tea is the drink of choice and hotels and restaurants should expect to provide unlimited hot water and tea, free of charge.
- Beer is popular at mealtimes for men, while women will normally take tea and soft drinks.
Did You Know?
- China has the largest internet audience worldwide.
- While online travel bookers pale in significance to overall ecommerce buyers, Chinese consumers will spend more on online travel in 2016 than the rest of the BRIC countries
- Mobile booking is low; however, it is forecast to continue to grow faster than any other channel.
- The Chinese online social media community is the most active in the world. Despite a ban on Western social media sites, the eagerness to share experiences with friends and family is enormous through China-specific equivalent sites.