The Inbound Report

Covering the Inbound Tourism Industry Since 1996

Female Tourists Dominate China’s Outbound Tourism

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Female Chinese TravelersA new report from Tuniu, one of the top online travel booking sites in China, 62 percent of its clients in 2016 were women. Also, female customers dominated numbers among people making multiple trips abroad. Why? Because Chinese travelers are spending more on experiences instead of seeking shopping opportunities, and as this trend has developed, female tourists have become the dominant demographic among outbound travelers.

These were just a couple of the interesting facts one gleaned from the Tuniu data, as reported by ecns.ca. Some of the others include the following:

  • With increasing household income, more parents in China would like to bring their children with them on trips abroad. In 2016, customers under 18 years old increased by 110%, becoming the fastest growing client group.
  • Tuniu’s data shows that Chinese tourists are increasingly traveling greater distances.

 

The table below seems to reflect a shift from short-haul international destinations to long-haul international destinations among Tuniu customers.

Top Ten Dest for TUINI

Also:

  • While tourists from China’s first-tier cities such as Beijing and Shanghai are growing smoothly, tourist numbers from second and third-tier cities are said to be booming.
  • As more tourist destinations became visa-free for China in 2016, China was once again first-overall globally in terms of the number of people traveling abroad, and for tourism spending.
  • Tuniu’s customer bookings increased 34 percent in 2016 compared to the previous year.

TuniuPerhaps only partly related to the good news it released on its own, Tuniu received upbeat news from other quarters as the Credit Suisse Group has upgraded shares of Tuniu Corporation from a neutral rating to an outperform rating in a just-released research note, and Zacks Investment Research has upgraded Tuniu Corp. from a “sell” rating to a “buy” rating.

Asia Travel Boom, Led by China, to Continue in 2017

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ITB World Travel TrendsSubmitted by Betsy Cooper, International Editor

According to the ITB World Travel Trends Report 2016/2017—it was prepared by IPK International on behalf of ITB Berlin—all indices point to substantial growth in outbound travel by Asians. Some highlighted items from the Trends Report:

  • Asians traveled more than ever so far this year, with a surge in trips to destinations within the region and including many more beach holidays. China was once again the growth driver. After a double-digit rise in international trips this year, the outlook remains strong for 2017.
  • The Asian economy continued to grow well in 2016 and is expected to maintain on a solid growth path, according to figures from the ifo Institute for Economic Research in Munich.
  • After GDP growth of 4.8 percent in 2015, the region is forecast to grow by 4.6 percent in 2016 and also in 2017, slowing to a 4.4 percent increase in 2018.
  • In China, fiscal impulses will continue to generate annual economic growth rates of about 6 percent, but Japan and South Korea will be held back by low growth in international trade, according to the ifo experts.
  • Outbound travel by Asians grew by11 percent in the first eight months of 2016, according to World Travel Monitor® figures.
  • There was a very strong 14 percent rise in trips to destinations within Asia and an 11 percent increase in travel to the Americas.
  • The number of trips to Europe dropped, however, by one percent between January and August 2016.
  • China was the driving force for growth with an 18 percent rise in outbound trips (excluding to Hong Kong and Macao).
  • South Korea also performed very well in the 2016 measuring period with an 11 percent rise in international travel.

 

ASIAN OUTBOUND TRAVEL TRENDS

January through August 2016

World Travel Trends Rept A

  • Holidays, which account for an overwhelming 81 percent of all outbound trips by Asians, increased by 11 percent over the first eight months of 2016.
  • There was a healthy 7 percent increase in international business trips, and a strong 12 percent rise in the number of visits to family and friends (VFR) and other leisure trips abroad.
  • Asians are clearly going on more sun & beach holidays, which grew by 20 percent between January and August 2016, according to World Travel Monitor® figures.
  • There was also good growth for countryside trips (+15 percent) and city trips (+8 percent) but the number of touring holidays increased by only 2 percent.

 

ASIAN OUTBOUND TRAVEL TRENDS

January through August 2016

Type of Holiday

World Travel Trends Rept B

 

Rolf Freitag, IPK International founder and president, commented: “This year’s boom in Asian outbound travel, especially by the Chinese, is remarkable. Moreover, we can observe an important long-term trend. Asians are starting to go on fewer sightseeing trips taking in several countries. Instead, many of them dream of relaxing on sun & beach holidays. In other words, they are gradually becoming ‘normal holidaymakers’ like in Western countries.”

The social-demographic profile of Asian outbound travelers reflects this trend towards more short-haul holidays within Asia. They are mostly relatively young:

  • About 38 percent of Asians taking international trips are aged between 15-34.
  • Another 49 percent are aged 35-54.
  • Just 13 percent are aged over 55, according to World Travel Monitor® figures.

The proportion of older international travelers is much higher in Europe and North America. Asian outbound travelers are on average also slightly better educated and better off than their counterparts in Europe and North America.

Against this very positive background, the outlook for Asian outbound travel remains good. IPK International predicts a 6 percent rise in Asian outbound trips in 2017, based on its Travel Confidence Index which measures travel intentions for the following year.

Golden Week in China to Create Record Outbound Travel—USA is Tops for Long Haul

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year-of-roosterAn estimated 6 million Chinese are expected to travel abroad during the upcoming Spring Festival holidays (January 27 to February 2), a record high for a weeklong holiday, according to a report by the online travel agency Ctrip.

“China’s Spring Festival holidays … will be a global Golden Week,” the company said. The 10 most popular destinations are: Thailand, Japan, South Korea, Taiwan, Singapore, Hong Kong, USA, Indonesia, Malaysia and Australia.

Given the unstable political situation in South Korea and the deployment of the Terminal High Altitude Area Defense (THAAD) anti-missile system, Chinese enthusiasm for that country has cooled, Zhang Lingyun, director of the Tourism Development Academy at Beijing Union University, told the Global Times of China (GlobalTimes.cn). However, the number of Chinese traveling to Southeast Asian countries, especially the Philippines, Vietnam and Cambodia, is on the rise mainly due to low costs and geographical advantage, he said.

Besides, bookings for long-haul destinations have peaked, with the U.S. and Australia as the most popular, according to the report, which said that U.S. travel packages for NBA games, outlet shopping or visits to Hawaii are popular.

Although it costs more to travel during the peak season, prices are about the same as they were last year, the report noted. That is due to an increase in the number of flights, advanced purchase of travel packages and travel agency discounts.

The cost of traveling to Thailand, the U.S. and the Philippines is 5 to 15 percent higher than last year. However, it’s cheaper to travel to South Korea, Singapore and Italy, down 10-30 percent from the previous year, said the report.

Easier visa application requirements, more flights and lower prices have induced overseas travel, according to the report.

“After the U.S., Canada and Singapore granted 10-year visas to Chinese, Israel and Australia followed suit. In addition, Thailand reduced its visa fees for Chinese visitors in December, January and February,” a travel agent surnamed Chen at domestic online travel agency lümama.com, said in a statement sent to the Global Times.

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Despite Growth of FITs, China has “nearly bottomless reservoir of first-time travelers” for Groups

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group-of-chinese-touristsA new Citi report indicates that, even though travelers in China are shifting from group travel to personalized travel, the number of new and potential travelers in the nation of more than 1.3 billion people is so large that there will be an abundant supply of first-time travelers willing to travel in groups internationally for some time to come. The Citi report, which covers both domestic and international travel—short-haul as well as long-haul—is filled with useful data for the U.S. travel trade interested in the Chinese market. Following are some of its highlights, as well as observations on the report:

—Mass tour groups are becoming less popular for domestic tourists, as demand continues to grow for more personalized trips.

—As disposable incomes grow and consumers get more destinations under their belts, Chinese travelers are tending to move towards customized experiences.

—More than nine out of 10 domestic tourists last year opted to travel independently, rather than taking a tour, a proportion that has been slowly moving upwards.

—“Chinese travel has entered a stage of leisure travel, from sightseeing travel,” said Lydia Ling, Citi’s vice president, equity research, consumer sector, who prepared the report, adding “Standardized group tours cannot satisfy rising demand for depth, personalization and local experiences by increasingly experienced Chinese travelers.”

—Chinese people in their 20s, and those over 50, have been the key drivers behind China’s booming tourism sector, Citi found, with a 17 per cent compound annual growth rate for outbound.

—Outbound tourism by elderly Chinese grew by a whopping 217 per cent last year, faster than domestic tourism’s 95 per cent.

—Mainlanders now make an average of three trips a year, and by 2020 that number is forecast to grow to six.

—Travelers were motivated by added freedom in how their time is managed and a desire for more in-depth experiences, and this trend should increase, thanks to a wider range of customized products and as more become seasoned travelers.

—But the individualized travel trend doesn’t mean tourists want to make things difficult for themselves. Instead, there’s a rising preference for one-stop-shop platforms such as Ctrip that can help travelers book flights, choose hotels, and arrange local transport.

—The trend of people travelling independently overseas has been growing—but so has the number of people traveling in a group, Hunter Williams, a partner at the international management consultant firm Oliver Wyman, told the South China Morning Post. (Headquartered in New York, the firm also has offices in Beijing, Shanghai and Hong Kong.)

—“Both groups are growing, and there’s still a nearly bottomless reservoir of first-time travelers in China,” Williams said, noting that those who hadn’t traveled before were more likely to opt for group travel.

—Group travel internationally will continue to be a significant segment for a while yet, and Williams didn’t expect domestic group travel to disappear entirely.

—A dissatisfaction with over-commercialized tours that promoted regular shopping stops, and the growing ease of doing your own travel research were two other reasons Chinese tourists might be opting to go it alone, he said.

—“The split between the group and independent travelers [overseas] is likely to remain fairly balanced as travelers gain experience and greater independence, at the same time as numerous newcomers begin traveling, often in groups,” said Williams.

 

 

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Ctrip Partners with L&L (now Universal Vision) and Two Other U.S. Receptives … Move Will Give it Dominant U.S. Market Share

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Company also Expands Reach at other End, Acquiring 5,000 Agency Stores in China

ctripLast July, the Inbound Report cited a report in ChinaMoneyNetwork.com, which said, “Ctrip is now the absolute monopolistic force in online travel in China. One anonymous analyst jokingly describes it as holding a 100 percent market share.” According to data on one research site, as of mid-December 2015, the company had a 43.1 percent share of the online travel market in China.

And now, Ctrip has moved into the USA in a major way. Last week, on Oct. 26 in New York City, the company signed a strategic partnership agreement with two USA-based receptive tour operators in an effort to increase Chinese tourism to the United States. The receptives are:

Ctour, (formerly Seagull Holiday), which is also based in Los Angeles and offers a wide range of USA product and has the largest Visit USA market share on the West Coast; and

Universal Vision, (formerly L&L Travel Enterprises) a New York-based receptive tour operator with a strong presence in mid-Atlantic states and the U.S. East Coast in general.

Combined, the two companies account for more than half the market share of travel packages sold to Chinese visiting the U.S. They will now have access to C-trip’s estimated 250 million-plus users.

Also included in the partnership last week is Tours for Fun, a Los Angeles-based OTA that caters predominantly to Chinese visitors to the USA. It was acquired by Ctrip in December 2013. Tours for Fun doesn’t book direct; it books through Ctrip.

The announcement overheated the smartphones of tour and travel industry professionals as text messages and e-mails bounced back and forth, with rampant speculation as to the impact the arrangement will have on the inbound travel from the China market. (The Inbound Report will do an in-depth report on the impact of the arrangement in our next issue).

The New York City announcement came a little more than a week after Ctrip and Chongqing-based Overseas Tourist Group, operator of online and mobile travel booking platform Traveling Bestone, jointly announced the signing of a strategic investment partnership agreement, under which Ctrip will acquire a controlling stake of Traveling Bestone.

With the move, Ctrip and Traveling Bestone will fully partner on vacation travel services, and Ctrip will gain access to more than 5,000 offline storefronts located in second- and third-tier mainland Chinese cities. Ctrip and Traveling Bestone will also partner on product development, resource purchasing, sales channels, and travel consultant cultivation.

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Tom Berrigan, Managing Editor/Producer
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