The increasing power of the young Chinese tourists

Berenice Pendzialek and Hochschule Fresenius für Management, Wirtschaft & Medien GmbH

China Time Hamburg, 20.11.2014

Berenice Pendzialek

Bachelor in International Relations

Master in Business Administration (UNAM)

Economic Analyst in The Economic and Commercial Section of the Embassy of the People’s Republic of China in Mexico

2009-2012 General Manager of the COTRI Chinese Outbound Tourism Research Institute

Doctoral studies in the Catholic University of Eichstätt-Ingolstadt (KU-Dept. of Tourism Geography). Dissertation: “Performing tourism: Chinese outbound organized mass tourists on their travels through German tourism stages”

Since 2013, Chinese Outbound Tourism Specialist & Senior Research (COTRI)

@BerenicePAceves

WeChat: BerenicePendzialek

berenice.pendzialek.org chineseoutboundinsider.com

8 things to know about young Chinese tourists

1) They represented around 70% from 2013 border-crossings

Chinese outbound tourism in million border-crossings and the compound annual

growth rate (CAGR) from 2000 – 2013 (Pendzialek, 2014 adapted from CNTA and CTA)

COTRI Forecast for 2014

112.0

54.0

Jan-Jun

2014

Word of Caution:

1) Majority of travels occurred in Asian destinations

Hong KongMacauTaiwanJapanSouth KoreaMongoliaPhilippinesThailand

USACanada

GermanyFrance ItalyUKSwitzerland

AustraliaNew Zealand

MauritiusSeychelles

Worldwide Destinations for Chinese, % Share, 2012

(Source: IPK International, 2012)

2) Statistic Discrepancies

201397.3 million border-crossings

China National Tourism Administration (CNTA)

58.9 million COT arrivals worldwide European Travel Commission (ETC)

via Oxford´s Tourism Economics

97 Bio. Euro-2013

80 Bio. Euro-2012

2) First place as global tourism spenders

Expenditure in Germany: above theworld average

Expenditure of Chinese Tourists by Trip and Night in Euros 2010-2012

Region/country 2010 2011 2012

per trip per night per trip per night per trip per night

Worldwide 2,302 344 1,813 288 1,690 295

Europe 3,307 398 2,536 325 2,418 373

Germany 3,447 320 2,329 311 2,996 458

Business 3,788 541 2,312 379 3,308 570

VFR / others 3,500 177 2,440 134 2,240 236

Leisure 3,200 266 2,355 251 2,728 379

Adapted from: GNTB (2011, 2013)

Young Chinese:• Saving is not all• Confident• Independence by shopping

Tax-Free Shopping in Germany

What items?

Tax-Free Transaction Germany: 2012: 628 EUR2013: 580 EURUp to Q3 2014 : 546 Euros

(Source: Global Blue, 2012-2014)

3) They are part of Germany´s main Asian tourism source market

2012: 1.6 Million overnight stays 2020: 2 Million (DZT)

2001: DZT Office in Beijing2002: ADS Status to Germany

After 2003: Euphoria and disappointment phase 2014: Optimism about the future development

Chinese tourists’ arrivals to hotels and similar accommodations in Germany, in million, and CAGR from 2001 – 2012Note: This figures include Mainland and Hong Kong Chinese(Berenice Pendzialek, 2014 adapted from GNTB 2010-2013)

Top 8 German Cities for Chinese

Munich, 11.7%1

Frankfurt, 11.5%

2

Berlin, 9.8%3

Cologne, 3.8% 4

Hamburg, 3.3%5

Düsseldorf, 2.9% 6

Füssen, 1.9%8

Stuttgart, 2.9% 7

Chinese overnight stays, distributed in main cities by % of total, 2012. (Pendzialek, 2014 adapted from GNTB, 2013)

Chinese Overnight Stays

2012: 51,099

2013: 54,400

“Hamburg Summit: China meets

Europe“ October 2014

Source cities - regions Shanghai, Beijing, Guangzhou

Travel purpose & average length of stay

Holidays (52%) 7 Nights,Business (48%) 6 NightsVFR – others (1%) 10 Nights

Most important type of holiday Touring trips and city holidays

Seasons May – August (47%) January – April (44%) Golden Week 1Sep – Dec (20%) Golden Week 2

Profile Male, average age 36 years, White-Collar, well-educated, high-earning

Source: Pendzialek, 2014 adapted from DZT)

2013

4) Many start their travel careers by being part of an organized group

• 70% of the market

• First-timers, not much experience

• Focus on service

• ADS Visa

• Motto“The more the merrier”

• Activities:Entertainment, nature and shopping

• Subgroups: Young Chinese Families Business People Family and Friends

Visitors

Chinese Trail around Europe欧洲10国12日全景游 A线BIG EUROPE TOUR A

1

出发点DEUTSCHLAND

特里尔TRIER

卢森堡LUXEMBURG

2

卢森堡LUXEMBURG -

巴黎PARIS

3

巴黎PARIS

4

巴黎PARIS

布鲁塞尔BRÜSSEL

阿姆斯特丹AMSTERDAM

5

阿姆斯特丹AMSTERDAM

科隆KÖLN

法兰克福FRANKFURT

6

法兰克福FRANKFURT

茵斯布鲁克INNSBRUCK

7

茵斯布鲁克INNSBRUCK

威尼斯VENEDIG

8

威尼斯VENEDIG

佛罗伦萨FLORENZ

罗马ROM

9

罗马ROM

梵蒂冈VATIKAN

10

罗马ROM

比萨PISA

米兰MAILAND

11

米兰MAILAND

苏黎世ZÜRICH

12

苏黎世ZÜRICK

德国DEUTSCHLAND

Source: pandareisen.de

(Source: UNWTO, 2013Photos: Pendzialek, 2014)

Wenyi YouthBohemian and dreamy

behaviour

Experienced-centredCuriosity

Planning is fun

HedonistsPleasure, Shopping

ConnoisseursAesthetics and Knowledge

5) Increasingly moving from mass to individual: Self-organised travellers

Second Wave of COT: Post-80s Generation, experienced, search for culture and understandingof a destination

Motivations for Travel

1) Social Capital & Personal Prestige

2) Education & Knowledge

3) Scape from the everyday life

4) Soft Power

5) Business Opportunities

6) Internet is present at every point of their journey

83% went online usinga mobile device

632 million internet users by June 2014

(Source: DJ, 2014)

95% Chinese netizens trust a brand they have seen before on social media channels

Strong digital influence before travelling

http://www.visitcopenhagen.cn/

Important to be present across multiple channels

Complicated visa applicationNo contact with local people No free internet connection

7) They are quite happy with Europe´s clean sky, but still more can be improved

(Source: Pendzialek, 2014 & ETC, 2014)

ETC, 2014

8) They expect tourism offers, which keep the balance between treating them as international citizens and showing respect to Chinese culture

Chinese language information

(Source: Chinavia, 2014, © Ratermann, 2014)

• Signs, collateral materials, websites…

• Chinese speaker staff memberFrankfurt „Personal Shopper“

• Phrasebooks

• Welcome letters

Chinese payment methods

Foto: DJ, 2014

QR Code Mania Maybe in some near future in Europe too

80% of Chinese outbound tourists paid via China UnionPay Network in 2013

Future Perspectives

- Attraction of other than just first-time travellers

- Visa application process

- Lower economic growth, but no direct effect on COT so far

- Anti-corruption campaigns do not target COT

- Further Segmentation

Groups: Smaller groups, Away from the poor quality image, from many countries to a few, or sometimes even one

Self-organised: Further expanding their travel careers and looking for differentiation

- Increasing interest on:

Cruise Tourism / Island Tourism/ Weddings & Honeymoons Health Tourism / Space Tourism

Perspectives 2015

Thanks for your attention!Questions?