Report

Ahoy! Here comes the Chinese global tourist

​As China continues to grow, it will transition from the middle income country bracket to high income bracket. The explosive growth of China’s economy will lead to sweeping economic changes and social transformation in the country.

An increasing amount of Chinese will travel overseas, as they endeavour to discover new places, explore different cultures and seek new adventures. The burgeoning Chinese travelling class is driven by two major forces – the significant expansion of the middle class and increasing affordability of international travel. This democratisation of travel has led to a profound increase in China’s tourism spending.

Overseas travel has become an essential part of the lifestyle of people belonging to medium and high-end families in China. More than 70% Chinese tourists travel abroad at least once a year. Active outbound tourists who prefer to go abroad several times annually account for 37% of the total.

Chinese have emerged as major consumers abroad. They account for 26% of luxury goods sold in Hong Kong and Macau, while they accounted for 23% and 10% of luxury goods sold in Europe and US, respectively. In 2015, in terms of per capita spend, Chinese travellers ranked among the top three spenders.

Historically, low incomes and travel restrictions have tempered Chinese demand for long-haul travel and skewed Chinese outbound travel toward short-haul destinations. However, increasingly there is shift towards long haul travel. In the next ten years, seven of the top ten destinations of the Chinese tourist in per-trip spending terms, will be long-haul destinations

Sightseeing is the primary purpose of Chinese outbound tourists, followed by leisure travel. Also, the preference varies according to the profile of the tourists. Tourists in groups travel mainly for sightseeing while solo tourists travel for leisure and shopping time. Also, tourists with higher monthly incomes take overseas trips mainly for leisure time and shopping.

Destination also influences tourist behavior. Chinese tourists in Japan and South Korea spend the most on shopping, while travel and entertainment dominate the spending of those in Southeast Asia. In Europe and US most of the money is spent on lodging, tickets, luxury goods and souvenirs.

However, the full potential of Chinese outbound market can be unlocked if the ease of entry increases. Most Chinese travelers cited visa applications as the greatest impediment to overseas travel. Countries and cities can increase the inflow of Chinese tourists beyond the normal gains arising from GDP and income growth by eliminating or easing barriers to entry, through visa reforms or non-visa facilitation measures. We believe the ease of obtaining a visa, along with pricing differences, will be the two key drivers of rise in tourist numbers

A number of countries – from Japan, Korea to UK, Germany France and US – are relaxing visa requirements for Chinese tourists, in order to boost the number of tourist arrivals. As average income increases in China and its middle class expands, expected growth in the long-haul share of total outbound travel from China would likely be amplified if more facilitative visa policies were enacted by these destinations.

The premium as well as the mass, the established as well as the upcoming, none of the tourists destinations can afford to neglect the Chinese traveller. Not only is the global Chinese tourist the largest in quantitative terms, he outspends tourists of other nationalities too. Destinations can afford to overlook the new age Chinese traveller at their own peril. The report makes a case for destination countries and cities to woo the Chinese traveller by aggressively marketing themselves, offering tailor-made solutions and easing entry barriers. 

Provider
AMC Wanhai Securities Ltd.
AMC Wanhai Securities Ltd.

AMC Wanhai Securities is an independent boutique brokerage covering Hong Kong & Asian listed equities for global institutional cilents. The company focuses on equity sales & trading, equity research, asset management and corporate finance.

AMC Wanhai Securities will give you a snapshot of stocks from across a range of sectors, with ratings and recommendations that will help you make tactical investment decisions. Additionally, we issue sector / thematic report providing deeper insights into wider trends and business drivers.

Other Reports from AMC Wanhai Securities Ltd.

ResearchPool Subscriptions

Get the most out of your insights

Get in touch