Outbound travelling jumps 50-fold in 20 years
By Jiao Xiaoyang (China Daily)
Updated: 2006-02-04 07:16

For decades, Chinese greeted each other by asking: "Have you eaten?" a custom rooted in the country's time-honoured food culture. In recent years those getting richer started to ask: "Have you bought a new home (or a car)?"

Today, a more common daily greeting has come into vogue: "Have you been playing abroad?"

Chinese citizens made 25.76 million outbound trips in the first 10 months of 2005, an 8.3-per-cent growth year-on-year, according to the National Tourism Administration (NTA).

Compared with 20 years ago, the number of citizens going abroad with a private passport has jumped 50-fold.

The World Tourism Organization predicts China will become the world's fourth-largest source of outbound tourists by 2020 with more than 100 million people travelling abroad each year.

What makes Chinese tourists special is not only the number, but also their spending. In a December analysis, investment banking and management firm Goldman Sachs said strong demand from China and increased international travel by the Chinese could combine to add US$355 billion to its estimate of the luxury goods industry's medium-term revenue growth.

The amount spent by the average Chinese tourist "is already on a par with, if not slightly higher than, that of the Japanese," Goldman Sachs said in the report.

With growing private income and an increasing number of overseas destinations open to Chinese tourists, outbound travel is becoming part of many Chinese people's lives.

In 1997, when the government approved the first batch of outbound private travel destinations including Thailand, Singapore, Malaysia, the Philippines, and the Hong Kong and Macao special administrative regions 5.32 million trips were made in that year.

The number became 16.6 million in 2002, 20.22 million in 2003 (despite the SARS epidemic) and 28.85 million in 2004, according to the NTA. The number of approved destinations (countries and regions) had reached 76 by the end of October 2005.

"Southeast Asia is the most popular destination as a majority of our customers choose to go there," said Li Weimin, press manager with Shanghai's Spring International Travel Agency.

He attributed the boom of Southeast Asian routes to proximity, relatively low cost, balmy coastal weather, and in many cases, the availability of Chinese language services.

"These routes are really hot, and it seems no matter how many airplane seats we book, we can sell them to that number of tourists," Li said.

According to a survey released at the International Forum on Chinese Outbound Tourism hosted by the Beijing Tourism Administration in November, most Chinese outbound tourists do not travel too far away. It said Asian countries and regions account for 90.4 per cent of Chinese outbound travellers, and eight of the top 10 outbound destinations of Chinese tourists are in Asia.

But destinations on other continents are catching up.

"There are more and more high-income customers who have been to the Asian destinations and are willing to see different places," said Sun Changwei, general manager of the outbound department of China Youth Travel Service (CYTS).

"The number of visitors to rich countries such as Britain and Australia is on the rise, and I think there is still big potential." He added that tours to new destinations contributed significantly to the 20-30 per cent yearly growth in CYTS' outbound travel business.

Coupled with the zeal to go is the zeal to buy. According to Global Refund, an international tax refund service, Chinese recorded a growth of 41 per cent in tax-free retail spending from January to November 2005 compared with the same period in 2003.

Germany makes up the lion's share of Chinese tourists' shopping in Europe, as they spent about US$60 million from September 2004 to September 2005, followed by Italy, Britain, Austria, the Netherlands, Denmark, Sweden and Switzerland, Global Refund figures showed.

"We discovered that many of our customers, after paying for the tour package that accounts for 30-50 per cent of their budgets, would spend most of the money on shopping, which is quite different to Western tourists' habit of spending on accommodations and services," Sun said.

Travel professionals say there are many reasons for the Chinese outbound tourists' shopping sprees.

"If you look at some ordinary products in a foreign shop, you will probably find a 'made in China' tag. There are not many things worth buying except for those top luxury brands," said Liu Yang, an outbound tour manager with the Beijing CITIC Travel Co Ltd.

The tax differential between buying overseas versus on the mainland is also an incentive for Chinese tourists who go shopping, Li noted. The price of a Louis Vuitton purse on the mainland can be 20 per cent higher than in Europe and 10 per cent higher than in Hong Kong.

Fashion accounted for 30 per cent of Chinese tourists' shopping expenditures in Europe, followed by jewellery and watches, and then souvenirs, leather products, perfumes and cosmetics, according to a Global Refund report. Louis Vuitton, Armani, and Zegna are the favourite fashion brands of Chinese tourists, while Cartier and Mont Blanc make their favourite accessories.

"To most Chinese, the chance to travel abroad is rare, so when they get there, they want to buy something as a memento or something they can show off to their families and friends," said Song Rui, a researcher on tourism with the Chinese Academy of Social Sciences.

"There are business travellers who have their accommodations paid by others, which gives them a bigger budget to buy things, and there are tourists who have to select things for their friends at home," Song said.

However, some travel professionals say they are seeing evidence that the nouveau-riche spending image of Chinese tourists is gradually changing.

"There is an increasing number of customers who don't like the tours with heavy itineraries and more and more are favouring the ones that give them more free time to see and taste," said Liu, of Beijing CITIC Travel.

His company recently launched a new week-long tour of Japan offering business-class cabins or five-star accommodations, with arrangements of communication with local people and no shopping recommendations. The tour costs around US$2,000, double the price of the average sightseeing tour that does include many shopping stops in Tokyo. The new tour is selling well, Liu said.

"Most of those who choose it have had many overseas experiences already and do not care much about shopping and taking photos any more," he said. "They are more interested in spending time to see the heritage thoroughly, feel the Japanese culture and chat with local people."

Shanghai's Spring International is another agency that is adjusting its itineraries to changing tastes. It recently promoted a 10-day tour to France and Italy in contrast to the traditional European routes, which may cover seven or eight countries in a week.

"More and more outbound travellers don't want to travel for travel's sake; they want more leisure and fun," said Li, of Spring International. "The nouveau-riche style of travel with heavy schedules and extravagant shopping will go out of date someday."

(China Daily 02/04/2006 page3)