Money follows flow of outbound travel

The surge in Chinese outbound tourism is boosting domestic companies' overseas acquisitions in travel industry.

As more high-spending Chinese visitors go abroad, they become a lucrative source of business for hotels, restaurants, retailers and destinations.

China has been the world's largest outbound travel market since 2012, according to the United Nations World Tourism Organization.

In 2014, Chinese outbound tourism rose 19.5 percent to 109 million departures. The number was only about 10 million in 2000, the China National Tourism Administration said. Chinese tourists spent almost $163 billion on overseas shopping last year.

Some 174 million Chinese tourists are expected to spend $264 billion by 2019, according to a forecast by Bank of America Merrill Lynch.

In view of the Chinese visitors' huge impact on the global hospitality and travel industry, Chinese companies that have money and ambitions want a piece of the action. They would like to work together with partners in Europe or the United States, which have long histories and plentiful experience, to capitalize on the Chinese international tourism market.

Companies from the mainland believe that China's money plus Western tourism companies' reputation and management will create a win-win situation. And Chinese companies have ideas and resources to attract more Chinese visitors.

A recent case was Shanghai-based Fosun International Ltd, which bought a 5 percent stake in United Kingdom-based holiday group Thomas Cook Group Plc for 91.9 million pounds ($140.12 million) as part of a broader expansion into Europe's tourism sector.

Fosun International plans to double its initial investment in the 174-year-old package holiday specialist to 10 percent "over time".

The Chinese government has relaxed its grip on outbound direct investment as domestic enterprises begin to invest heavily abroad.

The State Council, China's cabinet, on Nov 18 released a shortened list of ODI projects needing government approval. Some 99 percent of the categories on the original list were eliminated, and now only a simple registration is required.

As Chinese outbound travel rises, Chinese companies' investment in the overseas travel sector is set to continue in the coming years.

Contact the writer at zhangchunyan@chinadaily.com.cn