你好 – Nǐhǎo – good afternoon!
In this post I would like to introduce you to the Chinese tourism industry.
Of course, the question immediately arises here whether the country is worth a visit at all and thus offers tourism sufficient potential.
Do cultural treasures exist, an interesting history and a nature worth seeing? Are there impressive buildings and sufficient leisure activities? What is the level of comfort on site, is there a sufficient selection of Western-style hotels, can you eat everything? Is the country safe?
To anticipate it straight away – from my own experience I can answer all questions positively.
Corona virus and protests in Hong Kong
However, there are currently no assessable effects due to the Corona virus that broke out in December 2019. In the short term, this will presumably lead to enormous drops in tourist activities. As early as 2003, China was severely affected by the SARS outbreak.
Local protests in Hong Kong also have a negative impact on the country and tourism. I myself canceled a trip to the city last September due to security concerns.
However, some locals assure that the media coverage is significantly oversubscribed. A trip to Hong Kong is still possible without hesitation, as long as you stay away from the protests, which are held in few places in the city.
Fascination with China
Regardless of the current events, in my opinion the Middle Kingdom will always be worth a trip for millions of people.
China – for me personally that is the fascination with a distant world, which can still be easily reached in about ten hours of flight time. It is the attraction of the diversity of a millennia-old Confucian culture and changing history. A story with many upheavals and declines along numerous dynasties up to the founding of the People’s Republic of China in 1949. Remarkable is the unprecedented rise from poverty and technological dependence that has taken place since the 1970s through enormous economic growth and our own drive for innovation.
China offers mega cities like Beijing or Shanghai. The capital in particular is bursting with historical and cultural treasures. The famous terracotta army can be visited in Xi’an.
From snow-capped mountain peaks to sunny beaches, dense forests and hot deserts, everything our earth has to offer is represented in the landscape. The karst mountains in Guillin are one of the most impressive mountain formations in the world.
The Middle Kingdom is the only country in Chengdu to house the giant panda and also some remarkable nature reserves.
To reaffirm my fascination, I have included a short video that takes you on a short trip through the country. If you want to learn more, I recommend reading my article about the culture and society of the country.
The growth of the Chinese tourism industry
Since the beginning of the reforms and the opening of the country under Deng Xiaoping in the 1980s, Chinese tourism has grown significantly. The travel boom was fueled by the emergence of a wealthy and growing middle class and by the relaxation of movement restrictions for local and foreign visitors. In 2018 alone, tourism grew by 11%.
The industry already contributed $ 419 billion, or 2.1%, to China’s gross domestic product (GDP) in 2018 and provided around 22.5 million jobs. By 2028, this value added is expected to double to $ 804 billion. Tourism thus makes an important contribution to the domestic economy in China.
The impact of tourism on the labor market in China is even greater if indirect employment is taken into account. Then more than 65 million people are indirectly employed in the tourism sector. The number of 30,000 travel agencies across the country alone illustrates the importance of the industry.
The Chinese tourism industry benefits from the fact that, on the one hand, the country is becoming more and more attractive for foreign tourists and, on the other hand, more and more Chinese are visiting their own country and abroad.
The number of private Chinese trips abroad rose from 40 million in 2008 to 155 million in 2018 – a fourfold increase in 10 years!
These overseas travelers spent $ 277 billion on Chinese tourists around the world in 2018 alone (for comparison, German overseas travelers spent $ 88 billion). The Chinese are already the most dominant tourist group in some regions of the world. Anyone who has ever visited Neuschwanstein Castle in Bavaria understands what I mean.
About two thirds of all Chinese trips abroad go to Asia. Taiwan, South Korea, Thailand and Japan are at the top of the wish list. Travel to the USA follows in 5th place.
The most popular travel destinations in Europe are Germany, Switzerland, France, Spain and Austria.
Chinese airport operators and airlines in particular are benefiting from this boom in international travel. (More on this in my post about the new capital airport Daixing)
The following graphic shows that the number of flight routes has doubled in the past 5 years in order to meet increasing demand and passenger volume.
However, the Chinese also like to explore their own country. The number of domestic tourists is enormous, especially during the Golden Week, the non-working week at the beginning of October after the national holiday.
In 2018, more than 4 billion domestic trips were made by the locals. Chinese tourists spent a total of $ 739 billion on this. So an average of $ 185 per trip.
But international guests are also spending more and more money in China. In 2018, approximately 63 million people visited China and were willing to spend more than $ 40 billion on it. That’s an average of $ 634 per person.
If the Chinese spent half as much money on travel as foreign tourists, total spending would increase by more than 70% to $ 1,256 billion.
Since accommodation and meals in China have so far been very cheap (e.g. dinner for two in normal restaurants between $ 10-15), there is still enormous price increase potential.
Trip.com – profiteer of online travel business?
The number of trips booked via the Internet in China is growing at around 20% annually.
Trip.com Group Ltd. (formerly Ctrip) in particular is likely to benefit. The company is a leading Chinese travel service provider and one of the largest travel companies in the world. The company’s two main platforms are Trip.com and Skyscanner.
While Trip.com is still relatively unknown in Europe, most people are familiar with Skyscanner. Nevertheless, I would like to briefly introduce both platforms:
Trip.com is an online travel agency that offers travel services in 19 languages and on 23 local websites.
Skyscanner is a world-leading travel search website that offers products in over 30 languages and 70 currencies.
The company’s platforms list more than 1.4 million hotels and hostels as well as more than 1.2 million vacation rentals from around the world (especially China).
It also offers ticketing services, i.e. the mediation of flight, train, bus tickets and other transport services. The platforms include more than 2 million global flight routes connecting over 5,000 cities in over 200 countries and areas.
In addition, vacation packages can be purchased, such as guided tours, insurance, visa services, tickets for attractions and local activities that cover more than 3,000 destinations in more than 160 countries and areas.
The following advertising film from Trip.com shows how emotional the topic of travel is for the Chinese and how cleverly the company markets itself.
In short, Trip.com can be called the Chinese Booking.com. The mobile app has more than 600 million downloads. Sales in the third quarter of 2019 increased by 12% compared to the previous year. The operating margin was 21% in the third quarter of 2019, compared to 16% in the same period in 2018.
Domestic competitors include Quanar and eLong. However, market leader Trip.com has already invested in both. In addition, there is Alitrip from Alibaba and the well-known international competitors, especially Booking and Expedia.
I will analyze Trip.com in more detail in a separate post in the future.
Sources & Links: