The smart way to travel
Mobile Internet and apps have helped to fuel China’s outbound tourism boom, report Li Jing and Yang Feiyue.
For an adventurous traveler like Chen Yu, deciding where to go on holiday used to involve hours of scouring guidebooks for tips on attractions, decent hotels and how to get around in a foreign land.
“Now all I need is my smartphone,” said the 35-year-old from Beijing.
The rapid advance in technology in recent years means even cheap mobile phones are effectively palm-top computers, giving users instant access to real-time information on almost any topic.
Avid travelers are among the biggest beneficiaries of this technological revolution — they can now book flights and hotels in an instant, use digital wallets to buy souvenirs, post reviews on the fly, and download apps that offer detailed maps and guides of far-flung places, all in their native language.
The development in mobile Internet has undoubtedly contributed to the boom in China’s outbound tourism, which led to the country becoming the world’s biggest source of tourists in 2012.
According to official data, Chinese tourists were expected to make 120 million trips abroad in 2015. That would be an increase of 16 percent year-on-year.
Bank of America Merrill Lynch has estimated the number could reach 174 million by 2019, with tourist spending increasing to $264 billion.
“Technological advances have been the key, as the Internet has reduced travel costs and made exotic destinations more viable (for Chinese tourists),” said Zhu Zhengyu, an analyst at Analysys International. “It has also led to more Chinese traveling independently rather than in groups.” And it’s not just tourists who have benefited; travel agencies have also been able to reduce costs, while tech firms have latched on to the opportunities created by a fast-growing market.
“The Internet has allowed travel agencies to close brickand-mortar offices, cut out the intermediary and gain easier access to target customers,” Zhu said. “Since 2014 many companies have also launched smartphone apps aimed at Chinese travelers, providing services like car rental and restaurant reviews, which removes the language barrier and facilitates independent travel.”
In fact, despite China coming late to the Internet, studies suggest the nation’s tourists are now the most connected in the world. The Chinese International Travel Monitor, compiled by online booking agency hotel. com, said at least half of tourists arranged a holiday through a smartphone app last year, up 17 percent year-on-year.
In December, TripBarometer, the research arm of TripAdvisor, also released its 2016 Travel Trends. The report includes a poll of 44,000 global travelers that found 75 percent now see mobile devices as the most essential item for a holiday, overtaking toiletries. Among the Chinese respondents, the figure was 87 percent.
Tech companies have been quick to see the potential in China’s outbound tourism market.
One example is Yidao Yongche, an Uber-like app that provides Chinese-speaking drivers to Chinese travelers in 25 cities. Launched as a car rental website in 2010, the company shifted focus when mobile Internet devices started to become popular in China.
“Most Chinese don’t speak English, so they find it difficult to communicate with foreign drivers after they land in another country,” said founder and chief executive Zhou Hang. “We have Chinese-speaking drivers in the US and other places to make it stress free.” China is also arguably the most competitive market for websites and apps that allow tourists to post reviews and swap travel stories.
TripAdvisor is the biggest player in the West and beyond. Yet in China, local rivals such as Mafengwo and Qyer are providing stiff competition.
Founded in 2010, Mafengwo is a major tourist informationsharing website and has invested heavily in its mobile Internet services. The company said its app, launched last year, has been downloaded 280 million times and has more than 80 million active users.
Shanghai-based Dianping, a business listings website similar to Yelp, has extended its reach to 860 cities in more than 200 countries and regions overseas.
Thanks to the technology, industry insiders and analysts see no slowdown ahead for the growth in outbound tourism in China. By 2020, the annual number of Chinese visitors to the US is forecast to double to 4 million, according to the US National Travel and Tourism Office.
“Undoubtedly, 2015 will mark the fourth consecutive year of China as the world’s top source for tourists,” said Jiang Yiyi, director of the International Tourism Development Institute.
“The major reason for the growth lies in the policy changes that began in 1997 to allow Chinese to travel abroad, which unleashed high demand for overseas travel. Since then, increased disposable incomes, extended national holidays, relaxed visa restrictions for Chinese travelers and the rising value of the renminbi (China’s currency) have all contributed to the boom,” she said.
Some have compared the current trend to when Japanese tourists began going abroad three decades ago. From the mid-1980s through to the 1990s, the number of Japanese heading overseas swelled from 4 million to 16 million, while at the same time the nation’s per capita GDP rose from $10,000 to $35,000.
Jiang agreed there are common features to these trends, such as a surging economy, rising currency valuation and a trade surplus. However, unlike Japan, she said China has not officially encouraged outbound travel as a way to balance its trade deficit, although it has had an effect.
One big difference is the sheer number of Chinese tourists. According to the Bank of America Merrill Lynch report, the current trend “is going to be bigger and will last longer given China’s population of 1.3 billion versus Japan’s population of 127 million”.
Chinese travelers are already seen as the world’s biggest spenders. In 2014 they spent a total of $164.8 billion, according to the China Tourism Academy, a government research institute. Almost 90 percent of that was spent shopping.
Of course, the slowdown in the Chinese economy has led to concern in places that have come to rely on Chinese tourist spending. Yet Jiang remains confident. “As tourism is discretionary consumer spending, it is relevant, yet not closely linked to, the country’s GDP. But even though there will be a slowdown in GDP growth, you’re still going to see more tourists and you’re still going to see increased spending.”
She said her confidence comes partly from the fact that less than 10 percent of Chinese mainlanders have passports and “only 49 countries and regions have so far granted Chinese citizens visa-free or visa-on-arrival access”. It means the market still has a lot of growth potential, which can be unlocked by more flights to various destinations and relaxed visa policies.
Data from OAG, which compiles air travel intelligence, show 298,353 scheduled domestic and international flights left Chinese airports in November, with capacity on international flights up 20 percent year-on-year. The figures highlight strong growth in several smaller markets, as Chinese and foreign carriers compete to serve outbound Chinese travelers.
Meanwhile, the US, Canada and the UK have all introduced extended multiple-entry visas, “which will definitely further encourage long-haul travel among Chinese tourists”, Jiang added.
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Many Chinese tourists travel abroad for holidays. The development in mobile Internet has contributed to the boom in outbound tourism.
Mobile Internet development contributes to the boom in China’s outbound tourism.