Trip advisors
Chinese tourists are reshaping the global tourism industry and impacting the world economy, not only with their money, but also with their habits - and tour operators are responding
For countries keen to boost their tourism industries, China is the single largest source of international tourists and the most significant source of tourism expenditure, with 130 million tourists a year who spend some US$115 billion on their trips. China is already the largest source of inbound tourists for 10 countries, including Thailand, Japan, South Korea, Vietnam, Cambodia, Russia, Maldives, Indonesia and South Africa.
These smartphone-addicted, spend-happy tourists are changing the global tourism industry and rewriting the rules. Whether destinations are ready or not, Chinese tourists are already on the road and they are going further and faster.
Gold Rush
“Chinese tourists are the most powerful single source of change in the tourism industry,” Taleb Rifai, secretary general of the UN World Tourism Organization (UNWTO), told the South China Morning Post in October 2017.
Last year, Thailand and Japan remained the two hottest
destinations, attracting 9.8 million and 7.35 million tourists from the Chinese mainland.
Dark horse destinations such as Morocco, Turkey, Tunisia, Russia, the Czech Republic, Germany, Spain, the UAE, the UK and Iceland have also seen a dramatic surge in Chinese visitor numbers.
More direct air links, fewer visa restrictions and targeted marketing have driven visitor numbers. Since King Mohammed VI of Morocco decided to grant Chinese citizens visa-free access from June 2016, tourist numbers have seen remarkable growth. Khalid Fathi, chief representative of the Moroccan tourist office in China, said some 118,000 Chinese tourists visited Morocco in 2017 – quite a boost, when it used to average no more than 20,000 each year.
To stand out from the fiercely competitive environment, industry players have begun to be more creative with their approaches to target Chinese tourists through marketing campaigns and ads.
From employing Chinese-speaking staff, offering in-room electronic kettles, providing Chinese rice porridge for breakfast and slippers in their rooms, to providing rooms with Chinese lucky numbers like six, eight or nine, while avoiding the number four, a homophone for death, a growing number of hoteliers are providing small yet significant changes to cater to Chinese visitors' specific customs and cultural tastes.
Destinations also utilize China's powerful fan economy to leverage China's massive youth market. In May 2017, Denmark appointed 17-year-old Jackson Yi from the hugely popular Chinese teen band Tfboys as Danish tourism ambassador to China, a smart move to attract Chinese youngsters.
The band has more than 13 million fans, nearly three times that of Denmark's own population. Most were born post 1990, and compared with other demographics, Chinese millennials are better educated, more technology-savvy and proficient in English, possess strong spending power and tend to travel independently.
In 2016, Switzerland appointed the popular actor Huang Xuan as its tourism ambassador to China, and recently the British Tourism Bureau named famous Chinese actress Angelababy (Angela Yeung Wing) as its goodwill ambassador.
Australia has pushed hard to get a slice of the action. China is Australia's second-largest visitor market with more than 1.2 million Chinese tourists visiting in 2017. The Australia China Business Council forecasts that total Chinese visitor numbers to Australia are set to more than triple to 3.3 million a year by 2026.
China is already the largest source of tourist expenditure, pumping a record A$10.4 billion (US$8.17 billion) into the economy, a 14 percent increase from 2016. In the Australian luxury market, industry insiders estimate Chinese shoppers are responsible for at least twothirds of sales.
“The current Chinese tourism boom in Australia is the result of six years of efforts by Australia,” said Tan Zhuo, who has been involved in tourism marketing for nine years, with a focus on Australia and the US.
“Compared to other countries, Australia has spared no expense in developing its inbound Chinese market. It has seen how the enormous spending power of Chinese visitors has boosted its economy, so it's very willing to spend the big bucks on the Chinese market. That forms a virtuous circle,” Tan told Newschina.
The rise of the Chinese tourism market in Australia, Tan stressed, was fueled by an increase in the number of direct flights in recent years, which started in 2011. Before then, only the major Chinese metropolises of Beijing, Shanghai and Guangzhou had direct access. Now tourists can fly directly to Australia from 18 different cities, and many of these new flights depart from second-tier cities such as Kunming, Qingdao, Changsha, Fuzhou and Xi'an.
Since 2011, direct aviation capacity has doubled, with annual capacity of around 1.5 million seats in April 2017, a 76-percent increase on 2013 capacity.
“I've seen how the Australian market was established in China bit by bit. Marketers have done an enormous amount of research on routes, aircraft types and capacity,” Tan said.
“To mature a market takes a long time – five or six years perhaps, but a market can be frozen in a very short time,” she added.
South Korea, once one of the most sought-after destinations for Chinese tourists, has been struggling in the last 12 months or so following a downturn in the overall Sino-south Korean diplomatic relationship. This was sparked by Seoul's decision in March 2017 to install a US anti-missile battery, the Terminal High Altitude Area Defense (THAAD), to counter North Korean nuclear threats. China saw this as a threat to its own and to regional security.
As part of the fallout from this decision, the China National Tourism Administration banned package tours to South Korea, although it put no restrictions on individual travelers. The restriction was lifted in November 2017 after the two countries issued statements in October on their mutual desires to improve relations.
In 2017, South Korea received 4.2 million Chinese visitors, down 48.3 percent on the precious year, according to data from the Korea Tourism Organization. The Bank of Korea said in December that South Korea suffered a loss of 5 trillion won (US$4.7 billion) in 2017 due to the declining number of Chinese tourists.
“Being chopped in half at the waist,” a term that refers to an ancient Chinese method of execution, was used by media and industry players to describe the devastating loss in tourism revenue that South Korea experienced.
Tan also expressed her worries over the Chinese and American tourist industries under the shadow of a trade war.
“The strained bilateral relationship and more restrictive visa policies will inevitably impact tourists' choices. We are not quite sure where the situation will lead,” she said.
Cashless Revolution
E-commerce, an important slice of China's economy, has been spread by Chinese tourists to the world.
Chinese people are leading a cashless lifestyle as the use of mobile payment has spread like wildfire across the country. The advantages of this new payment method are obvious: it is quick, easy and convenient, with no need to calculate change or exchange foreign currencies.
Of the world's major economies, China is light years ahead in the online payment revolution. Some businesses now refuse cash payments, or struggle to make change. You are more likely to be asked if you want to use the leading mobile payment systems, Alipay or Wechat Pay. Even pedicab drivers will take electronic payments and street artists have a QR code for donations.
Mobile payments in China hit 81 trillion yuan (US$12.8 trillion) for the first 10 months of 2017, nearly 40 percent more than the whole of the previous year, according to the latest official figures from the Ministry of Industry and Information Technology. The latest tally dwarfed the estimated US$49.3 billion in total mobile payment transactions in the US, data from emarketer shows.
Now the boom in Chinese tourism has expanded the cashless lifestyle to the world.
According to the Outbound Chinese Tourism and Consumption Trends: 2017 Survey, issued by Nielsen and Alipay, 65 percent of outbound Chinese tourists have already used mobile payments while traveling abroad, six times that of non-chinese tourists (11 percent).
Ninety percent of Chinese tourists would use mobile payment overseas if given the option, and 91 percent said that this might increase their desire to purchase more goods or services.
“China has embraced mobile payments faster than any other country, and will continue to lead the global charge in this regard. Mobile payment is on the rise globally, and will continue to support greater connectivity and efficiency across the commercial ecosystem,” said Vishal Bali, Managing Director of Nielsen China.
Alipay, the world's leading digital payment platform operated by Ant Financial Services Group, a division of tech behemoth Alibaba, has been expanding aggressively. Now it has been adopted by millions of retailers, restaurants, supermarkets, convenience stores and dutyfree stores in 40 countries and territories, including the US, Europe, Japan, South Korea, Australia, New Zealand and Singapore.
Alipay has become available as a payment method for about 35,000 North American merchants. Tens of thousands of cabs in New York City and Las Vegas accept Alipay. Finland is an increasingly popular destination for Chinese tourists and became the first country to offer Chinese tourists an entirely cashless experience when they visit.
“The boom in American outbound tourism brought about the era of the Visa credit card, and now China is pioneering the new era of mobile payments. The impact of China's cashless lifestyle on the world is revolutionary,” Zhao Ping, director of the department of international trade research at the China Council for the Promotion of International Trade, told the Global Times.
Ready or Not?
Many countries have put tourism at the heart of their economic growth strategy, eyeing the lucrative Chinese market. But are destina- tions ready for the influx of Chinese tourists?
In 2017, the number of Chinese mainland travelers to Japan grew 15 percent to 7.35 million, with total spending of 1.69 trillion yen (US$16.9 billion), up 14.9 percent from 2016, according to the Japan Tourism Agency.
However, a growing number of Japanese residents have expressed concerns at the potential impact on communities that are not used to overwhelming numbers of visitors, especially in top destinations like Tokyo and Kyoto.
“The quality of customer service in Japan is on the decline,” Noriko Ito, 29, told Newschina. Ito, who can speak Chinese quite well, used to work in Isetan Shinjuku, one of the trendiest department stores in Tokyo, and currently works in a law firm. “In Tokyo, the more Chinese tourists there are, the worse the quality of customer service will be,” she said.
Ito shared an experience she had while shopping at the Albian counter, a Japanese high-end skincare brand, at the Mitsukoshi Ginza Department Store. She said she was shocked by how coldly the shop assistant was treating Chinese customers.
“The assistant spoke to them in a very cold and rigid tone, never smiling – that's really very unethical in Japan; but when she turned to me, she immediately recovered her Japanese style of hospitality and courtesy,” Ito said.
Japan is usually famed for its impeccable customer service, where respect, courtesy and hospitality are highlighted in many areas in dayto-day life, and even fishmongers treat customers like a god. “Japanese are super fussy about service quality. After all, it's part of our culture,” Ito said.
The spending power of Chinese tourists in Japan is so impressive
that a new Japanese term, “bakugai,” which means “explosive buying,” has been introduced to describe Chinese tourists' frenzy for shopping. Many Tokyo department stores have hired Chinese-speaking staff to cater to the influx.
“I feel very bad about what I saw,” she continued, “On the one hand, I want to question the staff, ‘Where is your Japanese spirit of service gone? You're not showing respect. You're discriminating against Chinese tourists!' On the other, I quite understand them, because for service providers in our country, the influx of Chinese tourists is too overwhelming to cope with.”
“Now locals [in Tokyo] will not buy cosmetics or luxury goods in Ginza or buy electronic devices in Akihabara. There are Chinese tourists everywhere. We have to wait for half an hour to buy something,” Ito told our reporter. Ginza is like Fifth Avenue in New York City, famous for high-end shopping, and Akihabara is Japan's popular culture and electronic shopping district.
“The service providers have very complicated feelings. They dislike Chinese, but they depend on them,” she added.
An article in the Asahi Shimbun newspaper in June 2017 claimed that “crowds, unknown neighbors and unruly behavior” have damaged life for Kyoto residents, as mass tourism has resulted in issues such as crowded transportation, scarcity of hotel rooms and a deterioration in urban sanitation.
Thailand, the top destination for Chinese outbound tourists, has seen its share of controversy. The large number of inbound tourists puts significant strain on air and road infrastructure. Locals in hot destinations like Bangkok and Chiang Mai must deal with crowded streets, long lines and shortages of accommodation.
Other countries are also feeling the pressure. Australia, for instance, is still not ready for the massive Chinese tourism boom, although China is already on its way to end the two-decade reign of New Zealand as the top source market of tourists for Australia.
“We're not really ready. We've had issues with Chinese New Year when you get 150,000 or 200,000 tourists and the hotels struggle,” said John Brumby, President of the Australia China Business Council and the former premier of the state of Victoria, in an interview with Australian broadcaster ABC. “If they're struggling now, they're really going to struggle with 3.3 million visitors,” he added.
“It's inevitable that Chinese tourists want to explore the world, and the world needs to get fully prepared,” Ge Lei told Newschina. Ge is the CEO of the Beijing-based Cyts-linkage public relation firm under China's top tour operator CYTS Tours Corporation.
“One suggestion for overseas destinations is that it will be better if they put more value on quality than quantity,” Ge said.
If they massively introduce cheap package tours, destinations may find themselves in the awkward position of attracting millions of Chinese tourists, who may contribute little to the local economy but strain transportation infrastructure and lead to crowded streets.
Since 2016, Thailand has made efforts to weed out the so-called “zero-dollar tour,” cheap tours at the incredibly low prices of 1,000 to 2,000 yuan (US$159-318). The tours are astonishingly cheap but notorious for bussing Chinese tourists around to retail spots and restaurants that overcharge tourists and give local guides and operators hefty commissions. The Thai tourism industry is striving to transform from a quantity-oriented market to quality-oriented one, eyeing the growing number of individual travelers and high-spending communities.
“Especially in terms of tour groups, more is not necessarily better,” Ge said.