Chinese Tourists `Flood' Abroad, Spending $48 Billion
Oct. 26 (Bloomberg) -- Like almost all of China's 1.3 billion people, Jiang Liang has never been a tourist in Italy. Next month she'll spend $6,000, almost half her annual wage, to visit Venice during a 10-day honeymoon tour.
``It's our dream to go to Europe,'' says the 26-year-old Shanghai accountant, who married a mobile-phone salesman last month. ``I want to see historic buildings and experience the lifestyle. It'll be very romantic.''
Jiang was able to book her trip because on Sept. 1, China's National Tourism Administration added 26 European countries to the 26 mainly Asian destinations it lets tourists visit. Seven years ago, leisure travel was forbidden. Last year, 20 million travelers from China spent $48 billion on items such as Louis Vuitton bags and Accor SA hotel rooms, according to travel researcher IPK International and the Chinese government.
The Chinese may dominate world tourism in coming years, says Nigel Summers, a director at Horwath Asia Pacific Ltd., one of the region's two largest hotel consulting firms. Tourist departures from China will expand 12.8 percent on average a year -- triple the world rate -- to about 100 million in 2020, according to the World Tourism Organization, a Madrid-based United Nations agency.
The new travelers, sparked by a 40 percent increase in urban incomes since 2000, already account for 9 percent of the world tourism total.
``The numbers have grown substantially, and that's with a lot of travel restrictions in place,'' says Summers, who is based in Hong Kong. ``Wherever they are allowed to go, they'll go, and in big numbers.''
Airlines Add Flights
Intercontinental Hotels Group Plc, Accor and Best Western International Inc., have boosted marketing in China in a bid to increase brand loyalty as more Chinese travel.
Air China, the nation's largest international carrier, is ferrying most tour groups to Europe because European airlines have only limited flights from China.
Beijing-based Air China plans a $500 million initial share sale this year to buy more planes. It placed a $360 million order for seven 737-700 jetliners from Chicago-based Boeing Co. on Sept. 2, according to Boeing.
Cologne, Germany-based Deutsche Lufthansa AG, Paris-based Air France-KLM Group and Stockholm-based SAS AB say they will increase flights to China.
Only Hong Kong-listed China Travel International Investment H.K. Ltd. among non-Chinese-owned travel agencies can arrange outbound tours. The agency is 59 percent owned by China's largest travel operator, state-owned China Travel Service, according to data compiled by Bloomberg.
Las Vegas-Bound
Chinese travelers managed before the restrictions were lifted to find their way to one U.S. tourist destination: Las Vegas. That's where about 90 percent of the 250,000 Chinese who visited the U.S. last year went, according to the Nevada Commission on Tourism. It opened a Beijing office in June.
Those visitors had to have either public or private passports, issued only to businesspeople, students or those with relatives overseas willing to sponsor them.
Now the Public Security Bureau, which controls private passports, can issue travel documents to those joining tour groups. Approved travel agents in turn can organize group visas to so-called Approved Destination Status countries, cutting costs and bureaucratic delays.
Only Croatia, Germany, Hungary, Malta and Turkey among European countries had group visa arrangements with China before Sept. 1. Germany got the go-ahead from the China National Tourism Administration in February 2003. It's since hosted 100,000 Chinese in tour groups, says Xu Shengli, a Beijing-based spokesman for Germany's National Tourism Office.
Fifth-Largest Spenders
Added to the list Sept. 1: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Italy, Iceland, Ireland, Latvia, Liechtenstein, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and Switzerland.
``With the pent-up demand from the last 50 years, the flood of outbound travelers will be massive,'' says Bernard Bialylew, the Shanghai-based director of Gulliver Travel Associates of London, the world's largest tourism services provider.
Chinese travelers already are the world's fifth-largest spenders, according to Falls Church, Luxembourg-based IPK International. Last year Chinese paid $2,967 on average for a European tour package, sightseeing and shopping, compared with $3,870 for U.S. tourists and $3,616 for Japanese.
The U.S. and Britain so far are missing out. U.S. security concerns mean tour-group visas can't be negotiated by travel agents, according to the U.S. State Department. The U.S. in any case has not applied for Approved Destination Status.
Response `Amazing'
Britain hopes to be an approved destination soon, says Jonathan Simpson, a London-based spokesman for Visit Britain, the marketing arm of the British Tourist Authority and the English Tourism Council. ``The British and Chinese governments are in talks,'' Simpson says.
At China CYTS Tours Holding Co., China's second-largest travel agent, the first 10-day tour from Shanghai to France and Italy was fully booked about a month before the Sept. 1 departure.
``The response has been amazing,'' says Wang Peijun, director of CYTS Tours' Shanghai office. ``We only advertised in the local newspapers for about two weeks.''
Ten-day tours cost about 14,000 yuan, Wang says. France, Switzerland and Italy dominate bookings.
Shanghai China Travel Services Co. expects to send 10,000 travelers to Europe before year-end -- triple the 2003 total, says Yu Weihong, the general manager.
``People are more keen to travel to countries that have just opened up,'' says Yu. The company runs tours for about 200,000 Chinese each year.
Congee for Breakfast
Berkshire, England-based Intercontinental, the world's largest hotel operator by rooms, opened a Chinese-language booking Web site in February.
It also added Chinese-language signs and menus at some European hotels, says Patrick Imbardelli, the company's Asia- Pacific managing director. About 8 percent of the company's guests worldwide, excluding China, are Chinese nationals.
Accor's European hotels with Chinese tour groups now provide Chinese-language satellite TV and newspapers, as well as congee, or rice porridge, for breakfast, says Reggie Shiu, who heads the Paris-based company's Chinese unit.
``At our hotels worldwide, for every 100 room nights occupied, two are Chinese guests,'' Shiu says. ``Our objective is to double that in the next year.''
Best Western, the world's largest hotel group by number of properties, is promoting mid-price rooms that appeal to more than 80 percent of China's tour-group market, says William Dong, the company's spokesman in China. Rooms cost $80 to $150 a night.
Credit Cards
European tourism authorities are gearing up, too. France expects 1 million Chinese tourists by 2009, said Junior Tourism Minister Leon Bertrand, who greeted the first Chinese tourists at Paris's Charles de Gaulle airport Sept. 1. About 400,000 Chinese visited France last year -- 1 percent of the 75 million total, according to the Tourism Ministry.
About 85 percent of China's tourists chose an Asian destination last year, including Australia and New Zealand, according to the London-based World Travel and Tourism Council. Favorite vacation spots were Thailand, Taiwan and Singapore.
San Francisco-based Visa International Inc., the world's largest credit-card company, says Chinese cardholders touring in Asia spend $253 on average for each transaction, compared with $135 for U.S. tourists and $141 for those from the U.K.
Luxury Brands Expand
In Hong Kong, a special administrative region of China, 60 percent of the record 2.1 million tourists in August came from mainland China, the Hong Kong Tourism Board reported -- a 31 percent increase from 2003. Chinese tourists still need visas to visit the former British colony.
The influx has prompted luxury retailers such as Paris-based LVMH Moet Hennessy Louis Vuitton SA and Geneva-based Cie Financiere Richemont AG to expand in duty-free Hong Kong. China levies duties of as much as 35 percent on imported goods and a 17 percent sales tax.
Jiang, the Shanghai honeymooner, visited France for three days in 2001 on a business visa that took her a month to get. Her tour-group visa for next month's trip to Italy and France was approved in two weeks.
``It's our dream to go to Europe,'' says the 26-year-old Shanghai accountant, who married a mobile-phone salesman last month. ``I want to see historic buildings and experience the lifestyle. It'll be very romantic.''
Jiang was able to book her trip because on Sept. 1, China's National Tourism Administration added 26 European countries to the 26 mainly Asian destinations it lets tourists visit. Seven years ago, leisure travel was forbidden. Last year, 20 million travelers from China spent $48 billion on items such as Louis Vuitton bags and Accor SA hotel rooms, according to travel researcher IPK International and the Chinese government.
The Chinese may dominate world tourism in coming years, says Nigel Summers, a director at Horwath Asia Pacific Ltd., one of the region's two largest hotel consulting firms. Tourist departures from China will expand 12.8 percent on average a year -- triple the world rate -- to about 100 million in 2020, according to the World Tourism Organization, a Madrid-based United Nations agency.
The new travelers, sparked by a 40 percent increase in urban incomes since 2000, already account for 9 percent of the world tourism total.
``The numbers have grown substantially, and that's with a lot of travel restrictions in place,'' says Summers, who is based in Hong Kong. ``Wherever they are allowed to go, they'll go, and in big numbers.''
Airlines Add Flights
Intercontinental Hotels Group Plc, Accor and Best Western International Inc., have boosted marketing in China in a bid to increase brand loyalty as more Chinese travel.
Air China, the nation's largest international carrier, is ferrying most tour groups to Europe because European airlines have only limited flights from China.
Beijing-based Air China plans a $500 million initial share sale this year to buy more planes. It placed a $360 million order for seven 737-700 jetliners from Chicago-based Boeing Co. on Sept. 2, according to Boeing.
Cologne, Germany-based Deutsche Lufthansa AG, Paris-based Air France-KLM Group and Stockholm-based SAS AB say they will increase flights to China.
Only Hong Kong-listed China Travel International Investment H.K. Ltd. among non-Chinese-owned travel agencies can arrange outbound tours. The agency is 59 percent owned by China's largest travel operator, state-owned China Travel Service, according to data compiled by Bloomberg.
Las Vegas-Bound
Chinese travelers managed before the restrictions were lifted to find their way to one U.S. tourist destination: Las Vegas. That's where about 90 percent of the 250,000 Chinese who visited the U.S. last year went, according to the Nevada Commission on Tourism. It opened a Beijing office in June.
Those visitors had to have either public or private passports, issued only to businesspeople, students or those with relatives overseas willing to sponsor them.
Now the Public Security Bureau, which controls private passports, can issue travel documents to those joining tour groups. Approved travel agents in turn can organize group visas to so-called Approved Destination Status countries, cutting costs and bureaucratic delays.
Only Croatia, Germany, Hungary, Malta and Turkey among European countries had group visa arrangements with China before Sept. 1. Germany got the go-ahead from the China National Tourism Administration in February 2003. It's since hosted 100,000 Chinese in tour groups, says Xu Shengli, a Beijing-based spokesman for Germany's National Tourism Office.
Fifth-Largest Spenders
Added to the list Sept. 1: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Italy, Iceland, Ireland, Latvia, Liechtenstein, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and Switzerland.
``With the pent-up demand from the last 50 years, the flood of outbound travelers will be massive,'' says Bernard Bialylew, the Shanghai-based director of Gulliver Travel Associates of London, the world's largest tourism services provider.
Chinese travelers already are the world's fifth-largest spenders, according to Falls Church, Luxembourg-based IPK International. Last year Chinese paid $2,967 on average for a European tour package, sightseeing and shopping, compared with $3,870 for U.S. tourists and $3,616 for Japanese.
The U.S. and Britain so far are missing out. U.S. security concerns mean tour-group visas can't be negotiated by travel agents, according to the U.S. State Department. The U.S. in any case has not applied for Approved Destination Status.
Response `Amazing'
Britain hopes to be an approved destination soon, says Jonathan Simpson, a London-based spokesman for Visit Britain, the marketing arm of the British Tourist Authority and the English Tourism Council. ``The British and Chinese governments are in talks,'' Simpson says.
At China CYTS Tours Holding Co., China's second-largest travel agent, the first 10-day tour from Shanghai to France and Italy was fully booked about a month before the Sept. 1 departure.
``The response has been amazing,'' says Wang Peijun, director of CYTS Tours' Shanghai office. ``We only advertised in the local newspapers for about two weeks.''
Ten-day tours cost about 14,000 yuan, Wang says. France, Switzerland and Italy dominate bookings.
Shanghai China Travel Services Co. expects to send 10,000 travelers to Europe before year-end -- triple the 2003 total, says Yu Weihong, the general manager.
``People are more keen to travel to countries that have just opened up,'' says Yu. The company runs tours for about 200,000 Chinese each year.
Congee for Breakfast
Berkshire, England-based Intercontinental, the world's largest hotel operator by rooms, opened a Chinese-language booking Web site in February.
It also added Chinese-language signs and menus at some European hotels, says Patrick Imbardelli, the company's Asia- Pacific managing director. About 8 percent of the company's guests worldwide, excluding China, are Chinese nationals.
Accor's European hotels with Chinese tour groups now provide Chinese-language satellite TV and newspapers, as well as congee, or rice porridge, for breakfast, says Reggie Shiu, who heads the Paris-based company's Chinese unit.
``At our hotels worldwide, for every 100 room nights occupied, two are Chinese guests,'' Shiu says. ``Our objective is to double that in the next year.''
Best Western, the world's largest hotel group by number of properties, is promoting mid-price rooms that appeal to more than 80 percent of China's tour-group market, says William Dong, the company's spokesman in China. Rooms cost $80 to $150 a night.
Credit Cards
European tourism authorities are gearing up, too. France expects 1 million Chinese tourists by 2009, said Junior Tourism Minister Leon Bertrand, who greeted the first Chinese tourists at Paris's Charles de Gaulle airport Sept. 1. About 400,000 Chinese visited France last year -- 1 percent of the 75 million total, according to the Tourism Ministry.
About 85 percent of China's tourists chose an Asian destination last year, including Australia and New Zealand, according to the London-based World Travel and Tourism Council. Favorite vacation spots were Thailand, Taiwan and Singapore.
San Francisco-based Visa International Inc., the world's largest credit-card company, says Chinese cardholders touring in Asia spend $253 on average for each transaction, compared with $135 for U.S. tourists and $141 for those from the U.K.
Luxury Brands Expand
In Hong Kong, a special administrative region of China, 60 percent of the record 2.1 million tourists in August came from mainland China, the Hong Kong Tourism Board reported -- a 31 percent increase from 2003. Chinese tourists still need visas to visit the former British colony.
The influx has prompted luxury retailers such as Paris-based LVMH Moet Hennessy Louis Vuitton SA and Geneva-based Cie Financiere Richemont AG to expand in duty-free Hong Kong. China levies duties of as much as 35 percent on imported goods and a 17 percent sales tax.
Jiang, the Shanghai honeymooner, visited France for three days in 2001 on a business visa that took her a month to get. Her tour-group visa for next month's trip to Italy and France was approved in two weeks.
Now Jiang is plotting her next jaunt -- to the U.K. ``It has a lot of history and culture,'' she says.
To contact the reporter on this story:Jasmine Yap in Hong Kong at jyap5@bloomberg.net.
No comments:
Post a Comment