The China Outbound Travel Education Series – part 8: Who is the Chinese traveller?

Among the 1.3 billion people in China, clearly not everybody can afford a trip overseas. Disparity in income and living standards is very high. Research shows that at least 150 million people have an income level of middle class and above, privileged enough to afford travel abroad. Given the continuous growth of the economy, this middle class is increasing rapidly even as the income gap is increasing. Among this group, we can distinguish three types of travellers .

•    Official travel
Official travel is conducted by people employed in government or public service. They often travel abroad upon invitation of a related organisation in the destination country. Such travel requires approval from the Chinese authorities in advance, as it is at the government’s expense. These officials carry official passports, which are different to private passports. The visa procedure is handled by departments of the Chinese government in coordination with the embassy or consulate of the destination country.
Most of the official delegations concern meetings with foreign counterparts, so-called inspection or technical visits. These technical visits provide the justification to travel abroad. More often than not the planned official visits are shortened or even cancelled while the group is already abroad. Securing an invitation to travel abroad has in fact become a way to visit a foreign country much like tourists do. The official delegations are often small groups of less than ten people. These groups come from all over China, not only from the major metropolises. All travel arrangements are taken care of by specialised departments within the ministries responsible.

•    Business travel
This includes incentives, visiting exhibitions and inspections or technical visits. The purpose of travel is to establish business relations and get a better understanding of the foreign business climate and commercial partners. The actual purpose of travelling is still leisure. Business groups vary in size and nature and can come from anywhere in China.
Incentive travel was in the past offered by foreign investors in Chinese enterprises, but now increasingly it is the Chinese enterprises who organize incentive groups for their staff, customers and agents. Incentive travel is mostly in the field of IT, medical care, automobile and insurance. To meet the needs of the incentive market, some travel agencies have set up new departments or independent companies specialising in handling incentive groups. In 2005, the biggest incentive group is 15,000 pax travelling to Australia and the second biggest is the 6,000 pax group to Thailand. There are quite a number of incentive groups of around 1,000 pax travelling to Europe and other destinations.
•    Chinese officials and business people can be big spenders. It includes a large amount spent on private shopping. Since their travel costs are paid for, this is not surprising.
•    Both business and official travel are not quite transparent and often not directly operated by tour operators, but rather within the governmental departments or by (trade promotion) consultants. Travel is often organised through a network of private relations of friends abroad. This will change once the legal framework for travel agencies will be adjusted to allow them to freely operate various types of travel.
•    Private travel
Private travel, unlike official and business travel, is a new phenomenon in China. This type of travelling has leisure as its sole (and authorised) purpose. Due to this being a new opportunity for Chinese, their priorities are to see as many countries as possible and get a better understanding of foreign cultures. It is often regarded as an educational experience. The government of China has signed tourism agreements with more than 118 foreign countries to facilitate Chinese tourist groups, granting the so-called Approved Destination Status (ADS).
•    Groups
Most people from China are first-time visitors and travel in groups, given the language barriers and unfamiliarity with the destinations. They belong to the rising middle classes and often travel in large groups (30-45 people). Certified travel agencies in China handle the visa procedure on behalf of the customers, following the ADS agreement with the destination country.
•    Individual Travel (FIT)
The individual traveller often has a high income and big purchasing power. They are more likely to speak other languages and are experienced travellers. They can be quite demanding to their agent and supplier.
The visa for FIT travellers must be applied personally. It is up to the discretion of each embassy or consulate whether to issue FIT visas for tourism. This is not covered by the ADS agreement or any other government policy. In fact, FIT is not classified by China as tourism.
•    The demographics of private travellers vary: Pensioners are travelling during the off-season mostly sponsored by their sons or daughters; the parents take their children for travel during school holiday; and the 3 golden holiday weeks are crowded with office workers and their families.
•    For now, group travel to Europe consists of more than 5 countries in the same itinerary for the first time visitors. Success in arranging single country Europe tours will depend on how well the destination is promoted.
•    Traditionally the domain of middle-aged males, travel is now accessible to all. Tourism promotion boards, suppliers and guides should be prepared to adjust the product to suit the demands of new types of customers.
•    China has many ethnic minorities with different cultural and religious backgrounds. Hui, Manchu, Korean, Ughur, Kazakhs, Tibetans, Miao are just some of them. They are potential consumers with defining characteristics and demands.

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