A huge market potential for European tourism

<div class="article_quote"><div class="article_quote_contain"><div class="article_quote_quote">"Only the most affluent five percent of mainland China's population can afford to travel to Europe. But these 70-80 million people still represent a huge market opportunity."</div><div class="article_quote_name u-text-style-main">Wolfgang Arlt</div></div></div>

Prof. Wolfgang Arlt is the founder of COTRI (China Outbound Tourism Research Institute), a leading Hamburg-based institute for consulting and research relating to the Chinese outbound tourism market, of which he is also Director. In addition to its consulting and data analysis services, the institute offers special training courses directed at the tourist industry and destination marketing. Besides his involvement with COTRI, Prof. Arlt is on the staff at the FH Westküste University of Applied Sciences, lecturing in International Tourism Management while also serving as doctoral advisor at a number of universities in Germany, Britain and Spain. However, it was during his university studies in Taiwan and Hong Kong, and working as a tour operator, that he became seriously interested in China.

<h3 class="interview-question">COTRI, the research institute that you founded, produced data showing that 162 million Chinese travelled abroad in 2018. Would you say that the Chinese are fond of travelling?</h3>
This figure includes the total number of border crossings from mainland China, as well as multiple entries for those working in Hong Kong, Macau or Taiwan, and who therefore need to cross the border regularly. To roughly understand how many Chinese actually travel abroad, you’d have to approximately cut this figure in half. So, if in 2000 there were "only" about 10 million border crossings, rising to around 100 million sometime around a decade ago, you’ll realise that this number has risen enormously, and continues to do so. While in the past, Chinese nationals wanting to travel abroad had to wait six months for a passport, nowadays they receive it almost immediately. Yet, only 10% of the total population has a passport, simply because the vast majority of Chinese nationals don’t have the financial means to travel abroad. When it comes to basic services such as housing, food, electricity, education, health and so on, China is generally better off than India. But most people can't even afford a trip to Shanghai.

<h3 class="interview-question">You’re saying that only 10% of the Chinese can afford to visit Europe?</h3>
When we talk about the Chinese travelling overseas, we’re referring to the most affluent ten percent, corresponding to about 150 million people, and, of these, only about half can afford to travel outside Asia. So, your initial premise needs adjusting: even if “only” five percent of the total population of China could potentially travel to Europe, that represents somewhere between 70 – 80 million people, which is still a huge market. Also bear in mind that most Chinese tourists who have visited Europe are from the most affluent echelons, not the middle-class.

<h3 class="interview-question">I have this image of a coach-load of Chinese tourists stopping at the old town gate at Munich, Sendlinger Tor. All 50 get out of the bus, most of them armed with cameras. Are these the “upper-class” Chinese you’re referring to?</h3>
These large groups of Chinese tourists are the most noticeable, and they’d behave more or less as you’d expect them to. But they represent the lower rung of the urban elite. Chinese, who’ve studied abroad and speak English no longer travel in large groups but as individuals or as families. In fact, they’re hardly noticeable. Depending on the country they’re visiting, Chinese tourists are divided between organised groups and individual travellers, in a ratio of about 50:50. Most group tourists are first-time travellers who might be visiting seven countries in eight days. The trend now is towards smaller groups consisting of five to eight persons. A typical Chinese family (2 adults, 1 child) may travel with another family or as an extended family, including children and grandparents. Meanwhile, the package tours still continue, and are mostly popular with tourists from provincial cities of around eight million inhabitants or less.

<h3 class="interview-question">If I was in their shoes, having to deal with foreign languages and vastly different cultures from mine – the organized group tours would make more sense.</h3>Look at it the other way around. Wouldn’t you like to see the whole of China? I’ve experienced this myself when, as a tour operator, I arranged tours to China. I reminded my clients that China is a huge country, as large as Europe, and they couldn't expect to visit Beijing, Shanghai and Canton on a single trip. The same goes for Chinese tourists abroad. Looking at a map of the world from a Chinese perspective, China is in the middle and Europe lies on the top left corner. First-time Chinese tourists will have a list of places they wish to tick off, whereas those who’ve already been abroad, prefer to spend a few more days in a single country and try specific things like skiing or photography.

The Travel Motives of Chinese Tourists

<div class="article_quote"><div class="article_quote_contain"><div class="article_quote_quote">"Among Chinese leisure travellers, there’s one overriding reason for going abroad: travelling as a status symbol … it’s mostly about “showing off."</div><div class="article_quote_name u-text-style-main">Wolfgang Arlt</div></div></div>

<h3 class="interview-question">What are the main reasons for the Chinese travelling abroad?</h3> 
Foremost, it’s business travellers. The Chinese have invested heavily in Europe, so business travel and visiting trade fairs is an important reason for going abroad. When it comes to leisure tourism, it has something to do with "showing off". For them, it’s a status symbol. They take selfies to show their friends back home: “Look where I’ve been … I was here or there". Initially, they would be referring to world-famous points of interest such as the Eiffel Tower. But this has become passé among the more affluent, who are looking for something more. On a first-time trip to Italy, the itinerary was inevitably: Venice-Florence-Milan-Rome. But their choices on their second trip are more interesting. Tourist operators in Italy should be marketing their country along these lines: "There’s so much more to see and do in Italy. Why not visit regions such as South Tyrol/Alto Adige or Friuli-Venezia-Giulia, known for its food, fine wines and tastings, as well as cycling and skiing? Verona airport is the gateway to North-East Italy".

<h3 class="interview-question">For what other reasons do Chinese tourists visit Europe?</h3>
The second main reason for visiting Europe I think would be to see it with their own eyes. Most of them believe that what they see on TV and what international tourism organizations show is mostly biased and about marketing ...

<h3 class="interview-question">I need to chip in here: is that really the case?</h3>
Yes, absolutely. The Chinese have a clear understanding that news is packaged and that news production is a business. They’re even more critical of their own media than we are of ours! They want to see for themselves whether or not Italy is really the most beautiful country in the world – as they’re led to believe.

<div class="article_quote"><div class="article_quote_contain"><div class="article_quote_quote">"Chinese tourists are ambassadors of their country and at the same time also very aware of their buying power. This is one of the reasons why they aren’t shy to spend money on holidays abroad: they don't want to be perceived as poor or stingy!"</div><div class="article_quote_name u-text-style-main">Wolfgang Arlt</div></div></div>

<h3 class="interview-question">Are there any other reasons prompting them to travel abroad?</h3>
It’s a sign that you’ve made it. People want to show that they can afford to travel abroad, not only as individuals but specifically as Chinese. This matters to them, because they’re seen as ambassadors of their countries by their government. It’s another sign that China has made it into the top league. Acutely aware of their purchasing power, Chinese citizens have more money to spend and are quite proud of being able to travel. As a German, I don't care if a German flag is flying in front of my hotel. But it matters to the majority of Chinese tourists … perhaps it’s a question of national pride. Even if a Chinese tourist abroad speaks English fluently, he still appreciates it if he comes across a brochure that’s also available in Chinese – purely as a sign of respect. When I was recently at Kuala Lumpur Airport, I noticed that the public announcements were first made in the local language, then in Chinese and only after that in English. I overheard some Chinese next to me saying: "Did you hear that? They said it first in Chinese and then in English! That’s wonderful!” In short, their attitude is "I want to show the world, that I, as a Chinese person, can afford it". So, that's why the Chinese like to spend plenty of money abroad: they want to be seen as being able to afford it!

<h3 class="interview-question">Do things like "culture and cultural education" matter to the Chinese traveller?[” relevant?</h3>
Absolutely yes. As Europeans, our ignorance about China can’t be compared to any lack of knowledge about Europe on their part. Already at high school, the Chinese learn about Shakespeare, Bach and Beethoven, Napoleon, the Beatles and the German national football team. Many Chinese define themselves more in terms of their hobbies than what they do for a living. They might say: "Though I work in administration, I’m actually a part-time photographer.” Or: “I’m into nature photography/classical music/Bauhaus-style architecture and flamenco". You know, there are 30 schools of flamenco in China. While 90% of the Chinese have never heard of flamenco and 99.9% of Chinese aren’t too interested in dance, the remaining 0.1% still represent 2 million people! And there’s a high probability that someone who’s learnt the flamenco can afford to travel to Europe.

<div class="article_quote"><div class="article_quote_contain"><div class="article_quote_quote">"Travelling abroad should be a short and intense life-experience. Chinese people like travelling, but can’t afford to waste time."</div><div class="article_quote_name u-text-style-main">Wolfgang Arlt</div></div></div>

<h3 class="interview-question">Should destination marketing in China take these factors into account?</h3>
Absolutely yes, and that’s something we’re still not doing properly. When I think of the Alps, I think of family holidays on a mountain farm. The idea of a destination needs to conjure up a particular set of images. A child growing up in a huge city like Shanghai has probably never seen a cow. They’d be interested to see where food comes from and what goes into producing it. When Chinese visitors come to Germany and stay on a farm, it’s just for one night, or two nights at the most. It’s about short, condensed experiences.An acquaintance, who runs a farm near Hallstatt that hosts Chinese visitors, explained how it works: after arriving at say 3:00 pm, they take photos until it’s time for a traditional dinner at 6:00 pm. The next morning at 5:30 am, they’re served a traditional local breakfast and then leave. For them, that’s a "traditional farm vacation" ticked off the list! Wealthy first-generation Chinese work 15 hours a day, often seven days a week with just ten days’ holiday a year – or even no paid vacation at all. So, while the Chinese want to travel abroad, they have very little time to waste.

In the second part of our interview with Prof. Wolfgang Arlt, we look at the potential advantages and challenges of tourism from China, the subject of digitization and development of the Chinese travel market in Europe.

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