An Analysis of the Tourist Flow in China’s Outbound Tourism Yanjun Xie Miao Li

1. An Analysis of the Tourist Flow in China’s Outbound Tourism Yanjun Xie Miao Li (yxie@dufe.edu.cn) School of Tourism & Hotel Management Dongbei University of Finance & Economics

2. Topics of My Presentation • A Rough historical outline of tourism development in China • Composition of outbound tourism destinations of China • Volume, direction, and concentration of outbound tourism of China • Demand characteristics and consumption preferences of Chinese outbound travelers • Constraints and incentives for outbound tourism of China

3. 1.A Rough Outline of History of Tourism Development in China • Political Hospitality:1949-1978 • Modern Tourism Industry: Since 1978 • Priority of Tourism Development since 1978:Inbound International Tourism • The Focus of Tourism Development in the Early Time: Foreign Currency • The Pattern of Tourism Development: Inbound International Tourism First; Domestic Tourism Second; Outbound International Last.

4. 1.A Rough Outline of History of Tourism Development in China • The huge accumulation of foreign currency: • The fast growth of inbound international tourism: • The whacking boom of domestic tourism: • The forthcoming outbound international tourism wave:

5. FOREIGN EXCHANGE RESERVES

6. ANNUAL VISITOR ARRIVALS 1978—2007

7. OUTBOUND DEPARTURES: 1993-2007(TEN THOUS.)

8. DOMESTIC TOURISTS ARRIVALS1993-2006

9. Starting stage Growth stage travel to Hong Kong and Macao travel to border areas travel to foreign countries The Development course of outbound international tourismin China • The first stage (starting stage): 1983 -1996, featuring VFR and border area travel • The second stage (growth stage): since 1997.

10. 2.Composition of outbound tourism destinations of China Time course and geographical distribution of Chinese citizens’ outbound destinations

11. Detailed list of outbound tourism destinations of China

12. TableⅠ Approved outbound destinations Detailed list of outbound tourism destinations of China

13. 3.Volume, direction and concentration of outbound tourism of China • Volume of outbound tourist flow • WTO’s forecast(1995) • Average annual growth rate:12.8% in 1995-2020; • Market share: 0.9% in 1995 to 6.4% in 2020; • From 2000 to 2007: the average annual growth rate of Chinese outbound departures is 21 %. • The outbound travelers to Hong Kong and Macao account for almost 70% of the total departures.

14. 3.Volume, direction and concentration of outbound tourism of China Share of Outbound Tourist Flow in 2007

15. 3.Volume, directionand concentration of outbound tourism of China • Directions of outbound tourist flows • Short-distance flows: to North-East Asia and South-East Asia, and long-haul flows: to Western Europe • Japan and South Korea are the two most important short-distance destination countries; • the USA and Australia are the two most important long-haul destination countries • European countries become the most popular long-haul destinations for Chinese outbound travelers in recent years. • The top ten outbound destinations maintain stable; • 1999: Hong Kong, Macao, Thailand, Japan, Russia; US; S. Korea, Singapore, N. Korea, Australia; • 2007: Hong Kong, Macao, Japan, S. Korea, Vietnam, Russia, Thailand, US Singapore, Malaysia;

16. The top ten destinations for outbound tourism of China

17. The proportions of Chinese traveler to Japan and South Korea were relatively large, each of them was more than 10%. The average CR of the top three, the top five, the top eight and the top ten destinations were 31.1%, 45.7%, 61.0% and 65.7% respectively. The Concentration degree of outbound tourist flows

18. 4.Demand characteristics and consumption preferences of outbound tourists of China • International tourism expenditure continues to increase • WTO: amount of international expenditure reached US$24.3 billion in 2006; increased 11.5%; ranked 6th • AC Nielsen Company: average expenditure per visitor US$928, US$1408 specially in Europe, ranked No.1 in Europe. • Visitors to Switzerland: daily spending per person reached 500Swiss Frac, equals that of three German or four Dutchman. • Tourist spending items: 45% on shopping, 21% on sightseeing,18% on entertainment.

19. Chinese outbound travelers for private purpose increase dramatically Comparison of China’s outbound travelers for private purpose and official purpose (million persons) Source: “The Yearbook of China Tourism”

20. Chinese outbound travelers for private purpose increase dramatically (chart)

21. In-depth Tours and Quality Products • There is a trend that In-depth Tour has much more market potential than Sightseeing Tour • Demand for Quality Products Emerges

22. “Free Travel” Increases • Huge potentials of Chinese tourism market are increasingly recognized • More and more countries choose to issue individual tourist visa to Chinese citizens and simplify the application procedure • Some countries tend to loosen their restrictions on issuing tourist visa • “Free Travel” was thus a burgeoning pattern in those countries mentioned above.

23. 5.Constrains and Incentives for Outbound Tourism of China • Outbound travel policy: • In the early time: “actively developing inbound travel, appropriately developing domestic travel and restrictedly developing outbound travel” • In 2005, CNTA adjusted the above policy to “comprehensively promoting domestic travel, actively developing inbound travel and standardizing outbound travel”.

24. 5.Constrains and Incentives for Outbound Tourism of China • Disposable income of Chinese residents increases with a double-digit annual rate in recent years. • The increase of the value of RMB Yuan against the U.S. dollar. • A huge population base with more than 100 million affluent residents live in cities or towns. • The narrowing of the rich-poor gap is to foster huge middle class tourism market in China.

25. Disposable Income of Urban Residents Increases

26. Holiday System Changed • Before 2008: • Two days off in a week since 1995 • Three week-long holidays (including Spring Festival, May Day Holiday, and National Holiday, which are called Golden Weeks) since 1999 • Public holidays: 10 days all together belong to 4 legal holidays • After 2008: • Three Golden Weeks became Two • 4 legal holidays became 7 • Public holidays: 10 days extended to 11.

27. Conclusions • Outbound tourism of China shows features of late start, fast growth and vast potential. • Concentration degree of the outbound tourism market is not high at present stage. • Asian countries and regions have been the main destinations for outbound tourism of China. • Europe and Oceania are the two popular long-haul destinations and Africa emerges as an new destination in recent years. • Developed countries are main destination countries (including Japan and South Korea for short-distance market, and the United States and Australia for long-haul market). • Quality of products is valued; In-depth tour is replacing sight-seeing tour; “Free Travel” is much more possible in some countries.

28. Three Welcomes • You Are Welcome to visit the University of Finance & Economics (DUFE: www.dufe.edu.cn ), which is one of the best four universities specialized in the academic field of Economics and Management in China. • You Are Welcome to cooperate with the School of Tourism & Hotel Management (STHM: sthm.dufe.edu.cn) in DUFE, which was ranked the second in 2006 among more than 500 universities with tourism programs in China. • Your Are Welcome to visit Dalian, which was ranked the First Three Best Tourist Cities in China, by both WTO and CNTA in 2007. The modern coastal city is situated in the North-East China close to Korea and Japan.

29. Thank You All for Your Attention !