The significance of China (PRC) as a Travel...

Confidential & Proprietary • Copyright © 2007 The Nielsen Company

The significance of China (PRC) as a Travel Generator

Dr. Grace Pan, ACNielsen China

Prepared for UNWTO-PATA Tourism Trends and Research Conference

29 June – 1 July 2007, Guilin, China (PRC)

2015年11月13日星期五 Confidential & Proprietary

Copyright © 2007 The Nielsen Company

UNWTO-PATA Tourism

Trends and Research

Conference

Agenda

• Background: The Changing Chinese Consumers

• Tourism and Travel Trends –Domestic travel

–Outbound travel

• Overall Observations and Implications For Tourism

Business Development



UNWTO-PATA Tourism

Trends and Research

Conference

Social Economic Trends - The Changing Chinese Consumers



UNWTO-PATA Tourism

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Conference

2007 GDP Growth Forecast

GDP Growth 2007, %

1.5

2.6

3.1

4.5

4.7

4.9

5.5

5.6

5.7

5.8

6

7.5

9

9.4

0 5 10

New Zealand

Japan

Australia

Thailand

Taiwan

South Korea

Singapore

Malaysia

Hong Kong

Philippines

Indonesia

INDIA

Vietnam

CHINA

Source: IMA Asia



UNWTO-PATA Tourism

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Conference

Global average 97

ACNielsen Consumer Confidence Index

1H 2007 ACNielsen Consumer Confidence Index

135 132

127

120 118 118 117 117

114 112 111 109 108 107 106 106 106 105 104 104 103 103

100 99 99 99 99 97 95 94 93 93 93 92 91 91 89

86

79 78 78 76 75

68 66

51 50

-2 -1 -2 -1

2 6

4 -1

-8

1 0

-8

4 6

-7

-2 0

-9 -2 -3

-4 -1 -3

-14

-7 -7 -6

-8 -4

-10

0 -3

-3

-15

-5

3

-6

-14

-5

3

-6 -5 -3 -9

-14

-6

0

20

40

60

80

100

120

140

160

1H 2007 Changes 1H07 vs.2H06



UNWTO-PATA Tourism

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China’s consumer markets today



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2015 consumer market based on disposable income



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How Utilise Spare Cash After Covering Essential Living Expenses % of respondents who spend on Holidays / vacations

Base: All respondents Source: Nielsen Asia Pacific Consumer Confidence Survey 2007

50% 50%

43% 43%39%

30%

22%

42%

53%

25%

34%31%

36%

42%44%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CHN SG TH MY HK VN JP IN NZ OZ INDO PH TW KOR AP



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Increasing trend towards new media will also accelerate China becoming one market

Source:

*China Internet Network Information Center (January 2007)

**Nielsen NetRatings

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

2002 2003 2004 2005 2006 2007

0

500

1000

1500

2000

2500

3000

3500

4000

Growth in internet penetration Number of Online campaigns Apr 06-Ap 07* **



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24

21

22

19

13

13

8

10

10

4

3

4

3

3

1

1

2

2

45

43

34

43

46

48

53

46

43

11

9

11

10

12

13

22

17

15

30 10 10 30 50 70 90

35-44

25-34

15-24

35-44

25-34

15-24

35-44

25-34

15-24

Participating in blogs

is a way for me to

voice my opinions

The internet is a way

to make friends

Being online makes

me feel like I am part

of a global

community

Among those with college

degrees and above, online

population covers more than

90% of China… they also

tend to be wealthier

Internet and Lifestyle: Chinese are active Netizens!

Disagree Agree



UNWTO-PATA Tourism

Trends and Research

Conference

Socio-Economic Trends - recap • Unprecedented growth of the Chinese economy and next: a consumer

market –Major socio-economic and cultural impact, changes in lifestyles,

values –Rapidly growing importance of the INTERNET

• First: eastern part of the country, with focus on Beijing, Shanghai and Guangdong/Guangzhou – Increasingly: also second and third tier cities (will) show strong

economic growth

• Growing Disposable Incomes –And a growing willingness to use credit cards or to borrow money

• A growing ability and willingness to spend money on leisure

–Travel – Luxury goods shopping (while traveling)

• Chinese (outbound) travel and tourism grows significantly

–Helped by a rising Chinese currency



UNWTO-PATA Tourism

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Travel and Tourism



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Domestic Travel – Leisure Travel



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Nearly ¾ of Chinese online consumers made leisure trips at least one night away from home within the last 12 months (June 2006 – May 2007)

No, 27%

Yes, 73%

31%

53%

16%

Once 2-3 times 4 times and more

N= 3,000 weighted

N= 2,300 weighted, multiple answers allowed Source: Nielsen online omnibus (June 2007)

Frequency of leisure travel



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Domestic leisure travel destinations visited within the last 12 months (June 2006 – May 2007)

7%

7%

7%

8%

8%

9%

12%

14%

15%

15%

19%

19%

Yunnan云南

Hainan海南

Fujian福建

Guangxi广西

Hunan湖南

Sichuan四川

Shandong山东

Jiangsu江苏

Guangdong广东

Beijing北京

Zhejiang浙江

Shanghai上海




UNWTO-PATA Tourism

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The most popular types of places visited with the last 12 months (June 2006 – May 2007)

22%23%

26%32%

0% 5% 10% 15% 20% 25% 30% 35%

Religious placeMuseum

Gourmet food paradiseMinority place

LakeWaterpark

Wildlife park/zooFormer residence

Hotspring resortTraditional garden

Park/greenlandBeach resort

Shopping centre/factory outletMountains and valley

Farm and countrysideHistoric town/water town

Histroric building/relicsTheme park

Metropolitan cityForestry park




UNWTO-PATA Tourism

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Most considered factors

20%

20%

21%

22%

23%

24%

25%

25%

25%

28%

38%

43%

Travel companion

Culture

Reputation

Destination type and characteristics

Travel duration

Service quality

Entry fees

Accessibility

Safety

The distance to travel destinations

Total travel expenses

Natural scenery




UNWTO-PATA Tourism

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Domestic Travel – Business Travel



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Nearly 2/3 of Chinese online population travelled on business trips (June 2006 – May 2007)

Yes, 65%

No, 35%

N= 3,000 weighted Source: Nielsen online omnibus (June 2007)



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On average, Chinese online population travelled on business trips at least twice a year

15%13% 13%

25%

20%

14%

Once and

more than

once a

month

Once every

2 to 3

months

Once every

4 to 5

months

Twice a

year

Once a year Less than

once a year


Frequency of business travel



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Purposes of Business Travel

5%

5%

6%

9%

11%

12%

15%

18%

19%

Retreat

Others

Conference and convention

Client services (entertainment)

Corporate events

Business purpose

Incentive travel

Meetings

Training




UNWTO-PATA Tourism

Trends and Research

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Domestic Dream Destination



UNWTO-PATA Tourism

Trends and Research

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Top Five Dream Destinations – Domestic Travel

4%

7%

8%

11%

27%

Chendu areas 成渝地区

Hainnan Province 海南三亚

Shangri-La 香格里拉地区

Lhasa surroundings 拉萨周边

Yunnan province, exl. Shangri-La

云南境内




UNWTO-PATA Tourism

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The Emerging Outbound Travel Market

http://images.google.com.au/imgres?imgurl=http://www.newsabahtimes.com.my/September2004/15.9/Chinese_Tourist.jpg&imgrefurl=http://www.newsabahtimes.com.my/September2004/15.9/&h=480&w=320&sz=223&hl=en&start=45&tbnid=CgiclIpO65D0QM:&tbnh=129&tbnw=86&prev=/images%3Fq%3Dchinese%2Btourists%26start%3D40%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN

http://images.google.com.au/imgres?imgurl=http://www.cateringinscotland.com/uploaded_images/chinese-740200.jpg&imgrefurl=http://www.cateringinscotland.com/2005_07_01_archive.html&h=723&w=1024&sz=135&hl=en&start=37&tbnid=rwPa2SGZJDVzdM:&tbnh=106&tbnw=150&prev=/images%3Fq%3Dchinese%2Btourists%26start%3D20%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN

http://images.google.com.au/imgres?imgurl=http://electromute.com/chinaweb/pics/wall5.jpg&imgrefurl=http://electromute.com/chinaweb/beijing/wall5.html&h=278&w=350&sz=15&hl=en&start=53&tbnid=NnjNPZXVaNkFSM:&tbnh=95&tbnw=120&prev=/images%3Fq%3Dchinese%2Btourists%26start%3D40%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN

http://images.google.com.au/imgres?imgurl=http://www.theorientalcaravan.com/images/Xinjiang04/Id_kah_smokers..jpg&imgrefurl=http://www.theorientalcaravan.com/pages/postcard_from_xinjiang.htm&h=576&w=432&sz=57&hl=en&start=66&tbnid=_ClaArErGUwNTM:&tbnh=134&tbnw=101&prev=/images%3Fq%3Dchinese%2Btourists%26start%3D60%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN

http://images.google.com.au/imgres?imgurl=http://www.chinadaily.com.cn/english/doc/2004-09/05/xin_4709010513305702019916.jpg&imgrefurl=http://www.chinadaily.com.cn/english/doc/2004-09/05/content_371761.htm&h=255&w=350&sz=18&hl=en&start=74&tbnid=voayGqSyf3jUVM:&tbnh=87&tbnw=120&prev=/images%3Fq%3Dchinese%2Btourists%26start%3D60%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN

http://images.google.com.au/imgres?imgurl=http://www.nd.edu/~intlstud/photocontest/2005/Winners/IF-3rd_dmartin4_37_Atop%2520the%2520Aiguille%2520du%2520Midi.jpg&imgrefurl=http://www.nd.edu/~intlstud/photocontest/2005/IntlFriendships.htm&h=375&w=500&sz=47&hl=en&start=173&tbnid=1zKXgHmpEkIoWM:&tbnh=98&tbnw=130&prev=/images%3Fq%3Dchinese%2Btourists%26start%3D160%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN



UNWTO-PATA Tourism

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Increasing overseas travel will expose them to new ideas and expectations of leisure activities

Source: China National Tourism Administration (CNTA)

World Tourism Association (WTO)

(Unit: Million person time)

100

50

20

29 31 34

0

10

20

30

40

50

60

70

80

90

100

2003 2004 2005 2006 2010 2020

+

(estimated by

WTO)

(estimated by

WTO)

Outbound Traveller

Numbers



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Trips to ADS Destinations as the First Stop

0 1,500 3,000 4,500 6,000 7,500 9,000 10,500 12,000 13,500 15,000

Philippines

Australia

Malaysia

Vietnam

Singapore

Thailand

Korea (ROK)

Japan

Macau SAR

Hong Kong SAR

2004 2005 2006

Unit = ‘000

Source: CNTA (2007)



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Where will be the Dream Destination?



UNWTO-PATA Tourism

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Europe is on top of the list as the most desired dream destination for Chinese consumers

32%

23%

13% 13%

6% 5%

3% 3%1% 1% 1%

Euro

pe

Som

ewher

e in

Chin

a

Austr

alia

/New

Zea

land

Hong K

ong/Maca

u/Tai

wan

Canad

a/th

e Unite

d Sta

tes

Asia

n co

untries

Oth

er

Afric

a

No in

tere

st of h

aving

a d

ream

hol

iday

Don't

Know

/No a

nswer

Mid

dle E

ast

Source: Online omnibus (February 2007)



UNWTO-PATA Tourism

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Are Chinese Travelers Shopaholics?

http://images.google.com.au/imgres?imgurl=http://www.bjreview.com.cn/200451/20041011_C13.jpg&imgrefurl=http://www.bjreview.com.cn/200451/Business-200451(A).htm&h=225&w=300&sz=21&hl=en&start=178&tbnid=YSjkBj7NSULxoM:&tbnh=87&tbnw=116&prev=/images%3Fq%3Dchinese%2Btourists%26start%3D160%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN

http://images.google.com.au/imgres?imgurl=http://hong-kong.tourism-asia.net/gifs/shopping-in-hong-kong.jpg&imgrefurl=http://hong-kong.tourism-asia.net/hong-kong-shopping.html&h=136&w=202&sz=11&hl=en&start=74&tbnid=fCacxgRUoIZHMM:&tbnh=71&tbnw=105&prev=/images%3Fq%3Dchinese%2Btourists%2Bshopping%26start%3D60%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN



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Shopping is one of the key motives



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2006

Ref: Q31, 32

(Unit:

US Dollar)

N=800 216 97 280 156 51

N=1498 534 194 610 160 N/A

Hong Kong Macau Other Asia EuropeOther

regions

Total

Destination

$928$772

$536

$800

$1,408 $1,564

Base: All respondents

Almost US$ 1,000 is spent on shopping – per trip, per person!

SOURCE: 2006 TFWA-ACNielsen Chinese Traveller Study Ref: 9A32



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So, Are Chinese Travelers Shopaholics?

• Well, Chinese (travelers) love shopping…

• For many, shopping is a (key) motive for their trip…

• And indeed it is a key activity during the trip…

• They spend a lot of money on shopping while traveling…

• Their money is mostly spent on non-necessities and

luxury goods…

• So only a bit more research is needed to probably

conclude….yes?



UNWTO-PATA Tourism

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Traditional information sources have been challenged by internet!

0%

10%

20%

30%

40%

50%

60%

70%

Trave

l age

nts

Trave

l boo

k

Chine

se w

ebsite

s

Fashion

mag

azin

es

Touris

t bro

chur

es

Friend

s

New

spap

ers

Telev

ision

adve

rtising

Des

tinat

ion

web

site

s

Family

mem

bers

Onl

ine

chat

ting

with

Chi

nese

Exh

ibition

s/Tra

vel s

hows

Telev

ision

prog

ram

s

Rad

io

Pre

viou

s pe

rson

al e

xper

ienc

e

Onl

ine

chat

ting

with

loca

ls

Pe

rce

nta

ge

SOURCE: N=914. Allow multiple response.

Chinese travel intention study (2006)



UNWTO-PATA Tourism

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Overall Observations and Implications For Tourism Development



UNWTO-PATA Tourism

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Overall Observations

• Growing economy and disposable income

• Changing lifestyle, consumption patterns, values – but still

large differences by region and socio-economic status

• Also 2nd and 3rd tier cities show this growth and changing

lifestyles

• Spending money on leisure and shopping, and travel

becomes more widely accepted



UNWTO-PATA Tourism

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Overall Observations

• The online population is very travel savvy

• The internet is a new tool for travel research

• China’s tourism and leisure industry is set to grow by

large numbers in next decades

• Taking holidays develops from a once-in-a-lifetime

experience to ‘regular’ routine

• However, there are a number of challenges ahead of all

of us…



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Implications For Domestic Tourism Business Development

• Increased travel poses challenges to: – travel infrastructure – roads, trains, planes, airports and

hotels, but also the environment

• Don’t be blinded by the growth numbers: –Consumers will become increasingly critical as their travel

experience grows

• Tourism destinations need to think which, and how many Chinese tourists you want to attract



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Implications For Outbound Tourism Business Development

• How to reach Chinese travellers and potential travellers?

• What are travellers’ needs and wants? – Differences between business and leisure travellers

• How do they travel?

• How to make them go to my destination as opposed to other destinations?

• What is their satisfaction level of their travel experiences at our destination vis a

vis other destinations?

• What should be our target market and potential target group for our business? ………

The PATA and Nielsen co-branded Chinese Outbound Travel Monitor may have all your answers!



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Confidential & Proprietary • Copyright © 2007 The Nielsen Company

It may have a ginseng taste, but the China cake is ‘delicious’!

Thank you! 谢谢！ [email protected]

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