Chinese Tourism Leaders’ (Virtual) Forum 2020

On 21 October, we were delighted to share insight into the Chinese travel market with senior representatives from the UK’s leading destination organisations, transport operators, tour operators and visitor attractions at the fourth annual Chinese Tourism Leaders’ event. Hosted by China Travel Outbound and Capela China, settling around Zoom wasn’t quite the same as enjoying Peking Duck in Chinatown but it was a fantastic success nevertheless.

Vivienne Song, China Director for China Travel Outbound, and Helena Beard, Managing Director in the UK, shared the latest information on the Chinese travel market. We heard that life in China is back to normal with the only Covid-19 changes relating to mask-wearing and Track and Trace requirements. China’s domestic travel market has been the first in the world to recover, with flight bookings down only -2% in August, and 75% of China’s travel agents back at work. Post-Covid-19 revenge travel took hold for Golden Week with 637 million trips being made, and strengthening trends include small tailormade tours, self-drive, rail, and luxury and personalised service. A lust for open spaces, remote islands, and direct contact with local cultures will be an emerging trend once the market returns to our shores.

We were delighted to be joined by Richard Nicholls, Head of Research and Forecasting for VisitBritain, who talked us through recent changes to VisitBritain China stats. For several years now there have been significant anomalies between VisitBritain figures for Chinese inbound tourists to the UK, and data from other sources such as number of visas issued. This issue has been discussed at length by the Chinese Tourism Leaders’ group in the past so the audience was very happy to hear that this has now been resolved.  The updated stats show a very substantial increase in Chinese inbound tourist visits to the UK with the revised total more than doubling to 860,000 in 2018. 2019 saw 883,000 Chinese inbound visits to the UK. In fact China’s £1.7bn spend in 2019 makes it the second largest inbound market by expenditure.

The timing for the return of the market was also discussed, with expectation that the first significant influx of Chinese tourists will be seen in Summer 2021. More accurate predications will be possible following Chinese New Year in February 21 when we will see how and where the Chinese government lifts restrictions on international travel. Helena Beard highlighted to the audience that the more immediate opportunity lies with international students and announced that a new student-focused product would be launched by the agency next month to service this market.

We also heard from Clive Doble of Value Retail, Bicester Village, who talked about the abolition of tax-free shopping for international visitors to the UK from 1st January ’21. This policy would make it about 20% more expensive for Chinese travellers to visit the UK and shop here. It would have a detrimental impact on international visitor figures and come as a huge blow to the inbound tourism sector which is already one of the sectors impacted most severely by COVID-19.  Joss Croft, CEO of UKinbound, reassured the forum that intense lobbying continues to try to reverse this decision.

The Chinese Tourism Leaders’ group was created by specialist agencies China Travel Outbound and Capela China to share insights and best practice between the destinations, visitor attractions, transport companies and tourism brands who are at the forefront of Chinese inbound tourism to the UK.

Self-drive tours gain in popularity in China

The recovery of the domestic tourism industry is accelerating in China. According to The Beijing News, more than 22 provinces and cities across China, including Beijing and Shanghai, have now resumed local tourism operations with travel agencies starting to organize trips to neighboring cities as the novel coronavirus outbreak subsides.

This year, China’s May Day holiday has been extended to five consecutive days over a long weekend, and is expected to deliver the next big spike in tourism in China. China’s biggest online travel agent, CTrip, has reported that the number of trips booked for the May holiday has increased by 353% since April, and some 3,8600 scenic sites have now opened ticket reservations on CTrip. This number is expected to exceed 4000 for the May holiday. These are outdoor attractions such as mountain walks, national parks and, of course, the Great Wall. Indoor attractions and museums such as the Forbidden City, will remain closed.

Image: CGTN

Although it is widely reported that the coronavirus outbreak has been largely brought under control in China, it is clear that tourists are still concerned about transmission and further outbreaks. This is affecting their transport decisions, and they are taking to the roads, intending to drive to their chosen attractions. CTrip reports that, so far, the number of car rental bookings has reached 70 percent of the same period last year which is a strong performance given the tourism downturn. 

Image: Ctrip

During the Qingming holiday in April this year, the travel review platform, Mafengwo, shared data showing that the first bookings leading the recovery of the domestic market were in short-distance self drive and day trips. In the week before the Qingming holiday, searches for the keywords “nearby self-drive tour” in Beijing, Shanghai and Guangzhou increased by 85.7%, 51.2% and 132.8% respectively. The China Tourism Academy reported that, during the Qingming holiday, tourists to scenic spots mainly came from within the same province, that urban one-day tours and suburban tours are recovering, and the proportion of self-drive tours increased, with most tourists travelling together as a family.

China Tourism Academy data: 41% of tourists will choose self-drive as mode of transport when COVID-19 ends. (Image: CGTN)

Self Drive was increasing even before Coronavirus

According to the China Tourism Academy, the Chinese made 580 million self-drive trips across domestic destinations in 2018, which represented a year-on-year increase of 35.6%. Around 70% of domestic road trips in 2018 were two to three day excursions with a driving distance of no more than 200 kilometres. However, the number of long-distance and outbound self-drive trips also grew in 2018.

In 2019, Chelun and Tuniu launched a report about self-drive travel, which showed that, in the first half of 2019, 82.6% of car owners enjoyed a self-drive trip, with nearly 80% of them choosing a short road trip and nearly 60% opting for a long-distance road trip. Industry experts believe that with the strong support of national policies and the increasing view that self drive is more environmentally friendly than air travel, self-drive will be more and more popular.

Are self-drive tourists valuable?

This year, due to the effect of the coronavirus, naturally more people will choose self-drive to avoid gathering on planes, trains and coaches. Self drive offers easier access to the kinds of attractions which are likely to be the most popular, such as national parks, natural scenic spots and campsites, allowing people to get close to nature and away from crowds. As people will not be travelling in guided groups, there will be a demand for more public tourism services, such as visitor information, signs, guidance and advice. Self-drive tourists are also considered to have a very strong purchasing power which can be highly beneficial to local economies and artisan industries, having a more leisurely approach to shopping for goods and souvenirs and prioritizing local shops and craft souvenir stores over shopping malls. 

What does this mean for international travel?

As with all travel trends which start domestically in China, the passion of self-drive in domestic tourism has also extended to outbound tourism.

According to a 2018 report by Zuzuche, China’s outbound self-drive tourists reached 9.14 million, a 65-fold increase over six years from 2013 to 2018. The report also showed that over the past three years, 63% of self-drive tourists were 28 – 38 years old, but the number of tourists aged 40 to 49, and over 50 years old also displayed growth, showing that self-drive was also growing in popularity across varied age ranges.  

What is the attraction of self drive for the outbound Chinese tourist?

As with many areas of travel and tourism, the popularity of self-drive comes down to cost and convenience. Public transport in some foreign countries is relatively expensive and complicated to book. Private car bookings are popular, but, compared to taxis and chauffeured vehicles, the cost of self-drive car rental is clearly more economical. For the top 10 self-drive destinations for Chinese tourists in 2019, the average car rental cost was worked out to be only about RMB 100 per person per day (Zuzuche, 2019). This low cost reflects the fact that Chinese tourists tend to travel in small groups, with four or five people in the car, making this a very cheap alternative to public transport.

As the Chinese market matures, the desire for more experiential holidays and to travel beyond the beaten track grows. Self-drive offers a convenient way to explore a country, visiting its more remote, non-urban sites and the national parks, scenic and coastal regions with the fresh air and natural beauty yearned for by the Chinese. Self-drive requires a certain level of confidence which was perhaps less prevalent in previous generations of Chinese tourists. Now China’s millennials are so used to travel, they are well educated (often abroad), and speak second languages. Hiring and driving a car is less of a challenge than it would have been for their parents. 

How should the car rental industry prepare for Chinese tourists?

Comfort, safety and reliability will also be important in this market. Chinese tourists are reluctant to ask a lot of questions and are generally risk-averse when it comes to booking travel, preferring to book via the travel trade and well-known brands. International car hire brands, such as Hertz and Avis, have an opportunity to do very well in this market, but there are also great opportunities for car rental brokers or smaller specialist brands (such as self-drive minivans serving more remote places like the Scottish Highlands, or all weather vehicles in ski or mountain regions) to promote their products in China to the FIT market. This can be done via social media, PR or, very effectively, through the existing distribution structure of the Chinese travel trade and China-specialist DMCs.

It will be very important that the booking and collection processes are simplified and clear, and that there is no hint of overselling of unnecessary extras, and the service delivery is exemplary. Chinese tourists will spend freely on a great experience, but in return may have high expectations and will be quick to turn to social media if they feel they have been poorly served, ripped off, or disrespected. Transparent pricing, high quality service, and good directions and assistance will all be valued highly in this market.

The popularity of countries such as USA and Australia over the past decade also feeds into the growth in the self-drive sector. Many Chinese tourists will have enjoyed flydrive holidays in Florida, California, or throughout the Australian states. These countries lead the self-drive market globally, with open roads, long distances, plenty of parking and easy navigation. Europe is still catching up and VisitBritain figures, for example, show that public transport still far outweighs self-drive. However, in the 2019 figures from Zuzuche, the UK came in as the 10th biggest self-drive destination for Chinese tourists behind USA, Australia, New Zealand, Thailand, Canada, Germany, Italy, Spain, and France. It seems likely that once we start living in a post-coronavirus world, European car rental companies, destinations and the hospitality and travel industries should prepare for an upsurge in demand from China for self-drive holidays, and should prepare themselves within their recovery plans with a clear sales and marketing strategy for China, and a product development plan which includes consideration for the Chinese driver.

Restarting tourism in Europe; what can we learn from China?

China is finally starting to emerge from lockdown and take its first steps to restart travel and tourism throughout the country. Can Europe learn anything from China’s experience as we look ahead to a time when we too can think about reopening our museums, lifting travel restrictions, and welcoming visitors once more to our national parks?

Wuhan is where the story began, and 80 days after lockdown started, the city is now finally beginning to lift some restrictions, and open borders. The metro is running again and retail businesses and shopping centres are being reopened in a staged approach from this week, to try to reinvigorate some spending among residents. However, as far as travel goes, there are strict regulations still in place. Visitors to Wuhan are required to report how they have travelled and their reasons for coming. Hotel guests are having their temperatures checked twice a day for signs of the virus. They are required to show a code on a smartphone app which tracks their health status and where they have travelled. If you want to board a bus, you also have to show your smartphone health code to a volunteer. Tracking via technology is a vital part of the city’s strategy in coming out of lockdown.

Wuhan Tianhe International Airport has also reopened following a 76-day closure. According to the aviation data platform, Variflight, Chengdu, Guangdong and Hainan are the most popular destinations for flights now departing from Wuhan. It’s all about the domestic market and will be for some time.

Attractions reopening

According to the government, Hubei province, including Wuhan, has opened more than 40 natural outdoor attractions to the public since the beginning of April. To try to control spread of COVID-19, all attractions have adopted e-ticketing with tickets available via WeChat as well as Online Travel Agents. Tourist flows are controlled through time slots, with daily flow limits in place. Tourists are required to socially distance to 2 metres and to wear a mask during their visit. Tourist attractions which focus on indoor visits remain closed for now.

National holiday boosts domestic tourism

The Qingming Festival is a three day holiday which took place over the first weekend of April. It is an important festival in the Chinese calendar, when people pay tribute to the deceased and visit the graves of their ancestors. It is a popular weekend for domestic travel and getting together with friends and family. During this year’s festival, more parks and scenic attractions reopened across the country amid tight restrictions. Visitor limits were set (and quickly reached, leading to the closure of some attractions). Temperature checks were made on every visitor and health codes shown.

Some early data is now emerging in China on domestic tourism statistics. Qunar and Trip.com are reporting signs of recovery in the domestic market and an increase in booking volumes for transportation tickets, hotels and scenic attractions. According to the ‘2020 Qingming bank holiday market recovery report’ issued by Fliggy, bookings for train tickets and scenic spots during the Qingming holiday were up 100% during the week. Hotel bookings are also starting to show recovery as are city tours and high speed trains. Liang Jianzhang, co-founder and chairman of Trip.com Group has been expressing cautious positivity, saying

“I am optimistic about the recovery of domestic tourism. People have accumulated a strong desire to consume”

According to the China Tourism Academy, during the Qingming Festival there were 43,254 domestic trips, and ticket sales on attractions on Trip.com increased by 114% vs the previous month. These are not large figures, but they are a start. Unsurprisingly, short tours, and self drive were the most popular methods of travel.

What can we learn from China?

At this point, it is important to watch and learn. As attractions open up, it is inevitable that we will see mistakes being made and successes being delivered. It was widely reported that, as soon as Huangshan National Park in Anhui Province opened its gates over the Qingming Festival weekend, it was inundated with visitors and forced to close as social distancing rules could not be adhered to. The attraction had offered free entry in order to stimulate demand. On reflection, probably an unnecessary and potentially damaging decision. 

Shanghai Disneyland is now expected to reopen on 15th April moving the date forward from June. This follows a phased reopening of certain areas which has been going on for a number of weeks, which started with resort hotels, shopping and dining areas with reduced opening hours and a limited capacity. This phased approach may be adopted by many major attractions around the world and theme park executives will be watching closely to see how things progress in Shanghai.

There is clearly a pent up demand in China for travel, tourism and entertainment. But caution and concern over health and safety will continue for some time. In Beijing, indoor attractions remain closed, but restaurants and shopping malls are open again. But that has not marked a return to normality. The restaurants are quiet, with people reluctant to sit near each other or to socialize as they would have done before coronavirus. Tourist attractions throughout the world can learn from China. They must be bold, and willing to face up to what might be an unwelcome reality of consumer behaviour for the next year. However much we might want to enjoy domestic and international travel once again, we will require reassurances, hygiene policies, effective visitor management and reliable health screening checks, in order to return to attractions with confidence.