Travel boom a jumbo opportunity

Updated: 2013-05-10 07:11

By Mike Bastin (China Daily)

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Travel boom a jumbo opportunity

It is not only tourist operators who can cash in as Chinese go out to see the world

A few days ago Airbus announced that the largest market for its super jumbo, the A380, will be China. Airbus went further with a forecast that market demand in China over the next 20 years will top 200 aircraft with 500 or more seats.

A bold prediction and exciting news indeed for the Chinese aviation sector and related industries but what really lies behind this spectacular growth in demand for such large aircraft?

It is the emergence of the Chinese tourism market and in particular the rapidly growing number of Chinese tourists who seek far-flung destinations outside Asia such as the United States and Europe.

It is widely accepted that China will become the largest tourism market in the world. In fact, it is not only the numbers of Chinese tourists that are set to grow, but also their spending power, which has already increased impressively.

The United Nations World Tourism Organization says that last year Chinese tourists overtook the affluent Germans as the world's biggest travel spenders.

Furthermore the organization reported recently that Chinese tourists spent $102 billion (78 billion euros) on overseas trips last year, 41 percent more than in the previous year.

Chinese tourists made 83 million overseas trips last year, compared with 10 million in 2000.

But, as we move firmly into the spring and summer tourist season across Europe, just how well understood are the unique needs of the Chinese tourist and how can the European tourist industry adapt to meet or even exceed expectations?

The Chinese tourist is still a relative newcomer for most European hoteliers, tour companies, restaurants and even taxi drivers. Even a working knowledge of Chinese cuisine, culture, hobbies and language will prove invaluable in the competitive battles ahead for the Chinese tourists' business.

Hoteliers and restaurateurs need to be aware that tipping in China is very uncommon. In fact, it may be perceived as an insult in some restaurants if a foreign tourist offers a tip.

The European tourist sector and related industries should also be aware that the typical Chinese tourist may not speak English that well, and if they do they will probably not have the ability or confidence to express themselves fully in the event of any confusion. However, a Chinese tourist's face will light up with delight if they are greeted by a Chinese member of staff when visiting a European hotel, restaurant or tourist attraction.

Hotels across Europe could quite easily provide Chinese (satellite) television in most of the rooms too, which will be very well received by Chinese tourists, even if their English proficiency level allows for a reasonable grasp of TV programs in English.

At a more strategic level, the European tourism industry should be aware that a typical Chinese tourist in Europe will seek tangible and highly conspicuous possessions that serve as status symbols to their friends, family and colleagues when back in China. Modest souvenirs that usually suffice for European tourists may not satisfy this Chinese need to gain face: as a result of their latest trip to Europe.

The typical urban Chinese tourist is also interested mainly in picturesque urban environments. Cities perceived to carry a cool image such as Paris and Milan (fashion) and New York (excitement) will remain top of the destination list. Of course buying famous branded goods is also a major draw for the Chinese. Chinese tourists visit London not so much for the plethora of world-class museums and art galleries but much more for Harrods, Selfridges and Bond Street for the fashion brands.

However, bucolic scenery is also an attraction for the urban Chinese, which is why trips to Scotland's more remote, mountainous parts are firmly on the "to see" list.

Chinese tourists traveling to Europe often rely on an organized tour, provided by a Chinese tour operator, but this will change as they enjoy more leisure time and develop the confidence to design their own travel itineraries. So the European tourism industry has to be prepared to customize its offerings to these increasingly independent travelers.

European travel will remain a primarily leisure experience, but for many Chinese it is also seen as an opportunity for furthering their education and knowledge of various aspects of European lifestyles, history and culture. This is particularly the case when Chinese children are part of any travel group. Chinese parents will take any opportunity, for example, to enable their child to improve their spoken and written English and European languages while traveling around Europe. Hotels that provide some sort of English-language classes will definitely enjoy a competitive advantage.

Finally, this tidal wave of Chinese tourists traveling to European is not just great news for all those involved in the tourism industry. A European holiday is also an excellent bridge between European and Chinese companies seeking some form of business engagement. What better way to start any business negotiation than an offer to arrange a break for key employees inside a Chinese company and their family members? European business should take note.

Chinese business culture is dominated by social activities, with business frequently conducted over dinner and away from the office. European businesses wishing to succeed in China and with joint ventures or strategic alliances with Chinese companies need to follow suit. Any business negotiation trip that includes some of Europe's best sights will be regarded warmly by many Chinese business leaders.

The surge of Chinese tourists to Europe and other far-flung destinations must be seen as a business opportunity for companies across Europe. After all, building guanxi (relationships) is central to business in China.

Do not start your latest strategic plan for China with the usual market information gathering and analyses, rather gain further understanding of the Chinese tourists' needs and wants and design a bespoke holiday for your potential Chinese business partners. The resulting relationship will inevitably lead to much better business negotiations, and the European travel experience and knowledge of European culture gained will also enable your Chinese business partners to gain "face" with their colleagues, friends and family in China. That is an excellent foundation to a long-term business partnership.

So understanding the Chinese tourist should form a key part of all European companies' competitive strategy, and those that succeed and continue to invest in this area will secure sustainable competitive advantage long into the future.

The author is a visiting professor at the University of International Business and Economics in Beijing and a researcher at Nottingham University's School of Contemporary Chinese Studies. The views do not necessarily reflect those of China Daily.

(China Daily 05/10/2013 page9)