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China Tourism Tuesday 25
13 Plays1 month ago
In this episode, we reflect on the South Africa Tourism Roadshow that just concluded for China, as the China market remains flat from a volume perspective but shows continued growth in high-value spend. China-Thai travel trends and the questions it raises around the ongoing importance of group travel are covered, along with much more of the latest research coming out of the China outbound space.
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Transcript
Introduction to China Tourism Tuesday
00:00:02
Speaker
Hello and welcome to China Tourism Tuesday, discussion marketing outbound travel destinations in the China travel market. My name is Charles Betain coming to you from Shanghai. Hi everybody, I'm Michael Jones and I'm coming to you from Amsterdam.
South Africa vs. Namibia Tourism Roadshows
00:00:18
Speaker
So, Charles, it was ah good to see you last week. had a nice trip to China for the South Africa Tourism Program. roadshow where they had events in Beijing, Shanghai, and Guangzhou.
00:00:33
Speaker
um All things considered, especially considering the fact that the neighboring country of South Africa, Namibia, the Namibian Tourism Board, ah by chance, had a rival roadshow for the same cities, same times.
00:00:53
Speaker
ah And then also... um I wonder how, i' sorry Michael, I wonder how coincidental
Highlights of Shanghai for Tourists
00:01:00
Speaker
that was. they're not ah we we As South Africans, we're suspicious, but we understand also.
00:01:05
Speaker
um You know, Nubia is both a competitor and a friend with South Africa, but obviously we' all putting together. But yeah, I know it was great to have you over here in Shanghai. um Also for anybody listening, can definitely recommend the tennis courts on the roof of the Shangri-La in Pudong.
00:01:24
Speaker
awesome view while you do a quick game of tennis and I can definitely recommend ah the the summer months for this so that you get a proper like ah yeah proper sweat out
00:01:37
Speaker
Absolutely. Yeah, that was quite a crowning achievement, ah playing at 30 degrees at night.
Chinese Interest in South African Tourism
00:01:44
Speaker
Absolutely. Yeah, so I mean, I think the South African Tourism Roadshow went went well. ah ah Like mentioned, despite... ah competitor roadshows at the same time. You had Namibia Tourism Board had a roadshow at the same time.
00:02:01
Speaker
You had Azerbaijan that also had a rival roadshow at the same time, and they also fall under like the Middle East, Africa segment. So you're targeting the same ah tour operators.
00:02:13
Speaker
um A less competitor ah in terms of tour operators, ah Australia Australia tourism also had a roadshow going on. So yeah, it was a really, really busy time for Chinese outbound tour operators and media and influencers last week ah in the tourism space. Lots and lots going on.
00:02:33
Speaker
Having said all that, yeah, everything went off well. I believe that the Namibian Tourism Board and Azerbaijan and absolutely Australia and absolutely South Korea Tourism Board had a good turnout. I mean, at the end of the day, Chinese outbound tour operators are quite nimble. They bounce between these events with pretty much seamlessly throughout the day when you've got morning and afternoon sessions.
00:02:57
Speaker
So um that was really a ah nice experience and good to see that ah ah clearly that there's still a heck of a lot of interest in the Chinese outbound tourism market.
00:03:07
Speaker
um There's a lot of passion. There's a lot of people looking for new destinations. um So um I think all in all, um yeah, very, very, very positive and good to see how things are clearly just
Diverse Travel Experiences for Chinese Tourists
00:03:20
Speaker
improving. And next year is just going to be stronger and stronger.
00:03:25
Speaker
i mean, To add what ja would you said over there, Michael, um the the impression that I got talking to agents as we were at the Shanghai Leg of the Roadshow. um I don't know if you, I'm sure the picture bit different in Beijing and in Guangzhou, but I mean, Shanghai is kind of this bit of a,
00:03:42
Speaker
Outline market in China. But um what was refreshing for me to see was, despite the the stats that we covered about you know Red Note in a previous episode, just showing the absolute like clustering of attention of brand power,
00:03:58
Speaker
around East Africa, for you know Kenya, for Tanzania. Still, I spoke to you know especially sort of in the more niche and high-end business, like the golf guys, um the the the sentiment around South Africa is positive, being that, and I'm i'm sure you can attest this as well, Michael, is that one tends to do two days of wildlife viewing and then you you you kind of have reached a point where you can sort of you can also you can call it a day after two days. You can do a full 10-day Serengeti experience, but often is now this is even more the the the case with Chinese tourists, is they want to be
00:04:39
Speaker
um up and running and diversify their experiences.
Rising Popularity of European Destinations
00:04:43
Speaker
And you know the maybe it's some optimism on my part as a South African, but I do think that the fact that South Africa has so much variety to offer, that you can really sort of be the typical know safari one day, golf the next day, wine tasting and seaside and sort of city tourism ah the next day.
00:05:07
Speaker
I still believe it's a very strong selling point for South Africa. And like I said, many luxury operators are very, very interested in that, especially not the visa, so easy. Absolutely. And I mean, ah yeah, I completely agree with that. I also think it it breeds out for ah for pretty much the whole of the African continent and non-traditional pre-COVID markets. I mean, I remember ah two days ago, I saw a LinkedIn post that was basically about talking about the volatility in the USA and therefore Chinese ah tourists were flocking
00:05:43
Speaker
ah to Europe. And I was not quite sure about what the author had in mind there, because as I could see from many of the code comments underneath, that and also from my own experience, um yes, there's still good Chinese outbound tourism to particular ah Western European destinations.
00:06:07
Speaker
But Certainly not all. And um Eastern Europe has definitely, well, pre-COVID and now post-COVID, continues to just get stronger and stronger and stronger in some ways, um more strong already than some of the traditional Western European markets pre-COVID.
00:06:26
Speaker
I mean, I was going through some market research information this morning. I could see that Croatia is doing extremely well. They've they've put a lot of work into increasing flight connectivity with China.
00:06:39
Speaker
That's absolutely paying off. um Other markets, ah sorry, destinations, Switzerland is doing well. They've also made it a bit easier for the visa processes.
00:06:51
Speaker
ah Denmark is another winner in Western Europe. They've also made visas a bit easier and things like that. So they're doing well. And then naturally, France is still there. France is still a very popular destination for Chinese outbound tourists.
00:07:08
Speaker
I saw an article last week about specifically Paris, about how Chinese numbers to Paris particularly is really, really good. um and then And then you've got the closer to China home destinations that are still doing very strongly, Japan, um New Zealand.
00:07:29
Speaker
But so in other parts of the world, ah there's absolutely new winners and there are definitely um other destinations that are struggling.
Challenges for Thailand Tourism
00:07:42
Speaker
Absolutely, yeah. um it's It's interesting for me to see also the changes around Thailand. you know Once this absolute bastion of Chinese outbound tourism, now it just seems like they've they've been rolling with the punches.
00:07:57
Speaker
um And you know I do have some sympathy for the Tourism Authority there in that they've been they've been operating operating at such a high sort of burn for such a long time that that you know being number one in terms of international Chinese tourism arrivals, um the the only way is almost down from there. you know the The smallest sort of PR crisis can kind of push you over the edge um into that you just weren't as good as before.
00:08:27
Speaker
And um with an economy that's so reliant on tourism, it's it's it's obviously worrying for them. But um I'd also like to talk a bit about some of the stats you mentioned, Michael, about the the outbound tourism into you know the rest of Southeast Asia, especially Japan. Japan is definitely having a moment, despite the know the very visible September 3rd parades of the 80th anniversary of victory over Japan.
00:08:58
Speaker
And that's always the elephant in the room, but still, you know, um Japan tourism from China still still seems to be taking over very well. Yeah, totally. Extremely well.
00:09:10
Speaker
And um i mean, to to to go back what you were but saying about about Thailand, um ah see that for this year so far, Chinese outbound tourism to Thailand is down 35%.
00:09:21
Speaker
thirty five percent um And quite a lot of that tourism has now shifted to Vietnam and Malaysia. ah The latest stats that I could see for Malaysia, they've seen a 35% increase.
00:09:36
Speaker
I'm not sure if that corresponds exactly to the 35% decrease from from Thailand. um For the first half of this year, um Vietnam, the best I could ascertain was that there's between 30% and 40% increases.
00:09:52
Speaker
ah For the month of August, there was a 44% increase of Chinese tourism to Vietnam year on year. um but But I'm also, i mean, again, I must say I'm certainly not an expert on China, Thailand tourism, but but I have been reading quite a bit about it. and And I'm also not entirely convinced about many of the reasons given for for the the recent declines.
00:10:20
Speaker
Naturally, i think it is... as many are saying about safety, ah volunt volatility, things like that. but But some people also, some commentators also making ah statements about how Chinese outbound, that it's something related to the group versus FIT travel.
00:10:41
Speaker
They're also saying things like um that ah Chinese outbound tourists are are looking for more kind of experiential trips everything. But I'm not sure that that is that can be pinned on on on Thailand.
00:10:57
Speaker
I think Thailand, absolutely, you can... do incredibly immersive experiential trips. um And at the same time, i I'm not convinced that the increase of Chinese travel to Vietnam and Malaysia is purely FIT based.
00:11:19
Speaker
um I would like to, we'll have to wait and see till the end of the year till we see the breakdowns between uh group versus fit travel um but yeah i um i absolutely do have sympathy for thailand because because you're right that they're working and they always have been working extremely hard uh with with uh with the chinese markets so um i i do sincerely hope it's a temporary phase and i absolutely
00:11:49
Speaker
um hope that thailand will will get back on track with the the chinese market because they they do absolutely deserve it i i suspect that you are to something with the the groups versus fit dynamic and that's if you if you look at the you know the outbound travel demographics it's you know it's very much driven by um in terms of just volumes in terms of retirees.
Demographics Driving Travel Trends
00:12:18
Speaker
So that's going to lean more heavily towards group travel. In that sense, I think that you know the if if a an agency gets spooked by a variety of stories or if just the the general PR, you know like for example, the you know the cannabis ah regulation around Thailand has not been excellent um but which for the for the China market, which is which is also something that they're kind of looking at rotting back now as well.
00:12:45
Speaker
um But I know that's caused a bit of friction. That's caused a bit of, um you know, a little bit of a, ah not not ill will, but you could say ah sort of an asterisk that hangs over those, you know, the Thailand, and China tourism,
00:12:59
Speaker
ah corridor But um' i'm I'm fairly sure that this is a this can be pinned in large parts, or as anything can be pinned really, with what volume-based, and not spending-based, but volume-based Chinese outbound travel in 2025 is.
00:13:16
Speaker
the The new new graduates are unemployed um for a large sort of proportion.
00:13:27
Speaker
or they are entry level jobs, you know the demographic of sort of the you know the post ninety s they ah generally they generally have aging parents, they have have children, so unless they're very wealthy, you know again volumes for outbound travel for them are going to be low.
00:13:45
Speaker
it's going to be what they call it's going to be travel around so quick weekend out to the the countryside stay in the Airbnb experience this and that um but outbound travel is still very much reserved for um the wealthy few and also international wealthy Chinese as well and so yeah I think it would be fascinating actually to look at um the FIT versus group's breakdown Yeah.
00:14:15
Speaker
I mean, one one thing that's definitely pointing towards the continued growing strength of FIT travel outside of China is a recently distributed report by Airbnb,
00:14:31
Speaker
which was showing about ah Chinese searches on Airbnb for the upcoming October national holidays. Now, according to Airbnb, Chinese based ah searches on Airbnb have increased by twofold, ah specifically looking at ah focusing on the October national holidays.
00:14:51
Speaker
ah What was also quite interesting was that the most popular destinations being searched, um ah yeah, of course, you've you've got the natural um the the natural traditional markets there, but but also some unexpected ones. So you've got ah in the top searches, you've got Japan, you've got Italy, you've got France, you've got Spain, you've got New Zealand, you've got South Korea, you've got Indonesia, which is quite interesting over there. You got the UK and then you got the USA.
00:15:20
Speaker
um And I also find that still quite interesting because naturally, a game because of a little bit of, let's put it diplomatically, it's a little bit of ah volatility going on in the USA markets.
00:15:34
Speaker
um But that was definitely confirmed for me also by a another Chinese ah travel company, Zuchu, that arranged a for hiring of cars abroad, ah they told me that the USA market is still very strong for them. The UK market is still very strong for them, Australia, New Zealand.
00:15:54
Speaker
And um so that that that's quite interesting. The USA is still there. Absolutely. it's It's interesting just to kind of just to hop over to the the Airbnb topic. I remember it was probably about seven to 10 years ago, people were saying that ah The Airbnb phenomenon in China is not sustainable because of cultural reasons.
00:16:21
Speaker
The idea being that Chinese people like to stay in other people's houses, but don't like other people to stay in their houses. And I think that' that's been proven wrong, just about any theory that you can have about China.
00:16:35
Speaker
and at The Min Su, which is what an Airbnb is in Chinese, Min people and Su being house, keep staying in other of people's houses is a massive phenomenon. And the you know the price differential, just the the the value for money that you get,
00:16:55
Speaker
in if in China as well is is equivalent to Airbnb if you are budget conscious FIT traveler, young traveler then you know that these these are absolutely very well up and running and established and diversified um properties that you can find in just about everywhere from someone's broom closet in Huangpu in Shanghai to a beautiful villa out in the Himalayas. So, yeah, just a little comment on that. um
00:17:29
Speaker
Probably something that goes together with the more heightened consciousness about spending and cutting budgets, which doesn't bode well for hotels necessarily.
00:17:40
Speaker
But, I mean, if you are kind of eyeing the the um older and families-based China outbound markets, I think you're more or less okay. Yeah, yeah, totally.
Resurgence of Chinese Domestic Tourism
00:17:53
Speaker
And I mean, the the last ah topic that ah from my side, I would like to discuss for our listeners on this episode is ah more around ah also the Chinese economy. So so again, it it was really instructive to be cruising around on the streets of Beijing, Shanghai and Guangzhou, get a bit of a sense of of what's going on there.
00:18:17
Speaker
um and And one thing that I did find interesting was that, I mean, on the one hand, i hear from ah friends of mine from like a sentiment perspective that they seem to believe that in Hong Kong, at least, ah things have bottomed out, that things could only now get better.
00:18:37
Speaker
um And yeah, Whereas in in Shanghai, I definitely heard from some guys that live there, like in your neighborhood and stuff like that, that whenever they go to their preferred restaurants or barbershop or whatever, they're still noticing on a weekly basis particular businesses shutting down.
00:19:00
Speaker
um that there's they still a bit of an economic challenge there. um And then also what i what I found interesting during meeting with the the various tour operators ah was that still from ah the from the COVID times, I mean, i mean during during COVID, obviously, like in all countries, um many people were forced to like rediscover their own countries in terms of domestic tourism.
00:19:29
Speaker
And it seems in China that, in China specifically, that domestic travel is still huge. and And it's actually gotten quite a good hook into their own markets and that people are still, Chinese people are very much still considering and in some cases preferring to do domestic travel.
00:19:50
Speaker
over international travel. um It's not necessarily, it's not of of course, it's often about budget because it it is cheaper, naturally, to do domestic travel. um But as's also they've they've kind of discovered their own treasures of their own countries.
00:20:06
Speaker
ah ah One Chinese ah tour operator was telling me it's it's not a case that that the Chinese consumers don't have money. um it's It's just that they do want to be careful of how they ah spend their money because of the uncertainty over the near future.
00:20:24
Speaker
And at the same time, compounded by the fact that they've discovered great tourism in their own country. So there there's something also playing on that front.
Challenges in Chinese Airline Industry
00:20:33
Speaker
um And then lastly, i came across and an article last week where they were talking about how apparently Chinese airlines were were struggling. And they said two reasons for that. Number one was apparently a lot of the Chinese airlines were using...
00:20:53
Speaker
um actually more long-haul specific or appropriate planes for short-haul domestic.
00:21:05
Speaker
So there was a lot of waste ah there. um And then they were also saying that um just that the travel, whether it be tourism or business tourism numbers between ah the outside world and China hasn't fully recuperated.
00:21:24
Speaker
But I must say, I absolutely have to take articles like that with quite a pinch of salt, because I mean, since since ah Russia's invasion of Ukraine, I've pretty much exclusively been flying with Chinese airlines between Europe and China for the very simple fact that as it you save two hours, the the fact that the Chinese airlines can fly over a Russian airspace and the Europeans can't.
00:21:51
Speaker
And I must say, in in the beginning, when I was doing these flights, I would mainly see like majority, vast majority Chinese travelers on these on these flights between Europe and China.
00:22:04
Speaker
But nowadays, when I'm flying to China, I'm seeing it definitely a much growing um European ah guest component. I'd say on my last flights, like anything between 30 to 50% of the passengers on these flights were European.
00:22:20
Speaker
um And they were also younger. They were definitely in their 20s, in their It's like groups of guys and girls, like six friends six groups six frames or for friends and things like that.
00:22:37
Speaker
um So I was quite um encouraged to see that that that that this travel, ah the other way of Europe into China inbound absolutely is increasing.
00:22:49
Speaker
um So, yeah, I do have to, like I said, take some of these things doomsday scenario articles with quite a big serving of salt on top of it.
00:23:04
Speaker
Yeah.
Preference for High-Speed Trains
00:23:05
Speaker
Yeah, it's it's just I'd just like to add a comment you know for the domestic flight industry. the i hate to sort of hammer on about, i mean, there's been so much said about China's high speed trains, but ah really you can, if you are based anywhere in Eastern China,
00:23:25
Speaker
it just anything within sort of a thousand five hundred kilometer radius it just makes sense to take the high-speed train ah the HSR it just doesn't add up if you have to sort of add on the way most airports where you will land in domestic ah destinations in China are kind of far out into the almost into the next cities suburbs you take for example Pudong Airport and like Tianfu in Chengdu as well.
00:23:58
Speaker
And also, you know, what's the new one in Beijing? I keep forgetting Dashing. It's just, it's crazy, but you have to add two hours either way onto to your commute. You have to arrive early, go through baggage check and everything.
00:24:12
Speaker
yeah So it's small wonder to me that that domestic airlines are possibly not seeing the volumes that they did because China, you know, is really, and there are still improvements that can be made in the,
00:24:24
Speaker
in the HSR technology. So we'll watch that space. Yeah, absolutely.
00:24:33
Speaker
Okay, cool. I think that's so that's it that's a bit of a wrap for this week. Awesome.
00:24:43
Speaker
Cool, everybody.
Listener Engagement and Feedback
00:24:44
Speaker
Thank you for listening. And we look forward to sharing information with you next week again on the next episode of China Tourism Tuesday.
00:24:55
Speaker
Great. Thanks, guys. See you next time.
00:24:58
Speaker
If you have any questions or comments about the topics that we discussed on today's show, please feel free to reach out to us at marketingatcconsulting.com.cn or you can hit us up on LinkedIn at Create Consulting.
00:25:11
Speaker
We forward to your feedback.