“Profile of Chinese Outbound Traveler and New Government Regulations”

Dr. WANG Xinjun Managing Director,

Ivy Alliance Tourism Consulting Co. Ltd.

1. Chinese Outbound Tourism A Booming Market

120

100

90

80

70

60

50

40

30

20

10

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Travelers

Year

2009

47.66

83

Sta

tistic

s an

d P

redi

ctio

n of

Chi

nese

Out

boun

d Tr

avel

ers

1998

-202

0 (M

illio

n)

Average annual growth between 1998 – 2009: 20% Chinese outbound travelers in 2009: 47.66 million

According to Chinese government, Chinese outbound travelers by 2015 will reach: 83 million

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

100

2009 �

Market Structures of Chinese Outbound Traveler

(excludes Hong Kong, Macau, and Taiwan)

Jan. - Aug.2010 �

6.8%� 25.6%� 12.7%� 12.8%� 28.8%�33.6%�

29.6%�23.0%�

Month�

Departures(‘000)�

Growth of Chinese Outbound Tourism 2010

Growth Rate of Chinese Citizens Traveling to Different Continents (Jan. – Aug. 2010)

•  Strategic change of Chinese tourism industry   Upgrade from “important part of tertiary industry” to “strategic pillar

industry of national economy.”

•  Strategic objective of Chinese tourism industry   Evolve from major tourism country to leading tourism country.

•  Development Method of Chinese tourism industry   Concentrate more on quality instead of only quantity   More emphasis on benefit instead of only scale

Chinese Tourism Entering a New Stage of Development

•  2.1 Program for Quality Upgrading of Tourism Services (2009-2015)

•  2.2 Regulation on Travel Agencies

•  2.3 China Outbound Tourism Quality Service Certification Program

•  2.4 Opinions of the State Council on Accelerating the Development of Tourism Industry

•  2.5 National Leisure scheme

•  2.6 “Measures for Administration of Outbound Tours by Chinese Citizens” being revised

2. New Policies and Regulations of Chinese Tourism

•  To improve the tourism service quality system;

•  To accelerate the construction of tourism standardizing;

•  To promote tourism quality evaluation and release system;

•  To enhance the credibility of tourism enterprises, accelerate the maturity of tourists and improve their travel satisfaction;

•  To nurture and recommend the quality destinations, suppliers and travel itineraries;

•  To establish the evaluation project of tourism service quality.

2.1 Program for Quality Upgrading of Tourism Services (2009-2015)

•  The new “Regulation on Travel Agencies” was adopted in May 2009, which further loosen the control of requirements for travel agencies to operate outbound travel business.

•  Clamp down on “Zero-fee” tour operation and promote improved quality of tourism services.   Strengthen protection for tourists;   Higher and more specific requirements for quality of services provided

by travel agencies;   Stricter supervision and management on travel agencies and clamp

down on low-cost and low-quality travel products;   Travel agencies bear legal responsibility on breaching the regulation.

2.2 Regulations on Travel Agencies

•  The QSC program will accelerate the transformation, upgrade the outbound travel products and develop high-quality outbound travel product;

•  The QSC program will help the Chinese tourists and travel agencies to identify high-quality suppliers and make rational choices;

•  Through the QSC program, the concept of high-quality service will be deeply rooted in the minds of Chinese tourists.

•  It will educate and lead the market towards healthy and orderly development.

2.3 China Outbound Tourism Quality Service Certification Program (QSC Program)

•  The Chinese government issued “Opinions of the State Council on Accelerating the Development of Tourism Industry” on December 1, 2009, stating the Chinese government attaches great importance to tourism development.

•  Identified that tourism is a modern service industry to make the people more satisfied as well as a strategic pillar industry in the national economy.

•  The official goal of outbound tourism development is that the number of Chinese outbound travelers will reach 83 million with an annual growth of 9% by 2015, and the tourism service quality will be improved significantly.

•  To improve quality of tourism service, the Chinese government emphasizes full implementation of the “Program for Quality Upgrading of Tourism Services” and improvements of the tourism standard system.

2.4 Opinions of the State Council on Accelerating the Development of Tourism Industry

•  The Chinese government has taken stimulating measures and issued policies to promote the national travel consumption.

•  The plan calls for further implementation of paid vacations, incentive travel, education travel, retiree travel, etc.

•  The plan guides Chinese citizens' leisure travel toward a regular, secure and sustainable direction of development.

•  National Leisure Scheme is expected to launch in 2011.

•  The scheme will further promote the growth of Chinese travelers’ outbound consumptions.

2.5 National Leisure Scheme

•  Developing orderly Chinese outbound tourism;

•  More open policies for outbound tourism;

•  Enhancing the management of tourism service quality.

2.6 Measures for Administration of Outbound Tours by Chinese Citizens Being Revised

•  Chinese outbound travelers are becoming mature, so price is no longer the only key factor to plan trips;

•  High-end traveler groups have been formed;

•  High quality travel product is becoming more and more popular;

•  Chinese Government has been actively promoting the transition and improvement of the travel product.

Chinese Outbound Tourism Market in Transition

3. Potential Tourist Source Markets of China

Tourist Generating Market in North China

The number of outbound travel agencies �

The number of outbound travel agencies �

Tourist Generating Market in South China

Tourist Generating Market in East China

The Number of Outbound Travel Agencies �

Other Tourist Generating Markets in China

Source: CATS & Ivy Alliance Survey

4. Behavioral Characteristics of Chinese Outbound Tourists

The Preference Companion for Outbound Tours

RMB �

Exchange Rate: 1 US dollar = 6.7 RMB �

Income Structure of Chinese Tourists to Select Destinations

RMB �

Exchange Rate: 1 US dollar = 6.7 RMB �

Overseas Expenditures of Chinese Tourists

Expenditures by package-tour tourists (excluding payment to travel agencies)�

Overseas expenditures of Chinese package-tour tourists (Excludes payment to travel agencies)�

Outbound Consumption Structure

Types of commodities for Chinese tourists’ overseas shopping�

Preferences on Shopping

RMB �

Asia�

Americas� Africa �

Europe �

Oceania �

Exchange Rate: 1 US dollar = 6.7 RMB �

Overseas Expenditures of Chinese Tourists by Region

Favorite Types of Traveling (2010-2011)

Island Vacation

Cruise Tour

Trends of Outbound Travel Products (2010-2011)

F.I.T

Theme Tour /Itinerary

•  Opportunities:   Island destination tours have become the most favorite travel product

for Chinese travelers in 2010;   Island resorts are expected to be the hotspot in Chinese outbound

tourism market for the next 10 years;  Guam has great attractiveness and mystery to Chinese travelers;  Guam is the nearest U.S. territory to China.

•  Challenges:  No direct flight, extra travel time and expenses;   Inconvenient U.S. visa application procedures.

Opportunities & Challenges for Guam

•  Establish an image of a high-quality tourism destination;

•  Show Chinese travelers that Guam is a unique and distinctive island resort destination;

•  Provide high quality, convenient services as well as information in Chinese;

•  To develop the Chinese high-end outbound tourist market;

•  Convenient Visa Application/Policy;

•  Direct Flights

How to Attract More Chinese Travelers to Guam

Guam: The Next Hotspot for Chinese Tourists

Thank you! 谢谢! �

Dr. WANG Xinjun

Contact : forum@outbound-tourism.cn Tel:+86-10-62247696

Fax: +86-10-62279624 www.outbound-tourism.cn