Bird's eye view: Chinese tourism to the European Union
by Welcome Chinese
China Market Destinations Europe
china European Union tourism travel
The European Union – taken as a whole – is the most visited area in the world. But what stands out in a closer look? According to the President of the European Commission, Jean-Claude Juncker, tourism is one of the sectors with the most untapped potential to generate economic growth and create jobs.
AN ERODED LEADERSHIP - However, competition from emerging destinations is increasing. In 2000, the EU had 50% of the world's market. Now the EU below 40%, and forecasts indicate only 31% by 2030. The EU growth rate is 2.1% compared to the global average of 3.5%. Only 10% of its tourists come from outside the EU, compared to 27% of those from the Asia-Pacific and 25% from of the Americas.
A detailed view is expressed concerning Chinese outbound tourism, already the most significant in terms of absolute numbers and spending power. It has been growing rapidly and in 2013 there was a deficit on the tourism balance of trade of EUR 57,9 billion. The travel balance of trade from China to the EU was in deficit of EUR 2 billion in 2013, with tourist receipts from EU28 tourists counting for EUR 2,7 billion whilst the expenditure of Chinese tourists to EU amounted to EUR 4,7 billion.
THIS SLICE IS NOT ENOUGH - Outbound travel from China has been growing fast and steadily over the past 15 years (more than any other source market), with a steep increase since 2010. Nowadays, China is the growth engine of the international tourism market. According to Tourism Economics, destinations worldwide reported some 68 million arrivals of Chinese visitors in 2014, of which 9 million reported destinations in Europe. This is around 1.5% of all international tourist arrivals to Europe (15th most important source market for Europe in 2013).
Chinese tourism to Europe grew by 18% per year between 2008 and 2013, despite the impact of the economic and financial crisis. In 2013 Europe received 1/3 of all trips made by Chinese to destinations outside Northeast Asia. Tourism Economics forecasts tourist arrivals from China to grow by 4.6% this year and maintain the pace around 5% increase per year through 2019. In 2013, the most visited destinations in the EU were France (1.3 m arrivals), Germany (0.8 m), Austria (0.4m) and Italy (0.3m).
In 2014, tourists from China to the EU counted for 5% of the number of nights spent by non-EU tourists. This share places Chinese tourists in the 3rd position among non-EU tourists visiting the European Union, the first two positions belonging to tourists coming from US with 17.8% and Russia 14.9%.
Compared with 2005, extra-EU tourism in the EU increased by 75% in 2014, particularly driven by a boom in the number of nights spent by tourists from China (+282%), Russia (+248%) and Brazil (+215%) whereas growth from more traditional markets were moderate (US +13%) or even negative Japan (-11%). The three main EU destination countries for Chinese tourists in 2014 were Italy at 21.4%, UK 21% and France 17.6%.
OUTLAY TALKS - The average expenditure of a Chinese visitor on a trip in the EU is €2,800. Chinese travelers mainly come from the large urban centers of Beijing, Shanghai, Guangzhou and Shenzhen. Travel is traditionally concentrated in October-May (golden weeks), and one in five Chinese travelers books a holiday online (591 million Chinese internet users and 464 Chinese accessing Internet via smartphone in 2013). One-third of all trips are made via a travel agent. Although most Chinese are first-time travelers, looking for highly structured and economical packages, do-it-yourself tourism is growing rapidly, with more and more Chinese looking for diversified and niche products.
Australia is investing heavily in China with an ad hoc program. China is also a priority market for the USA. The Russian Federation is a relevant trading partner for China: the 2013 Tourism Year was established to foster China-Russia cooperation in tourism. Europe and the USA are privileged destinations for Chinese travelers. The USA has an advantage because it is seen by the Chinese as being more attuned to Chinese tourists' needs. The dispersed tourism offers of Europe are a barrier to Chinese travelers, who do not have a deep knowledge of Europe's geography and are discouraged by the difficulties of arranging travel independently.
From 1995 to 2005, the population of China’s middle class—defined here as households with annual incomes ranging from €5,000 to €22,000—grew from close to zero in 1995 to an estimated 87 million in 2005, according to MasterCard Worldwide, Asia Pacific. China’s middle class will jump to 340 million by 2016. The purchasing power—disposable income minus savings—of China’s middle class is also growing. In 2006, around 39% of urban households were middle class. By 2016, that percentage will likely rise to 60%. At present, the middle class accounts for 27% of China’s total urban disposable income.
GOOD WILL AND CONCRETE ACTIONS - With an effort to attract new investments and to speed growth, the European Parliament set as priorities the strengthening of the competitiveness of the tourism sector. The target is to increase the number of travelers from key markets of third countries, such as China, India, Brazil or Russia. For this, the EU has already implemented an 18-month communication campaign in six target countries (Brazil, China, India, Russia, Argentina and Chile) between 2012 and 2013. This campaign aimed at attracting tourists from the target markets to discover Europe. Furthermore, a new European Parliament pilot project, namely "World bridge tourism," focuses on the task of attracting more Chinese tourists to Europe.