Like so much of travel, it was inspired by romance. A few years ago, 29-year-old Shanghainese Ye Fen watched Summer Holiday, a movie starring Hong Kong actress Sammi Cheng as the owner of a gorgeous island beach. In the movie, Cheng falls for a laidback beach bum on her island. It was shot in Redang, an island off the east coast of peninsula Malaysia.
Ye Fen was so impressed by the celluloid Redang she decided to visit the real thing. In 2006, she made it to Malaysia – visiting Kuala Lumpur and Kuantan – but missed Redang because of the annual monsoon season.
“I went at the wrong time,” she said. “But I’ll be back when the season is right.”
Life’s a beach
In 2006, Ye Fen joined 439,000 Chinese in visiting Malaysia. The country and its Southeast Asian neighbors are some of the most popular destinations for Chinese tourists. But the region will have to subtly change the way it sells itself to the Chinese as the market matures.
Southeast Asia looms large in the short history of Chinese outbound tourism. Chinese tourists emerged as a major factor in the region eight years ago. In the 1980s and 1990s foreign travel was largely limited to official trips and missions.
A UN World Tourism Organization (UNWTO) study shows that the majority of outbound travel from 1993 to 1999 was for “public reasons.” In 2000, the scales tipped. Official travel took up 46% while privately funded travel represented 53% of outgoing traffic. That year, 5.6 million Chinese paid for trips abroad with their own income.
“International tourism [for the Chinese] in a real sense started in this century; I would say from 2002 or 2003 onwards,” said Xu Jing, regional representative for the Asia and the Pacific section at the UNWTO.
Southeast Asian countries have benefited from Chinese tourism policy (see box). According to statistics from the Association of Southeast Asian Nations (ASEAN) Secretariat, China was the third-largest source market for the region, accounting for 3.4 million arrivals.
“It’s a bit like unbolting the gate,” said Russell Arthur Smith, vice dean of the Cornell-Nanyang Institute of Hospitality Management in Singapore. “You’ve got all these people who are dying to go and they’ve got the money, but they lack official destinations.”
Southeast Asia welcomed Chinese tourists. Tourist dollars – or renminbi – boost regional economies. The World Travel and Tourism Council estimated that tourism and travel contributed US$46.9 billion, or 3.9% of gross domestic product, to Southeast Asia. The industry provides 21.4 million jobs, or 8.4% of total employment, in the region.
But Southeast Asia’s long association with China means its novelty is wearing off. Newer long-haul destinations like Europe and Australia are increasingly becoming options for Chinese travelers. Cross-border destinations such as Hong Kong and Macau, too, are offering new attractions.
“Many markets worldwide are now eyeing China very heavily as the next big source market to capitalize on,” said Parita Chitakasem, travel and tourism account manager at research firm Euromonitor International. “Key tourist destinations will be competing for a slice of the great China pie.”
This is compounded by artless marketing to sophisticated Chinese tourists.
“When China first opened up, whoever was able to go abroad usually belonged to the elite,” said Xu. “However, the products on offer at the beginning, especially in ASEAN countries, were mass tourism products. This mismatch between demand and supply led to a degree of disappointment in ASEAN products and repeat visitors became a problem.”
Some tourism authorities are already changing tack. Public relations firms Bentley has been retained by the Singapore Tourism Board (STB) in China to mind its image. Ryan Kwan, an account director at the firm, said STB’s marketing in China has become more complex.
Bentley now conducts campaigns that distinguish between tourists from “tier-one” cities like Shanghai and Beijing, and “tier-two” cities, like Chengdu. In the past, STB had treated China as a large, undifferentiated market.
“In 2006 [for tier-one cities] we changed the whole image of Singapore. We promoted all the nightlife, all the shopping. For tier-two cities, we still do very basic sightseeing stuff,” Kwan said.
Singapore has plenty of ammunition in its tourism arsenal. Although the country doesn’t make much in terms of intra-state travel, new attractions are under construction. These include two mega-casinos, known there as “integrated resorts,” that are family-friendly but still rival those in Las Vegas or Macau. The Orchard Road shopping strip is being refurbished and expanded, while tourists can see the skeletons of new luxury malls like ION Orchard are being clad in steel and concrete.
Kwan says the marketing campaign for this year will take these new attractions into account. “With these new things coming up, STB is trying to do a very futuristic Singapore.”
Thailand, long the gateway destination to the region, is pushing a plusher version of itself, too. According to the UNWTO, most tours from China have multi-country itineraries that begin in Thailand. The Thailand-Malaysia-Singapore combination, for example, is popular.
The Tourism Authority of Thailand (TAT) now discourages cut-price tours. The TAT’s Beijing director, Amnuay Thiamkeerakul, says “KB” tours (for kickback) were a problem in the past. These are packages with low advertised prices but where operators get a cut if they force tourists to shop at certain stores.
“Chinese people are more educated now. They know,” he said.
The TAT has drawn up guidelines for “quality tours” and keeps a blacklist of firms that misrepresent their products. It is also promoting places like Chiang Mai and Kanchanaburi instead of traditional haunts like Pattaya and Phuket. Tourists are encouraged to play golf and go to luxury spas – and they’re willing to pay.
“[Chinese tourists] respect the real cost of the package,” he said.
Chinese outbound travel has a bright outlook. The UNWTO classifies outbound Chinese tourists as either “rich” or “middle class,” that is, monthly family incomes exceed RMB5,000 (US$691). The size of China’s middle class is contended. The UNWTO says 50-60 million people; others, like Swiss bank UBS, say there are 20-70 million middle class Chinese.
In any case, nearly a quarter of the middle-class, says the UNWTO, have traveled abroad. It’s 40% if travel to Hong Kong and Macau is counted.
Other trends, like increased credit card use in China, promise to boost tourism spending. The STB reports that Chinese Visa users spent US$13 million in the country last year, up 87% from 2002. Euromonitor says that Chinese tourists spent US$10.2 billion on shopping abroad in 2007. Entertainment expenditure while on holiday is growing by 18-20% annually.
The outlook is bright enough to blind regional authorities to everyday concerns.
“The market for Chinese tourists is so big,” said the TAT’s Thiamkeerakul. “So sometimes I don’t care about competition.”
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