China's highly lucrative outbound tourism market has "great potential" for future growth, and this, in turn, has generated "tremendous business opportunities" for tourist destinations across the world, according to a new report carried out by the World Tourism Organisation, in conjunction with the Regional Program for Asia and the Pacific, in collaboration with the Program for Statistics, Trends and Policy.
The study, titled Penetrating the Chinese Outbound Tourism Market, demonstrates that China is now the world's largest source of outbound tourists. UNWTO's secretary-general Taleb Rifai explains this was in terms of both quantity of trips abroad and expenditure.
"China has become a key source market not only for many destinations in Asia and the Pacific but also for destinations in other regions of the world which see a steady influx and growing interest from Chinese tourists," he said.
China became the world's top spender in international tourism in 2012 and since then, it has led global outbound travel. Tourism expenditure from China has grown exponentially over the years. Most dramatically, it went from $24 billion in 2006 (3 percent of the world's total) to $261 billion in 2016, which is 21 percent of the world's international tourism spending.
According to the latest issue of the UNWTO World Tourism Barometer, international tourism has grown on a global scale. Over 1,235 million international tourist arrivals were recorded globally in 2016, some 47 million more than in 2015, or an increase of 3.9 percent.
With 615 million arrivals in 2016 - half of the world's total - Europe is the most visited region worldwide. Europe is followed by Asia and the Pacific, which recorded 309 million arrivals or 25 percent.
The Americas welcomed 200 million international tourists (16 percent of the global figure). Meanwhile, Africa represents 5 percent of international arrivals and the Middle East received 4 percent.
According to the report, what sparked this growth in outbound travel began at the turn of the 21st century was a combination of "increasingly loosened policies, diversifying consumer demands and profound changes in the market."
While the number of outbound tourists maintained double-digit percentage growth year on year from 2002 to 2013, the quantity of Chinese outbound tourists surpassed a record 100 million mark in 2014. Thanks to higher incomes, a massive population, rapid urbanisation and relaxation of restrictions on foreign travel, that year China overtook the USA as world's largest outbound travel market, both in terms of generated arrivals and total travel expenditure. Ever since, the country is the largest source of international tourism worldwide.
According to the report, it was China's millennial demographic the one that constitutes the majority of the country's outbound tourists. Millennials are also behind the development of the sophisticated Chinese free independent market, which is also known as FIT.
"The Chinese FIT market is extended to increasingly distant destinations. Tourists now are spread across South-East Asia, Africa, North and South America and even the Polar regions," the study suggested. The bulk (85 percent) of Chinese outbound travel is to major city destinations, which receive almost a half of all Chinese travel in the respective country. Large cities are the best equipped to suit Chinese tourists' form of travel, which is package trips, including group tours with multiple destination stops.
The report also gives detailed recommendations on strategic planning and marketing approaches when entering the Chinese outbound tourism market.
It outlines how many destinations have "successfully expanded business into the Chinese market by developing a Chinese market-focused strategic plan and taking tailored marketing approaches to adapt to the characteristics of the Chinese market."
US and Canadian companies are aware of the profitability of the young crowd and, thus, they are targeting students and providing tours of overseas schools during the months of July and August, when Chinese students take summer vacations.
Meanwhile, Japan has extended its multiple-entry visa for China's business, cultural and artistic visits from five to ten years and also simplified "the procedures of single-entry visas for undergraduate and postgraduate students studying in 75 colleges and universities directly under the Ministry of Education."
The study forecasts that outbound tourism will continue to grow and destinations will continue to compete to attract Chinese tourists.