Europe Must Do More for Its Chinese Guests - Term Paper Example

OUTBOUND TOURISM FROM CHINA Inserts His/Her Inserts Grade Inserts 6th November 2008 Introduction In 1994, the United Nations stipulated released Recommendations on Tourism Statistics, which defined various categories of tourism (Buhalis & Laws 2001). According to the recommendations, the three forms of tourism are domestic tourism, which involves residents of a country traveling within the country only; inbound tourism, which involves non-residents traveling into a given country; and outbound tourism, in which residents of one country travel from the country into another (Buhalis & Laws 2001). For instance, taking a China perspective, if a Chinese goes on a trip to Germany, that is an example of outbound tourism. China's outbound tourism is fast growing unlike in the past where many limitations hampered traveling (Earnshaw 2005). According to "BNET", China was the ranked the world's second fastest growing market for outbound tourism in 2007, in reference to Chinese touring overseas countries. Furthermore, the number of Chinese traveling to other abroad grew by over 25 per cent between 2000 and 2006 "BNET". For instance, in the year 2005 the Chinese made 31 million overseas trips (Cochrane 2008). The current high figures of outbound tourism from China did not grow overnight. China's policies in the past were restrictive and this minimized the number of travels by the Chinese in years before 1990 (Wen & Tisdel, 2001). For example, before 1990, the Chinese's travel abroad was mainly restricted to official visits or commercials functions rather than for holiday or leisure (Wen & Tisdel, 2001). Good tidings came in 1990 when China began relaxing its policies on outbound travel, first allowing visits to Southeast Asian counties for tourism purposes (Gu & Ratliff 2006). Perhaps this is the reason why outbound travel by the Chinese to the countries in this region is high. Along this line, "BNET" noted that the vast majority of overseas trips made by Chinese in 2005 were targeted for Hong Kong and Macau. In the 1998, the total number of Chinese who made overseas trips was 8.4 million, of which 5.2 travellers were doing business while the rest were on private functions (Wen & Tisdel, 2001). China's rising middle class income and an increasing crave to see the rest of the world make the country a significant outbound tourism market (Wen & Tisdel, 2001).. As cited above, China is progressively easing foreign travel policies and this adds impetus on the need to travel abroad. The rising levels of disposable income among the Chinese and constant exposure to foreign countries through television and the Internet have greatly contributed to the increase in outbound tourism from China (Prasad & Barnett 2004). The increase in number of travel agencies is indicative of the increase in number of outbound tourists. As an illustration, the number of travel agencies rose from 6,222 in 1998 to 11,552 in 2002 (Prasad & Barnett 2004). That a rise incomes among the Chinese and outbound travel policies have been phenomenal in promoting China's outbound tourism cannot be gainsaid. However, the two factors per se cannot be acclaimed to be determinants of outbound tourism. Other factors such as government limitations on the countries to which to travel come into play. For example, there is a list of countries that have an "Approved Destination Status" to which Chinese can freely travel (Lew et al 2002). Outside these countries, Chinese towards are perceived to be risking their lives (Lew et al 2002). The above factors and many others such as personal preferences and choices affect China's outbound travel. A discussion of the same and appraisal of relevant statistics forms the basis of discussion of this paper. Factors that have promoted China's outbound travel and tourism Changes in outbound travel policy China had a strict outbound travel policy that barred the Chinese from traveling overseas until 1983 (Zhang, Pine & Lam 2005). The Chinese government started allowing outbound travel in November 1983 when residents of the Guangdong province were given the green light to visit their friends and relatives in Hong Kong and Macau (Lew et al 2002). However, there was a condition that the trips had to be organized by recognized travel agencies and that the traveling cost would be paid by the hosts in the destinations (Zhang, Pine & Lam 2005). This move marked the beginning outbound travel from China (Zhang, Pine & Lam 2005). In the beginning of 1990s, outbound travel started developing quickly and organized tour could be made in Singapore, Thailand and Malaysia, which were the first countries to be opened for outbound travel for the China mainland travelers (Zhang, Pine & Lam 2005). Later changes in policy included the addition of Philippines to the list of the countries that the Chinese were allowed to travel to (Boniface & Cooper 2005). However, there were restrictions as only seven travel agencies were allowed to service outbound travel arrangements. These were China International Travel Services, Guangdong China Travel Service, China Travel Services, Guangdong Overseas Travel Corporation., Fujian Overseas Travel Corporation, China Youth Travel Services and Fujian China Travel Services (Zhang, Pine & Lam 2005). Outbound travel from China increased when rules on outbound travel were revised to allow more movement in 1997 (Boniface & Cooper 2005). Since then, outbound travel increased exponentially. For instance, outbound tourism increased by 57 per cent between 1998 and 1999 (Zhang, Pine & Lam 2005). China's outbound tourism is mainly pegged on two aspects: permission to travel and the ability to do so; and this ability depends on income (Lew et al 2002; Zhang, Pine & Lam 2005). Nevertheless, the overriding factor is permission by the government to travel. The list of countries with the "Approved Destination Status" limits the countries that can be visited by the Chinese (Harper et al, 2005). For instance, due to poor relations between China and USA, the Chinese were not allowed to travel to USA until recently in late 2007 (Graff, 2008). High levels of income China's economy has grown tremendously over the years. A piece of evidence for this is the high income for individuals, which necessitates spending on activities such as outbound tourism (Harper et al, 2005). As search, Guangrui (2006) noted that the Chinese expended more than US$ 15 billion on outbound tourism in 2002, a figure that increased to US$ 19.1 billion in 2004. A critical evaluation of the expenditure figures since outbound tourism became practical in China reveals that there has been a steady increase since then. This means that as incomes increase and as well as population, there is a burning desire to travel to other parts of the world for leisure if not for business. Table 1 shows China's outbound tourist expenditure between 1990 and 2005. Table1: China's outbound travel expenditure between 1990 and 1995 Year Outbound spending Spending (USD billion) Annual growth(%) 1990 0.470 - 1991 0.511 8.72 1992 2.512 391.58 1993 2.797 11.35 1994 3.036 8.5 1995 3.688 21.48 1996 4.474 20.58 1997 8.130 81.72 1998 9.205 13.60 1999 10.864 18.02 2000 13. 114 20.72 2001 13.909 6.06 2002 15.398 11.44 2003 15.187 -1.37 2004 19.149 26.09 2005 21.795 13.82 Source: China State foreign Exchange Administration- China balance of payment (BOP) Sheet (1999-2005), cited by Guangrui (2006) The expenditure on outbound travel by China cannot be attributed to just a few individuals traveling overseas. In contradistinction, it lays credence to the ever-increasing number of Chinese who travel overseas each year (Table 2). Table 2: China's outbound departures and annual growth between 1995 and 2005 Year Departures Growth (%) 1995 4,520,000 21.0 1996 5,060,000 12.0 1997 5,323,900 5.2 1998 8,425,600 Not comparable 1999 9,232,400 9.6 2000 10,472,600 13.4 2001 12,000,000 11.5 2002 16,600,000 36.86 2003 20,220,000 21.80 2004 28,850,000 42.68 2005 31,000,000 7.50 Source: CNTA: Year Book of China Tourism Statistics, cited by Guangrui (2006) The high figures of outbound travel are explained by the fact that all cross-border trips from China are considered to be made by tourists (Guangrui 2006). However, only those who travel overseas in tour groups and some as independent travellers are identified as real holidaymakers or leisure tourists (Guangrui 2006). Their travel plans of course depend on the wherewithal they have for leisure (Guangrui 2006), which revolves around high income. Income largely impacts on other factors that make travel possible. Hence, factors such as where to go and when to do it, where the tourists come from (the particular region in China), why travel; and what to do during the trips are important (Guangrui 2006), Where to go and when Chinese outbound tourists travel mostly to countries within Asia and the Pacific region (Guangrui 2006). In particular, frequented areas are the North East and South East Asian countries, which account for 90 per cent of China's outbound tourists (Guangrui 2006). But Hong Kong and Macau account for 70 percent of all the areas most visited by Chinese tourists. Of the two countries, Hong Kong hosts the larger proportion of the tourists and therefore leads as the county to which most Chinese outbound tourists travel (Guangrui 2006). Nevertheless, other countries in other continents such as Australia, Germany and Britain are also gaining popularity as destinations for Chinese tourists (Guangrui 2006). Although Hong Kong is an appropriate destination all year round, Chinese tourists frequent the country during the period between mid-September and end of February ("gov.cn"). This is the time when the weather in Hong Kong is cooler ("gov.cn"). It is during the same period of the year that most outbound travels are booked in China ("gov.cn"). Some outbound Chinese tourists have limited knowledge about overseas destinations and therefore just travel to visit landmarks and major tourist attractions rather than little known areas ("gov.cn"). Chinese tourists are also influenced to travel to destinations where they can easily get their good food ("gov.cn"). Language barrier limits the desires of many Chinese tourists to travel since most of them are not fluent in or familiar with common languages such as English, French, Spanish and German (Guangrui 2006). Where do the tourists come from and what is their average travel South China seems to be the origin of most outbound tourists as ten percent of the residents participate in outbound tourism as compared to two per cent and three per cent in the North and East (combined) and West respectively ("Travel Daily News"). On average, South China residents spend USD 2,597 per trip and make about three trips a year ("gov.cn"). Tourists from the other regions do not travel a lot but when they do; they spend lavishly, preferring to enjoy luxuries such as five star hotels. For instance, Travelers from North China spend on average USD3, 506 per trip ("gov.cn"). On the contrary, most people from the south do not spend lavishly but travel frequently. Most of the tourists who make frequent trips are affluent and come from large cities such as Beijing, Guangzhou and Shanghai (Guangrui 2006). Figure 1 shows a summary of expenditure on outbound leisure by Chinese tourists from various regions in China Figure 1: Total expenditure for leisure trips by outbound Chinese tourists (by region) Source: adapted from "Travel Daily News" (May 07 2008) As described above, lavish expenditure by tourists from regions other than the South (North, East and West) accounts for the higher values despite the fact that they do not travel frequently. Why do they travel and what do they do during the trips Outbound Chinese tourists travel to sample the marvels of nature in other parts of the world (Clark, Ogawa & Mason 2003). They use the leisure trips to view landmarks and other scenic suites in the countries they visit (Clark, Ogawa & Mason 2003). However, that is not to say that their trips are usually limited to nature. The tourists are also motivated by the zeal to go on shopping sprees overseas ("gov.cn"). An international tax refund service known as Global Refund noted that the Chinese recorded a 41 per cent growth in tax-free shopping between 2004 and 2005, thanks to overseas shopping ("gov.cn"). Germany accounts for the largest market for Chinese tourists shopping in Europe ("gov.cn"). The tourists spent US$ 60 million in shopping in Germany in the year 2003, a figure that is well above that spent in other countries such as Italy, Austria, Denmark, the Netherlands, Sweden, Switzerland and Britain by Chinese tourists ("gov.cn"). Other factors that have enabled outbound Chinese tourism Relaxation of government control Over the last decade, the Chinese government has relaxed even more the controls on outbound travel (Singapore International Chamber of Commerce 1995). In addition, the limit on foreign currency brought into China by residents from overseas has been frequently lifted while the use of credit cards in financial transactions has been formalized (Guangrui 2006). Increased leisure time Since 1995, China has had the practice of a two-day off per week (Guangrui 2006). In addition, the Chinese government introduced a three-week long holiday that is achieved by bridging weekends and public holidays (Guangrui 2006). Consequently, the Chinese have ample time to make outbound trips for leisure. Improved international relationship China has overcome previous problems that in the past affected its international reputation such as bird flu, SARS, wars, and terrorism (Buhalis & Laws 2001). The country now enjoys good bilateral relationships with other countries, which creates and avenue for the Chinese to tour other countries (Guangrui 2006). Aggressive promotion China has over the recent years used events such as the Annual China Expo to market international destinations (Guangrui 2006). This strategy has been able to woo marketers from overseas while encouraging Chinese to make outbound trips (Guangrui 2006). Conclusion Outbound tourism from china has improved since 1990s when China softened its outbound travel policies. The list of approved destinations to which Chinese can travel has also been lengthened; hence, Chinese tourists can travel to several countries without much restriction. Hong Kong is the country most visited by Chinese tourists, leading others such as Macau and countries of the North East and South East Asia region. European countries such as Germany and Britain are also gaining popularity as travel destinations for Chinese tourists. Chinese tourists travel to view scenic features and for shopping. High income in China has caused an increase in outbound tourism. This is coupled with other factors such as promotional activities, relaxed policies and China's improved relation with other countries. 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