New opportunities from Chinese tourism

This was a significant step toward liberalizing the sector, which until recently was restricted to local operators, many of them state-owned.
This reinforces the potential importance of China to Thailand. Given the onset of a new recession and a corresponding weakening of currencies in the US and Europe, traditional source markets for Thailand’s inbound tourism industry, the local industry  needs to find new sustainable growth markets and China is a logical candidate, especially considering its rising affluence.
Foreign companies have for years been allowed to operate inbound and domestic tourism services in China, but were excluded from servicing mainland Chinese wanting to travel overseas. Three joint ventures have now received licenses from the National Tourism Administration of China and will operate tours to Japan, Europe and the US.
While Beijing still maintains a tight grip on where China’s citizens are allowed to travel – there are currently 141 regions and countries on its “approved destination” list, including Thailand – the granting of licenses to foreign operators suggests that travelling overseas will become increasingly easier for mainlanders.
Statistics show that this emerging market is both large and lucrative. Around 57 million Chinese travelled abroad last year according to the Pacific Asia Travel Association (PATA). China’s travelers now spend a total of $55 billion each year when they travel internationally, up from $8 billion 15 years ago.
This upswing in spending not only reflects the greater spending power of Chinese consumers, but is also evidence of their increasing demand for quality. Simply put, wealthy Chinese are now much more willing to spend greater amounts of money when travelling, for example heading to luxury getaways such as the Maldives, putting paid to the myth that the country’s outbound industry is entirely focused on mass-market package tours.
Asia remains the most popular region for Chinese tourists, with more than two-thirds of them opting to travel within the continent, according to the China Outbound Tourism Yearbook 2011, published by the China Association of Travel Services and Ivy Alliance Tourism Consulting.
The top five destinations last year, excluding Hong Kong, Macao and Taiwan, were Japan, South Korea, Vietnam, the US and Malaysia. Chinese outbound travelers increased by 18 percent in the first quarter of this year to just over 16 million. The number is expected to rise by 15 percent to 66 million by year-end.
For those travelling from Beijing, Thailand is among the top four destinations, with  110,000 travelers from Beijing coming to Thailand in the first half of this year compared with the US (242,000), Hong Kong (207,000) and Japan (128,000).
The Tourism Authority of Thailand (TAT) expects the total number of Chinese tourists in Thailand this year to hit 1.4 million. Each Chinese tourist spends an average of 3,000 baht a day while in the country, and the TAT is planning to increase the amount to 4,000 baht by targeting specific segments such as golfers.
While it is encouraging to see that Thailand is one of the most popular destinations for Chinese tourists, clearly the kingdom faces tough competition from our regional neighbours. This competition will continue to intensify due to integration spurred by the coming of the ASEAN Economic Community (AEC) as well as opportunities for collaboration with other nations, such as those in Southeast Asia and the Mekong sub-region.
The TAT has made an intelligent move by targeting higher-value tourists from China but this is only the beginning. Both the public and private sectors need to take up the gauntlet. They can do this by getting to know the Chinese market and the tastes of Chinese holidaymakers and developing packages suited to them. They can also forge relationships with Chinese operators and our neighbours which will demonstrate that Thailand has a great deal to attract Chinese travelers.

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