China’s Year of the Water Dragon

23 January 2012

As I wandered around Chinatown with the locals and tourists last night marvelling at all the beautiful lanterns I wondered what the Year of the Water Dragon will bring for China and its increasingly wealthy citizens.  
Whilst there is evidence that the Chinese are investing more in the UK as they buy an 8.7% stake in London’s water company Thames Water , there are also clear signs that they are also coming to Europe in greater numbers.  UNWTO figures show that Europe is still taking the lion’s share of world tourist arrivals but Asia/Pacific arrivals are catching up. 

The latest ONS[1] figures shows that overseas visitors from the BRIC markets such Brazil, China, Russia visited the UK in greater numbers in 2011, whereas overseas travel by UK residents fell last year. Q3 2011 shows that there was a 9% increase in visits to the UK from overseas residents.[2]
China’s huge growth in GDP which The Economist forecasts will be 9.2% for 2011 is evidence that the Chinese will be travelling in ever greater numbers. As Chinese foreign direct investments span the globe in markets rich in natural resources, such as Africa and economies such as the UK promising “solid returns”, there is the inevitable increase in business travel that will follow.
Luxury brand retailers across Europe have been enjoying a big increase in wealthy Chinese tourists over the past two years.[3]  The Chinese authorities have been recently cracking down on counterfeit goods and it is no longer cool in Asia to carry fake branded goods which will all help to drive up this trend. Chinese tourists purchased an average 713 euros of luxury goods whilst travelling in Europe in 2010, more than double the value bought by Russian tourists.
The latest Euromonitor report for the top 100 cities for arrivals shows Hong Kong leading the pack and huge growth for Macau, driven by Chinese arrivals. The impressive Kai Tak airport has played a major role in the phenomenal growth of Hong Kong. It provides a lesson for London that its status and growth as a leading city will decline unless the thorny issue of London’s lack of airport capacity is fixed.
For those countries wanting to attract more Chinese tourists, the key is to obtain the Approved Destination Status (ADS) which allows Chinese tourists to visit in organised, pre-sold groups. This has driven up to 50% increases in Chinese visitors, according to those countries which have already received ADS, such as Australia, New Zealand, South Korea and more recently Canada. 
China is forecast to have 100 million outbound tourists by 2020[1], according to the Head of the Asia Pacific Region so it’s no wonder that many countries are pushing for ADS. In recent years China has started to see a trade deficit for the first time in 30 years, like the UK, as the Chinese are spending more abroad than inbound tourists spend in China.
As the yuan has increased in value more than 20% against the euro over the last few years (especially during the recent euro crisis), it is clear that we will be spotting many more Chinese tourists admiring those Chinese lanterns in Chinatown in the years ahead.
Want to know more?
World Travel Market will be running the first half day WTM Vision Conference in China, in association with CBN & MICE and World Travel Online on 10th May 2012 at the World Travel Fair at the Shanghai Exhibition Centre. For more information please click here.
Happy Chinese New Year to you all and do share your New Year stories with us.

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