China is beginning to influence and shape global tourism as its population becomes increasingly affluent and internationalised. Bart Tompkins, Managing Director of Amadeus China, says that improvements to China’s aviation industry and the further gradual loosening of certain travel restrictions means that the number of Chinese people travelling to foreign destinations will only continue to increase for years to come.

The United Nations World Tourism Organisation (UNWTO) announced last month that Chinese now rank as the highest-spending tourists in the world. With USD 102 billion spent on trips overseas during 2012, Chinese travellers have leapt ahead of notorious big-spenders from Germany, the United States and Russia.[1]

This milestone came as no shock, with such a massive and growing population of travellers in China. What continues to surprise many experts is the speed at which Chinese travel continues to grow. Chinese travellers made 83 million overseas trips in 2012, compared to 10 million in 2000. This is not only fuelling growth within China, but also the rest of the region. Arrivals from China to other Asia Pacific destinations have been increasing at an annual rate of 12 per cent over the past few years, and China now generates 18 per cent of all arrivals at Asia Pacific destinations.

It is forecast that by 2030, China could have 200 million outbound travellers; that looks to be on target based on the current pace of growth. However, continued cooperation, ongoing liberalisation and investment in new technology will be needed to ensure that China stays on its fast track and fulfils this prediction.

The Power of Choice

Most international airlines have known for many years that China represents a significant opportunity due to its sheer size, and that the volume of Chinese travellers going overseas for business or leisure will only continue to grow. The number of outbound travellers each year from China is still equivalent to only four per cent of the total population, and around 15 per cent of the total middle-class population.[2]

International carriers have increased flight services to China, introduced Chinese language on board their aircraft, and offered Chinese meals to please the local palate — all in an effort to compete for a slice of the Chinese travel pie. And the Chinese travelling population has been eager to fill their seats, particularly when they have found competitively-priced fares to destinations like Europe and the US. Our research shows that Chinese travellers increasingly want to go further afield and want the freedom to book their own travel itineraries rather than following scheduled tour groups. Yet their access to international airline bookings has been somewhat restricted.

Unlike the rest of the world, global distribution systems (GDS) have not been able to operate in China. This means that technology has not always been able to evolve in line with global standards and the tourism industry in China is using a system that is relatively restricted in some areas.

This has meant that local travel agents don’t have the option of working with a GDS like Amadeus to search flights and make reservations. They have to rely on the local provider, TravelSky, with often less-evolved technology, which can mean travel agents resort to time-consuming manual processes to check fares and confirm flights for their customers.

Last October, with the publication of new regulations from the Civil Aviation Administration of China (CAAC), a gradual change is due to take place. Global distribution systems will be able to start working with Chinese travel agents to help them deliver better service and more travel options to Chinese travellers. In turn this will help international airlines access the ever-growing Chinese travel market. This reaches beyond airlines as well, with international hotels, cruises and other travel providers also set to benefit.

However, while the regulations have been approved actual implementation is not yet completed.  But change is hopefully underway and, if so, it can only mean good things for the Chinese travel industry.

Other restrictions are also loosening and contributing to the rapid growth of Chinese arrivals in foreign destinations. Seven per cent of Chinese travellers say that visa restrictions are the main reason they do not travel as much as they would like.[3] This situation is set to change though, with many countries including Australia, Singapore and Korea recognising the importance of the Chinese travel dollar and easing visa restrictions to encourage more Chinese arrivals.

The Leapfrog effect

While China could be seen as a late bloomer when it comes to travel technology, this may actually work to its advantage in the longer term. China may in fact ‘leapfrog’ ahead and build more advanced technology based on lessons learned from other countries.

An Amadeus study earlier this year predicted that the leapfrog effect would have a significant influence on the travel industry in China in the coming years. While bookings on fixed internet have not really taken off in China the way they have in other Asian markets and travel agency bookings remain dominant, it could be that travellers will jump straight to mobile instead. Forty-five per cent of business travellers and 33 per cent of leisure travellers in China already use mobile devices for travel arrangements — higher than many other markets in the Asia region.

As you would expect, younger Chinese are the most enthusiastic users of mobile devices with almost half of younger travellers now using them regularly for both research and bookings. Chinese travellers are seemingly less concerned about security and network reliability than their counterparts in other countries.[4]

Amadeus’ report predicts that these numbers will continue to grow in line with Chinese travellers’ appetite for all things high-tech. With more Chinese people travelling internationally and seeing overseas technology standards for themselves, the demand for China to keep up will be stronger than ever before.

For travel providers such as airlines, travel agencies, tour operators and others, developing a mobile channel will become increasingly important to target the Chinese traveller, including both a mobile web site and an application with booking capability. This investment must continue to ensure that China remains on a par with, or ahead of, international standards in technology.

Everyone is buzzing about growth in China, and it’s common to see experts questioning whether China really will be able to reach the numbers that have been set for 2020, 2030 and beyond. For now, the pace of growth in China’s travel industry is certainly not showing any signs of slowing, and more milestones are being reached every year. However, industry progress in areas of liberalisation and technology needs to continue in order to keep up with new demands from Chinese travellers as they spread their wings.

At Amadeus we are very excited to be playing our part in bringing the world’s best technology to China, working with travel agencies and airlines to help them share in the success of Chinese travel and keep it moving ahead on its fast track.

Amadeus is a leading provider of advanced technology solutions for the global travel industry. Customer groups include travel providers (e.g. airlines, hotels, rail and ferry operators, etc.), travel sellers (travel agencies and websites), and travel buyers (corporations and travel management companies).

Amadeus employs around 11,000 people worldwide, across 195 markets with 73 local Amadeus Commercial Organisations including China.