Weekly Round-Up (18 July 2016)

Welcome to this week’s China Ready Now Round-Up, highlighting all the exciting news happening in the Chinese outbound tourism space, within Australia and abroad. This week – could retailers be doing more to attract Chinese tourists? Also, more Chinese airlines from more second tier cities are flying direct to Australia and Ctrip strengthens its grip on China’s OTA market. Let’s get into it!

Australian focus

  • Chinese tourists spend record amounts but Australian retailers risk missing the boom: Chinese tourists to Australia spent an average of nearly $2,500 last year on retail therapy per trip, but some experts believe that Australian retailers could be doing more. However, Tourism Australia chief John O’Sullivan noted that expecting every retailer to have a Mandarin speaker behind the counter was “quite simplistic”. Tourism industry insiders have also noted that many hotels do not have the capacity to deal with Chinese guests, particularly during peak periods such as Chinese New Year and Chinese summer holidays. (ABC News)
    • OUR TAKE: While retailers don’t need to have dedicated staff for Chinese tourists, a quick walk-around our CBD retail areas shows that most retailers aren’t even trying to get the “low hanging fruit”, by having a welcome sign in Chinese. If you’re the 1 retailer in 10 that does have a sign, you can bet you’ll get interest!
According to these Chinese tourists, more can be done to make Chinese feel welcome by Australian retailers (Source: ABC News)
According to these Chinese tourists, more can be done to make Chinese feel welcome by Australian retailers (Source: ABC News)

 

  • Chinese consumers set the trend online: Australian retailers need to look to the tech-savvy Chinese consumer for future industry trends, according to a report from PricewaterhouseCoopers. The report shows that the Chinese consumer is becoming increasingly powerful despite the slowdown in the growth of the Chinese economy. The report also noted that the increasing number of middle class Chinese tourists coming to Australia were generating a new source of demand for Australian products.
    • OUR TAKE:  Following on from the above story, if Australian retailers and tourism businesses aren’t already trying to understand China’s online e-commerce environment, then they need to start!
  • Sydney Airport to welcome two services from Hainan Airlines in September and Beijing Capital Airlines connects to Melbourne AirportSydney Airport will welcome a new Hainan Airlines service from Changsha and the return of the popular Xi’an route in September. Meanwhile, a tri-weekly service operated by Beijing Capital Airlines between Shenyang, Qingdao and Melbourne will begin later this year.
    • OUR TAKE: Great to see more second-tier cities linking up with direct air services to Sydney, and Melbourne. Now it’s time to get those Chinese tourists seeing more than just those 2 cities!
  • China’s Nanshan on the hunt for Australian tourism assets: Nanshan Group recently acquired a 20% stake in Virgin Australia, and the AFR had a great article over the weekend into this relatively unknown private company. The conglomerate has invested around $350 million in Australia over the past six months in various tourism businesses and has indicated more investment is on the way, as it bets strong growth in mainland tourist arrivals will continue for many years. (AFR)
  • Chinese tourist growth in FNQ to continue despite tensions: Could tensions over Australia’s comments on the South China Sea dispute affect Chinese tourist arrivals? Unlikely, say the experts – although a potential brief slow-down may occur. (Cairns Post)

International focus

  • Venture Capitalists Bleed As Dominant Ctrip Crashes Travel Start-Ups In ChinaVenture capitalists have invested around US$500 million in the Chinese travel sector during the past two years. However, many of these travel start-ups are now going bankrupt or are inching toward collapse, due to the increasing dominance of Ctrip. The platform is now the absolute monopolistic force in online travel in China. (China Money Network)
  • Chinese holidaymakers heat up Asia-Pacific digital travel sales: A new report has forecast China’s digital travel market to be worth US$121.98 billion in 2017, up from an estimated US$95.29 billion in 2016. New York-based research firm eMarketer notes in the report that “consumers in China are now able to take advantage of the rising disposable income and simplified visa policies” that have progressed over the past few years. The report also noted the importance of online travel agencies, such as Ctrip, Qunar, Tuniu and Alitrip. (South China Morning Post)
  • Beijing frets that Chinese tourists threaten its soft power: More than 70m mainland Chinese citizens travelled overseas last year, making 1.5 trips on average, according to estimates from management consultants McKinsey. Most returned home without causing offence. However, a stream of media reports and viral videos show unruly and uncouth exceptions, prompting Chinese authorities to publish etiquette guides and even introduce a travel blacklist of the most notorious offenders. (Financial Times)
  • Report: Chinese Tourists to Spend Over $255 Billion Abroad by 2025: China’s outbound tourism boom is expected to remain the largest force in the global travel market over the next decade, with Chinese spending reaching US$255.4 billion by 2025. The staggering amount is expected to be almost double that of the United States’ second-place $134.1 billion spent by tourists abroad and larger than that of Germany, the UK, and Russia combined. (Jing Daily)
  • China Continues To Set The Pace Of Global Tourism: Great read for anyone thinking that China’s tourism growth might be slowing down. The small percentage of Chinese with passports, the growing middle class and the “face” gained from international travel all indicate Chinese tourism growth is set to continue for a long time. (Forbes)

Quick Stats

  • Chinese visitor expenditure accounts for a third of total visitor expenditure in Victoria, and is more lucrative than the next six markets combined (link)
  • The two additional Hainan Airlines services to Sydney are expected to bring 33,000 Chinese visitors who will contribute an anticipated $124 million in additional visitor expenditure per year (link)
  • Chinese tourist spending abroad is expected to reach US$255.4 billion by 2025, almost double that of the United States (link)

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