Outbound Chinese tourists to double by 2020 propelling
global growth in travel related sectors
20 January 2014
Hong Kong - Monday, 20 January 2014 - CLSA, Asia’s leading and longest-running independent brokerage and investment group estimates that by 2020 outbound mainland tourist numbers will reach 200 million, double the 100 million who left China in 2013, and tourist spend will triple.
Fuelled by a fast-growing monied middle class eager to experience new destinations, travel is one of the top aspirations for China’s Billion Boomer* generation. The key driver is US$8,000 per-capita GDP as well as more annual leave, visa relaxation, worsening mainland pollution, and an increasingly overloaded domestic tourism infrastructure.
CLSA surveyed 1,000 Chinese travellers across 41 cities to understand outbound travel demand, habits and spending patterns and found 64% are interested in travelling overseas in the next 12 months and 67% intend to increase their travel budget. The survey findings are presented in a 280+ page thematic report Chinese Tourists – Exploring New Frontiers.
Aaron Fischer, Head of Consumer and Gaming research, and the report’s author said: “Explosive projected growth in outbound Greater China travel numbers offers immense opportunity for countries to benefit from Chinese tourists’ desire for new experiences - from sightseeing to food, to hotels, to gaming and shopping. Tourists will become increasingly savvy, independent and demand high quality experiences and service.”
Hong Kong and Macau should continue to be the top international travel destinations but visitor numbers are estimated to decline from 62% to 45% of total outbound Chinese tourists as holidaymakers seek more exotic destinations.
The USA and France received 1.5 and 1.3 million mainland Chinese visitors respectively in 2012, the largest number on record. Survey respondents site both countries as their dream destinations and CLSA expects travel numbers to reach 5.7 million to the US and 3.9 million to France by 2020.
The cost of long-haul travel and limited annual leave will ensure Asian countries continue to benefit the most from mainland tourism growth. Survey respondents who plan to travel stated, in order of preference, Thailand, Taiwan, South Korea and Singapore as their top destinations in the next three years.
While sightseeing, experiencing different cultures and relaxing are the top three reasons to travel; shopping remains an important component of the travel itinerary. Local specialties, skincare/makeup/perfume and apparel are the most purchased items with 80% of tourists buying from local specialty shops and close to 60% at downtown or airport duty free stores.
Luxury goods continue to be highly prized by outbound mainland tourists who make two-thirds of their purchases overseas. Spending by rich Chinese and lavish gift giving resulted in the global luxury-goods sector expanding 41% between 2009 and 2012. Demand from Greater Chinese increased 135% over this period, boosting their share of the market from 19% in 2009 to 31% in 2012. CLSA expects this to increase to 50% by 2020 as middle-class mainland Chinese drive the next wave of the luxury market growth.
Historical evidence in other Asian countries suggests that per-capita GDP growth beyond US$8,000 triggers explosive outbound travel. By 2020, the number of provinces in China with per-capita GDP spending exceeding US$8,000 will increase from 10 in 2012 to 27 and the population of those provinces will increase from 0.5billion to 1.2 billion.
A doubling of Chinese tourist numbers by 2020 will have a significant impact on airlines, gaming, luxury goods, medical tourism, hotels, property and cruise ships, particularly as travel habits evolve. The Internet will be a significant beneficiary as experienced travellers increasingly choose to travel independently; 40% of CLSA survey respondents may book their own flights and hotels and make their own arrangements in the future.
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* In 2002, CLSA coined the term Billion Boomers in its acclaimed report “The Real Pacific Century: Asia’s Billion Boomers” which examined the rise of Asia’s middle class into the 21st Century.