oo China Overview

Welcome

Facilitators: Janene Rees

Overview of China Market

1.4 MILLION

INBOUND CHINESE TO

AUSTRALIA

2016-17

Source: Chinese International Travel Monitor

86.7% increase

in Chinese visitors NSW from 2012 -2016

Source: Destination NSW

Travel patterns last 10 years

and

into the future

2005 to

2010 2005 to

2010

3.2 million Chinese visited Japan in 2015, an 83% increase on the previous year.

In 2016 Thailand welcomed 8.3 million

Chinese tourists

http://www.bangkokpost.com/business/tourism.

The Future

Tourism Australia

International Snapshot

Source: Tourism Australia

Aviation Statistics

1.4 million Chinese visitors to Australia

Sept 15 -16 Total expenditure

$9.1 billion.

A New Report AUSTRALIA is

the number one

destination that

Chinese travelers

intend to visit in

the next few

years

(Source: latest Visa PATA Travel Intention Survey)

Ranking Destination

1 Australia 15%

2 Japan 13%

3 Hong Kong 11%

4 South Korea 7%

5 Maldives 6%

6 Thailand 4%

7 Singapore 4%

8 Macau 4%

9 France 3%

10 Taiwan 3%

Chinese traveller wish

list for the year ahead

Source: Chinese International Travel Monitor 21 July 2016

• Flight direct capacity to Australia from China increased 37 per cent in September 2016

• 5 December 2016, Australia and China entered a landmark open aviation market agreement between the two countries, removing all capacity restrictions to further strengthen the bilateral relationship

• Eight airlines operate 25 direct routes between China and Australia.

• Over half of Chinese visitors to Australia fly on Chinese carriers.

Flights between China & Australia

(Source: Tourism Australia Aviation Statistics)

New Flights between China & Australia

Route Airline Aircraft Weekly

frequency

Effective operation

dates Beijing-Sydney Qantas A330-200 7x Jan-17

Guangzhou-Adelaide China Eastern Airlines A330-200 3x Dec-16

Shanghai-Brisbane China Eastern Airlines A330-200 3x Nov-16

Hangzhou-Sydney China Eastern Airlines A330-200 3x Nov-16

Xi'An-Melbourne Hainan Airlines A330-200 2x Jun 17

Changsha-Melbourne Hainan Airlines A330-200 2x Nov-16

Sydney-Kunming China Eastern Airlines A330-200 2x Nov-16

Chengdu-Sydney Air China A330-200 3x Oct-16

Shenzhen-Melbourne Air China A330-200 4x Jun-17

Wuhan-Melbourne China Eastern Airlines A330-200 2x Jun-17

Qingdao-Melbourne Beijing Captital Airlines A330-200 3x Jul-17

Xi'An-Sydney Hainan Airlines A330-200 3x Sep-16

Changsha-Sydney Hainan Airlines A330-200 2x Sep-16

Xiamen-Melbourne Xiamen Airlines B787-8 2x Jun-16

Shenzhen-Brisbane Hainan Airlines A330-300 2x Sep-17

Hong Kong-Gold Coast/Cairns Hong Kong Airlines A330-300 3x Jan-16

(Source: Tourism Australia Aviation Statistics)

3X

Ge

ne

ratio

na

l T

ravel

3x Generational Travel

Top 5 Most Important Factors when Selecting a Holiday Destination

27%

35%

45%

46%

57%

SPECTACULAR COASTAL HISTORY

RICH HISTORY AND HERTIAGE

A SAFE AND SECURE DESTINATION

GOOD FOOD,WINE, LOCAL CUSINE AND PRODUCE

WORLD CLASS BEAUTY AND NATURAL ASSETS

(Source: Tourism Australia)

` The New China

1st 2nd & 3rd Tier Cities

The BIG 4

• First tier cities – Beijing, Shanghai, Guangzhou & Shenzhen • Second tier – Chongqing, Tianjin, Chengdu, Wuhan, Xiamen

• Third tier – Kunming, Xi’an, Tsingdao and Guilin

My Chongqing Story

• 34 m in Chongqing province

• Smart , sophisticated city

• Young affluent want to travel

Direct flights to Sydney with:

• Hainan Airlines

• Sichuan Airlines

2nd tier city

Asian Tourism Growth NEW CHINA/NEW ASIA

VIDEO??????

WHY CHINA? 中国

Because this is the

NEW CHINA

Understanding Market Segments

• ADS Groups

• FIT’s

• MICE

• Visiting Friends and Relatives (VFR)

• Student Travel

• Luxury Travel

Understanding Market Segments

Target Market Breakdown

56%

20%

15%

9%

Holiday

VFR

Education

Business

Source: Understanding the Chinese Market 2016, Tourism Australia

Free Independent Traveller (FIT)

Mode of Travel

• Fly In/Fly Out

• Fly and self drive

• Self Drive

• Day tour

Definitions Free Independent Traveller (FIT)

• An FIT is an individual (or small group of < 10, probably self-drive) traveling and vacationing

with a self-booked itinerary, not part of a tour group - research and book independently

• FIT approx. <10, with a driver guide

• FIFO FIT – fly into Sydney, Melbourne & Gold Coast – research and book independently

• Self-drive, but have guide in lead car – up to 30 people

• FIT’s on day tours

• FIT’s make up to 70% - 75% Chinese inbound visitors to Australia

Chinese FIT Holiday Age

33%

31%

29%

7% 30 to 44 years

15 to 29 years

45 to 59 years

60 years+

Free Independent Traveller (FIT)

75% of Chinese travelers are high yield free independent travelers

The top five regional destinations in Australia visited by the Chinese FIT holiday market to

Australia were : Sydney (54%),

Melbourne (45%),

Tropical North Queensland (27%),

Gold Coast (24%),

Brisbane (14%).

Free Independent Traveller (FIT)

FIT’s travel on Subclass 600 visa

(Australia is trialing a ten year multiple entry visas for Chinese visitors)

Tourism stream – valid for tourist, FIT, study less than 3 months

Teachers accompany students need to apply for business visa

25% ADS Groups

Free Independent Traveller (FIT) Types of FIT traveller • High end luxury traveller

• Honeymoon market

• VFR

• Youth market – backpacker

• 3x Generational travel

(Image source: Destination NSW)

Market

Fit/Target

Audience 2017

Luxury Traveller

• Growing market, exciting part of FIT

• Dynamic

• Driving Change – having new experiences

They want flexible travel

Creative

Products

• Know your market

• Wedding photos three

months prior to the

wedding

• Looking for amazing

backdrops

Definitions Approved Destination Status (ADS) –

Tour Groups The Approved Destination Status (ADS) scheme allows Chinese tourists to travel to Australia in guided

groups. Tourist visas under the ADS scheme are only available to people travelling in tours organised by inbound tour operators (ITO’s) approved by Australian and Chinese government authorities.

Established in 1999, administered by Austrade

Makes up approx. 30% of Chinese inbound visitor market

Group Travel • ADS Groups (Approved Destination Status scheme)

• Leisure Groups

• Shopping Groups

Shopping Groups

Leisure Groups

(Image source: Destination NSW)

Meetings, Incentives, Conferences, Exhibitions (MICE)

MICE • Growth market for Australia

• Australian tourism operators get business from MICE

• Every state in Australia has a business events team in mainland China to market Australia as a conference destination

• Eg 2017 Amway brought 7000 delegates to Australia over 2 months

• VIP component of a few hundred delegates will have different itinerary and requirements

Visiting Friends and Relatives (VFR)

• Act like FITS

• Nature experience

• Self drive tours

• Tend to stay longer

Student Travel

• 46,400 Chinese students currently studying in Australia

• VFR stay 30 nights +

New Emerging Trends • Sporting

• Gold Coast Airport Marathon

• Sydney Running Festival

• Cairns Ironman

• 1.5 million last year

• 5 years 50000 competed in marathons in China

• Marathon running is being dubbed the religion of the middle class

Visitor Expectations • Visitor expectations differ between market segments

• Types of products

• Traditional itineraries

• 8-12 days

• Itinerary determined on market segment

• Self drive one state

FIT Expectations

1. Flexibility

2. Being able to decide on the day what they are doing

3. Minimum 4 star

4. Want a Western experience – funky cafés, restaurants, vineyards

5. High users of Mafangwo & TripAdvisor – sourcing accommodation, experiences travel

6. Book and visit attractions that are award winning

7. Translation in simplified Chinese

FIT Expectations FIT travellers are: • Unique

• 40-50% are return visitors

• More confident and independent

• 80% are booking accommodation and attractions before leaving china

Visitor Expectations • Key Opinion Leaders (KOL), eg.

Running Man

• Seeing beautiful blue water, sandy beaches, they want a part of it

• Already in mind with marketing from Tourism Australia

Self Drive • Exciting growth segment

• Many self drive itineraries in place

• Most popular: Legendary Pacific Coast, Sydney – Gold Coast

The Legendary Pacific Coast Drive

From Sydney to the Gold Coast Has been a success among Chinese self-drive travellers

Itineraries

• ITO’s are selling itineraries to Wholesalers in China

• 4 star accommodation

• Inbound Tour Operators (ITO)

Distribution Network

• Retail Outlets (in Mainland China)

• Wholesalers (mainland China)

• Inbound Tourism Operators (in Australia)

• Online travel agents (mainland China)

• Online Travel agents (Australia)

• Hotel Concierge

Retail travel outlets based in mainland China

Eg Nahu Travel in Guangzhou

Throughout mainland China you will find shopfront travel agents for consumers to directly walk into

Retail definition – consumers can buy direct

Wholesalers – create itinerary and sell packages to retailers

Emerging trend – online travel agents are buying shopfronts to have retail presence

Wholesalers

• Based in mainland China

• Travel wholesalers that promote tours to Australia throughout their own networks in mainland china

• May include shopfronts

Wholesalers

Book direct with tour operator in Australia

Examples:

• CTS – China Travel Services

• CITS – China International Travel Service

• China Comfort Travel

• CYTS – China Youth Travel Service

• U-Tour

• China Women International Service

Inbound Tour Operators (ITO’s)

Roles:

• Land operator organises every aspect of tour group

• From start to finish transfers booking tours and attractions on the ground in Australia

• Sales calls to wholesalers in mainland china

• Very competitive business to be in

• Over 200 inbound tourism operators in Australia

Inbound Tourism

• Becoming important business to

understand in mainland china

• Many online travel platforms which consumers can book tours and attractions in Australia

Online

• More for attractions are on selling products, including regional areas

Hotel Concierge

Packages • Identify operators in your region already working with

China/Asia

• Can you collaborate to create packages

• Make sure you are seen as the primary exporter

• And you control the invoicing – own the package

• Staff training in greetings, cultural understanding

Preparation tips

Packages Preparation tips

• Accommodation • Location • Family apartments • Restaurants – Chinese options • Free Wi-Fi • China friendly • Good relationship

Packages

Preparation tips

• Consistent rate all year

• Rate 12 months ahead 1 April

• Red represents good fortune; however writing someone’s name in red is associated with the end of a friendship

• The number 4 has a similar pronunciation to the word ‘death’ in Cantonese, and is considered unlucky in some parts of China

• The number 8 represents wealth and prosperity

• Warm to hot bottled water not cold

Cultural Do’s & Don’ts

Losing Face Losing face is translated as ‘honour’, ‘reputation’ and ‘respect It can literally make or break a deal

Losing Face – Showing a weakness or criticising someone in public will damage their reputation Giving someone a compliment or giving a gift will earn yourself or someone face.

Losing Face

The distinction between different levels of management

is important

Respecting superiors is well observed

In China, a subordinate would rarely question, interrupt or disagree with

their manager, especially in a public

When dealing with your superiors or elders in China it is always

important to respect their position and ensure that they ‘keep face’

Chinese business circles hierarchy

Business Cards • Business cards are exchanged upon meeting

• Business cards should be printed in English on one side and Simplified Chinese on the other

• Always exchanged with two hands (as a sign of respect)

• Business cards represent the person to whom you are being introduced, so it is polite to study the card

• Business cards should be clean and neat; no dog-eared corners or smudges

Giving Gifts

Red Envelope ”Hong Bao”

This practice is not official protocol but rather a

customary ritual and very common.

Helps build a solid and friendly business

relationship

When you present a gift there is a ritual for it to be

refused a few times out of politeness, you should

respond similarly.

Don’t open a gift after accepting it unless asked to

do so, open it privately.

The recommended colour for wrapping paper is

red.

‘Hello’ – “Ni Hao”

‘Thanks’ - “XieXie”

‘Goodbye’ - “Zai Jian”

‘Welcome’ - “Huan Ying”

Translation