China’s move to an increasingly developed and consumption-driven economy, with a renewed commitment to quality of growth and technology, has been the key ingredient of a burgeoning middle class. A growing middle class naturally means more demand for recreational and corporate air travel – today more than one in every 10 international travellers carries a Chinese passport.
According to the China Outbound Tourism Research Institute, 10.5 million Chinese nationals travelled overseas in the year 2000. In 2017, this figure had rocketed to 145 million trips, a broadening of over 1200% (though the figures include trips to special administrative regions, for example Hong Kong and Macau).
Consider these figures along with the fact that less than 10% of the Chinese population of 1.4 billion owns a passport, and the reality begins to take shape of just how much of a force China is for aviation, tourism and wider economies.
IATA forecasts suggest China will displace the United States as the largest aviation market globally by 2022. Looking to where the country stands in the Asia Pacific right now in terms of international departing seats, China already emerges as the clear leader, with more than 1.8 million seats.
TABLE – China leads international departing seats for Asia Pacific region
The top countries visited by China in 2017 were Hong Kong, Macau, Thailand, Japan, Vietnam, South Korea, Taiwan, Singapore, the United States and Italy. These countries have come to enjoy the vast amount of expenditure by Chinese travellers, who globally spend more than any other nationality during their travels.
Looking to Thailand as an example: China is its largest source market for tourism arrivals. But Chinese travellers naturally have expectations, and staying digitally connected is a major element of this.
So, in 2017 Tourism Authority of Thailand (TAT) launched an official WeChat: ‘Visit Thailand’ application for Chinese tourists, adding the popular Mandarin Chinese social media platform to existing Thailand visitor information services available to mainland visitors.
TAT Governor Yuthasak Supasorn, reconfirming the nuances of the Chinese traveller, said: “The Chinese travel market is cut off and very different. It is vital, as the country’s whole online ecosystem is effectively the largest closed ‘intranet’ in the world. WeChat ‘Visit Thailand’ levels the playing field, giving Chinese tourists a preferred communication tool they trust in their native Mandarin dialect”.
The Southwest Pacific has historically been of less interest to China; now, certain players are seeking to gain from the country’s lucrative tourism
The global information, data and measurement company Nielsen Holdings recently published a survey on outbound Chinese tourism and consumption trends. The survey found that when overseas travel destinations and tourist attractions are considered, for Chinese nationals “cost” has become far less important than the “experience” of travel.
Of the respondents, 56% replied that the beauty and uniqueness of a given destination is their primary consideration, and 47% stated that safety at the destination would affect their travel choice. The ease of visa procedures was a consideration for 45% of responders, and 35% felt that it was important that the locals at the destination made them feel welcome.
Look to the Southwest Pacific Islands and multiple untapped regions for leisure travel experiences emerging for China.
GRAPH: China-Southwest Pacific capacity by airline
The above graph shows that the top four airlines by seat capacity between China and the South Pacific Islands are all Chinese airlines. In total, 7 of the 11 airlines listed are of Chinese origin, meaning that airlines based in their home islands have some catching up to do.
Air Niugini is a major airline for the Southwest Pacific Islands: Papua New Guinea’s (PNG) population is just above 8 million (2016) and the entire Southwest Pacific Island population only totals approximately 10 million (excluding New Zealand). The PNG Government has recently loosened visa regulations for Chinese travellers and the airline plans to begin twice weekly Port Moresby-Shanghai Pudong service from 23-Oct-2018. Air Niugini already operates routes from Port Moresby to Hong Kong and Japan, with Port Moresby (as a result) starting to emerge as a hub connecting East Asia with Queensland in Australia and the Pacific Islands.
While Chinese travellers are sure to acquire new experiences in PNG and other South Pacific Island regions, they will demand new infrastructure and digital connectivity. The question is whether the Southwest Pacific Islands are able to facilitate growth on the terms of the Chinese travellers – because it is likely not to be a matter of ‘if’, but ‘when’, China taps into these new markets.