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China Market Profile

China continues to grow faster than any other country. By the end of the decade, China is
projected to surpass Canada in arrivals, bolstering its already-lofty position as California’s top
overseas market. China is an economic powerhouse as disposable income and consumer
spending continue to soar. The market remains a critical focus for Visit California, which
operates five offices across the region in Shanghai, Beijing, Taipei, Chengdu and Guangzhou.


MAJOR TAKEAWAYS

  • Chinese visitors come for extended periods of time and spend more during their stay
  • Consumer spending has seen 9 percent growth annually
  • Primary audience target is a rapidly growing middle class
  • The under-35 demographic is growing and outspending their elders
  • Increasing consumer confidence – from 104.6 in September to 107.2 in October 2016 –
    fuels travel increases
  • China’s FITs are young, well-educated, affluent and have international travel experience

Travel Profile

1.3 Million
In-Person Trips, 2016
$2.9 Billion
Visitor Spending, 2016

Market Conditions

GDP Annual Growth Rate

  • China GDP growth in the first half of 2016 was 6.7 percent (in line with expectations), and
    leading economists project 6-6.5 percent growth for 2017-18 (in line with government
    forecast). There has been rapid growth in household spending, up to 9.2 percent in 2015,
    with over 4 million millionaires. Rapid urbanization still represents only 54 percent of China’s
    population versus the 80 percent average in developed economies. Sixty-six percent of
    China’s GDP growth is being driven by consumer spending.

Exchange Rate

  • The Yuan Renminbi (RMB) is fundamentally pegged to the U.S. dollar and fluctuation is limited, with no impact reported on travel to the United States. The RMB is now back to 2011 levels.
  • Check current exchange rates on www.xe.com


Travel & Planning Methodologies

Airlift

  • 124 weekly nonstop flights to three gateway cities: San Francisco, San Jose and Los Angeles
  • 36,955 weekly nonstop seats
  • United Airlines launched its second daily flight from Shanghai to San Francisco in June 2016
  • United Airlines launched new flight from Hangzhou to San Francisco (three per week) in June 2016
  • Hainan Airlines launched a semiweekly Changsha to Los Angeles flight in January 2016 using a Boeing 787-8 Dreamliner
  • There are 11 gateway cities to California: Beijing, Shanghai, Guangzhou, Wuhan, Chengdu, Changsha, Hangzhou, Jinan, Nanjing, Qingdao, and Xi’an

Booking

  • Planning time frame: 1-3 months in advance (71% of travelers)
  • Booking time frame: August-September for October vacation period; September-November for travel between December to February; March-May for travel between July to August
  • More than 30 percent of travel to California is booked through traditional tour operators and travel agencies, with the remainder booked through online travel agencies and directly with airlines
  • Over 80 tour operators package California


Market Barriers & Risk Factors


Sources

  • U.S. Department of Commerce
  • Tourism Economics 
  • CIC Research, Inc.
  • International Monetary Fund
  • TradingEconomics.com
  • National Bureau of Statistics of China
  • Nielsen
  • Carat CCS
  • Deutsche Borse Group
  • Alizila Consulting

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