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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

1.4 Million
In-Person Trips, 2017
$3.1 Billion
Visitor Spending, 2017

Market Conditions

GDP Annual Growth Rate

  • Annual GDP rate of growth of 6.5 percent adds incremental annual economy equivalent to the entire German economy.
  • The addition of 600 million middle class people within the next two years will bring the total to double the 2015 level.
  • 81 percent of China’s economic growth is driven by the middle class and upper class.
     

Exchange Rate


  • 1 Chinese Yuan Equals 0.15 U.S. Dollar
  • The 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.

Travel & Planning Methodologies

Airlift

  • 150 Weekly nonstop flights
  • 43,696 weekly nonstop seats
  • Over 40 new routes added in past year
  • New route: Shenzhen-Los Angeles by Air China launched December 2017
  • New route: Xiamen-Qingdao-Los Angeles by Xiamen Airlines launched December 2017
  • Over 200,000 new seat capacity added in 2017 alone

Booking

  • Planning timeframe: one to three months in advance (71 percent of travelers)
  • Booking timeframe: August–September for October vacation period; September–November for travel between December and February; March–May for travel between July and August
  • Over 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.
  • More than 80 tour operators package California.

Market Barriers & Risk Factors


Competitive Landscape

Intensified competition

TOP 2016 MEDIA SPENDERS


Other Market Insights

MARKET

  • In general, the increase rate of Chinese outbound travel is slowing down, but China is still the No.1 international source market with over 120 million outbound travels annually.
  • United States ranks third on Chinese visitor satisfaction Index developed by China National Tourism Administration. The top five countries are: Singapore (83.46), New Zealand (82.77), U.S. (81.97), Japan (81.89), Australia (81.45)
  • Secondary markets and Tier 2 cities are showing more rapid growth than the traditional Tier 1 markets of Shanghai, Beijing and Guangzhou.

PRODUCT EXPERIENCE

  • More frequent but shorter trips are becoming more common; traveling long-haul is no longer a once-in-a-lifetime occasion.
  • FIT travelers from China are up 40 percent, with strong growth in beyond-the-gateway travel.

AUDIENCE

  • 87 percent of China’s outbound travelers are now under 40 years old
  • 67 percent have a Bachelor’s degree and 13 percent have a Master’s degree
  • Half acquire destination information from their mobile phone
  • Increased confidence is leading to a rapid increase in corporate and MICE groups, but a decreased visa approval rate may prevent Chinese MICE groups from travelling to the United States.
  • Chinese destination selection drivers include:
    • Shopping (89 percent)
    • Sightseeing (79 percent)
    • Fine dining (51 percent)
    • Visiting national parks/monuments (40 percent)
    • Visiting art galleries/museums (39 percent)
    • Visiting amusement/ theme parks (34 percent)
    • Visiting cultural/historical sites (22 percent)
  • Sightseeing and dining are becoming more important drivers as Chinese tourists are getting more mature

 


Sources

  • VCA China Research
  • China National Statistics Institute
  • Boston Consulting Group
  • xe.com
  • DIIO
  • CTR
  • iResearch
  • U.S. Department of Commerce
  • Tourism Economics
  • CIC Research, Inc.
  • Carat CCS
  • China National Tourism Administration Annual Report
  • Ctrip Annual Report
  • BUSA China Report

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