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China Market Profile

China holds its position as California’s top overseas market with the continued expansion of new direct flights and gateway city additions to California. The market’s strength has been diminished somewhat due to recent events, in particular U.S.-China tensions, slowing economic growth and the Wuhan coronavirus outbreak. That said, the market remains a focus for Visit California, which operates six offices across the region in Shanghai, Beijing, Taipei, Chengdu, Wuhan, and Guangzhou. Data updated as of February 2020.


Market Profile

$4.015 Billion
Preliminary Visitor Spending, 2019
$5.025 Billion*
Forecasted Visitor Spending, 2023
*Reflects pre-coronavirus forecast.
37.1%
Market Share (U.S. Spend), 2018

Travel & Planning

Airlift (2019)

  • 149 weekly nonstop flights
  • 45,000 weekly nonstop seats
  • 3 entry points (Los Angeles, San Francisco, San Jose)

Booking

  • Average planning timeframe: 2 to 3 months
  • Average booking timeframe: 1 to 2 months
  • August–September is the booking timeframe for Golden Week travel
  • October–December is the booking timeframe for Chinese New Year trips in January
  • Online platforms remain a primary method of destination selection and booking
  • Among the FIT segment, 80% book online directly through OTAs

Visitor Characteristics

Sought-After Travel Experiences

  • Interactive experiences: Chinese travelers are increasingly seeking behind-the-scenes and hands-on adventures.
  • Local experiences: Fine dining and local cuisine help fulfill the Chinese desire to experience the local lifestyle.
  • Road trips: Nearly 50% of Chinese travelers have taken a self-drive tour in the past year; of that group most are millennials.

How to reach Chinese Travelers

  • Chinese Social Media (WeChat, Weibo, Doyin)
  • Live Stream Digital Platforms 
  • OTAs (Ctrip, Mafengwo)
  • Lifestyle and Fashion Magazines

Market Conditions

According to the National Bureau of Statistics, China’s GDP expanded +6.2% year-over-year in the first three quarters of 2019, totaling $9.87 trillion. The economy has maintained overall stability but faces downward pressure amid slower global economic growth and external uncertainties. The trade war has had a big impact on tourism from group travelers. However, the trade war has not impacted the FIT (Free and Independent Travelers) segment as these younger travelers tend to be less influenced by media coverage.



Competitive Landscape

Europe is the long-haul travel leader in the China market given the shorter distance and lower cost for Chinese travelers. Australia remains a strong competitor given its market position and similar product experience, and short-haul destinations including Japan and Thailand top the list of outbound travel destinations for Chinese travelers. Additionally, southeast Asian countries and Japan can easily attract millennial customers due related cultural backgrounds and compete with similar California product and experiential offerings like beaches, theme parks and outdoor activities. Within the U.S., New York and Hawaii continue to be popular destinations, and with more direct flights launching in recent years to other parts of the U.S., the competition continues to rise.

Opportunities
China’s FIT segment remains the top opportunity for growth in California travel, as they are least affected by recent market conditions. There has also been an uptick in affordable group tours from second-and third-tier urban markets, Wuhan and Central China are major opportunities for California in particular.

Challenges
The trade war has had a big impact on tourism business from middle-aged and senior group travelers and the high rate of rejections for U.S. travel visas is a major obstacle for Chinese travelers. Travelers influenced by the Chinese government’s travel warning and the U.S. trade war are more likely to choose other long-haul destinations for future vacations.


Sources

  • DIIO
  • Bureau of Economic Analysis, NTTO, Dean Runyan, Tourism Economics
  • U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research
  • chyxx.com