Travel and Tourism in China and Beyond

Travel and Tourism in China and Beyond

          
Article image

Travel and Tourism in China and Beyond

Taking Off
  • Add To Interests
  • SAVE CONTENT
  • PRINT
  • PDF

  • Not long ago, most Asian tourists were from Japan, South Korea, or Hong Kong—the region’s more affluent markets. But that is rapidly changing. By 2013, China is expected to surpass Japan as the second-largest travel and tourism market in the world. Travel within China, which currently accounts for most Chinese travel and travel spending, is projected to grow by 16 percent per year and to be worth RMB 3.9 trillion by 2020. (See Exhibit 1.) Meanwhile, the country’s outbound travel market will have grown to triple the size of Japan’s.

    exhibit

    Yet China’s travel industry is still in its infancy. Travel remains a highly discretionary expense, secondary to upgrading a home or owning a car. It is also a highly regulated sector and a challenging one for foreign players. Intense competition with little innovation or differentiation characterizes all areas of the industry, from travel agencies and hotels to airlines. Only a handful of companies understand the needs of Chinese travelers, 95 percent of whom claim they are poorly served on both the domestic and the international front.

    This report is an “all aboard” call for growth-minded travel companies. In a survey conducted by The Boston Consulting Group in the third quarter of 2010, we found that the rapidly rising demand for travel in China, together with the lack of offerings for Chinese tourists (both within China and abroad), presents a rare opportunity to gain a first-mover advantage—which can be enormously valuable in a market where consumers are desperate for brands that meet their needs. Equipped with better insight into targeted segments, travel providers could develop differentiated products for affluent travelers, as well as for the burgeoning segment of middle-class tourists emerging in China’s large and smaller cities.

    We interviewed 4,250 Chinese travelers—domestic and outbound, business and leisure—in 15 cities regarding their attitudes toward travel, travel frequency and patterns, travel planning, and decision criteria, as well as their dissatisfaction with current travel-service providers.
  • Add To Interests
  • SAVE CONTENT
  • PRINT
  • PDF