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Market Insights China

Publication date:
Jan 2011





After bursting onto the international tourism stage in the 1990s, China has been one of the world’s fastest-growing outbound travel markets. This growth has been a little erratic in recent years, but in 2010 the market confirmed that it was well and truly back on a strong growth track.

In 1995, the World Tourism Organization (UNWTO) predicted that China would generate 100 mn trips a year by 2020, making it the fourth largest market in the world. It is well on course to reach that target. Indeed, preliminary estimates suggest that it overtook the UK in 2010 to become the third largest source country in terms of spending on travel abroad – US$48 bn. In terms of outbound trip volume, it may also have moved into third place, with an estimated 54 mn trips, 13% above 2009’s level. This follows 12% growth in 2008 and a modest 4% increase in 2009.

However, all the enthusiasm about China’s potential as an outbound market overlooks the fact that the vast majority of outbound trips (around 70%) are really domestic – for the Chinese Special Administrative Regions (SARs) of Hong Kong and Macau.

Official data on outbound travel – at least in terms of details – has recently been scarce. This makes it difficult to determine Europe’s share of China’s outbound trip volume, especially since official outbound data only counts first point of call. But the official count was 2.1 mn (4.5% of the total) in 2008.

The leading European destinations are Russia (including Russia’s Far East), France, Germany and Italy. Estimates suggest that trips to Europe fell in 2009 but increased again in 2010 (but by less than the overall average for Chinese outbound trips).

The European tourism industry’s focus in recent years has been on the Chinese group leisure market, following the granting of Approved Destination Status (ADS). However, this has delivered disappointing results due to the proliferation of low-priced, low-yield, multi-destination tours. Business, incentive and technical trips, as well as independent leisure trips (FITs), have also been increasing quite rapidly and are, in most respects, much more attractive markets, as well as being easier to organise than in the past.