Not long ago, taking vacations away from home was only eligible for a small group of wealthy people in China. But now, thanks to the country’s quick economic growth as well as the stable rise of average incomes, this is no longer the case. China’s tourism industry has witnessed unprecedented development in recent years. The country’s tourism market is worth RMB 4.69 trillion ($705 billion) in 2016, a 13.6% rise from RMB 4.13 billion in 2015 (in Chinese).

While inbound travel still accounts for a major part of the market, the outbound tourism industry has experienced exponential growth. And the momentum continues. China is now the number one source market in the world since 2012, following a trend of double-digit growth in tourism expenditure every year since 2004. Mastercard’s Future of Outbound Travel report indicated an average growth of 8.5% each year between 2016 and 2021.

Market share of inbound (59%) and outbound (41%) tourism during October 1st holiday. (Image credit: Ctrip)

The quick boom of China’s tourism industry in market size is surely impressive. But when observing from another angle, the impact of this trend on China’s tech world is hardly less significant, not only on online tourism platforms but also on China’s globalizing tech startups in general.

Domestic internet giants following the footsteps of Chinese tourists

For Chinese internet giants who are facing a saturating market and tightening competition from local peers, globalization is becoming their top priority to maintain sustainable growth in the long run. China’s tech-savvy and globe-trotting consumers are serving as their best entry point to overseas markets.

Alipay and WeChat Pay—both of which are targeting primarily at Chinese outbound tourists when going global—are great examples of this. With a clear customer profile, the partners they are looking at skew toward those more commonly visited by tourists, such as airports duty-free shops, scenic spots, restaurants, and convenience stores.

Alipay is now being accepted in more than 120k offline stores in 26 countries across Southeast Asia, Europe, North America, and East Asia, while WeChat Pay now available in 15 countries and regions for payments in 12 currencies. Reasonably, the markets they are tapping now and the resources they are putting in each market are highly in line with the popular outbound travel destinations.

Likewise, Chinese outbound tourists are also the ready users for ofo and Mobike—two top Chinese bike rental companies entangled in an escalating globalization war—simply because it’s easier to gain access to a group who is more familiar with bike rental service. The same logic also works for other Chinese companies looking for the foreign market, such as O2O and power bank rental firms.

Changes and recent trends of China’s outbound tourism

Given that China’s tourists have become a crucial link that drives the internalization plan of Chinese tech internet giants, habits and preference changes are of increasing value for China’s tech world. China Tourism Academy and Chinese online travel agent Ctrip have jointly released a report on the tourism for the October 1 holiday, shedding light on the trends and changes in this sector.

The first half of 2017 registered 62.03 million outbound visits, up 5% from last year, the report noted. Following a decade of rapid expansion, China’s outbound tourism market is entering a new normal of steady, slow-to-moderate growth. The middle class that makes up the mainstay of outbound tourism is shifting from shopping spree to in-depth travel in its overseas consumption pattern.

Market share of escorted tours (44%), self-guided tours (11%) and custom tours (45%) in outbound tourism market. (Image credit: Ctrip)

With the arrival of the era of rational consumption, shopping budget that used to claim half of the spending made by outbound travelers will further go down, curbing the increase in China outbound travel spending. This type of travel has entered a stage of “consumption upgrading.” When it comes to spending on accommodation, catering, shopping, and recreation, outbound travelers prefer self-guided tours to get the most out of each destination.

Even when traveling abroad, customers bring their own consumption habits. While O2O services, mobile payment, smart transportation solutions have become so ubiquitous in China, they have yet to become mainstream in some overseas markets. This opens plenty of opportunities for Chinese companies that want to fill in the gap.

China’s super app WeChat is also benefiting from the trend in its somewhat bumpy globalization path. Most Chinese outbound travelers would choose escorted tours due to the language barrier and unfamiliarity with the destination. Ctrip’s report shows during this year’s national holiday half of outbound travelers will choose escorted tours and another half self-guided tours. Thanks to the tour guide services offered by Ctrip and other large travel agencies via WeChat app, outbound travelers are able to consult about destinations, translation, recreation and other information via WeChat groups.

They can also find fellow travelers in the chat groups, or book one-day tour and vehicle use. If Chinese tourists encounter any difficulty when traveling abroad, they may ask for help through Ctrip’s global SOS system, thus substantially improving their sense of security during self-guided tours.

Shifts in popular tourism destinations

The growth in outbound travel from China benefited many destinations in Asia and the Pacific, most notably Thailand, Japan, Singapore, South Korea, Malaysia, and the US.

The report points out that major destinations for outbound tourism have witnessed sharp changes in their popularity this year. Compared with last year’s most popular destinations—Thailand, South Korea and Japan, this year Thailand, Japan, and Singapore will attract the most Chinese tourists, with South Korea to host much fewer Chinese travelers and disappear from the top 20 list due to the political disputes between the two countries. Australia surpassed the Maldives to take 10th place thanks to its loosened visa policies. Philippines, Malaysia, Vietnam, and other Southeast Asian countries are receiving more travelers from China.

Europe suffered the sharpest decline in its attraction to Chinese tourists in the first half of 2016, but regained its lead in inbound tourism growth later in the year. According to the report, in the first half of 2017 trips to Europe made by Chinese people increased 65% year on year. The total number of trips to the continent for the whole year is estimated to reach 5.5 million, closely behind Southeast Asia and East Asia.

Popular destinations for Chinese outbound tourists during October 1st holiday: Southeast Asia & South Asia (46%), Hong Kong & Macau & Taiwan (13%), Middle East & Africa (6%), Japan & South Korea (12%), Australia (5%), Europe (11%), America (7%) (Image credit: Ctrip)

October 1st is the longest holiday in China, during which the country will see a spike in tourists. The data from this period reflects the most typical traveling model of Chinese people. The traveling demand for this year is further boosted by the fact that National Holiday will coincide with the Mid-Autumn Festival, which means one can take a 9-day vacation with 1 days’ leave—a big driver for long-distance trips.

The report also pointed out that stronger RMB against USD and other favorable factors have encouraged much more Chinese to book trips to long-distance destinations, such as the US, France & Italy & Switzerland, Spain, Austria, Australia, Middle East & Africa (Turkey, Egypt, Morocco, and Kenya).

Compared with outbound travel, domestic travel has been greater in size and growth rate for the first several months of this year. China National Tourism Administration’s data shows domestic travel grows at 13.5% a year, twice as fast as the outbound variety and 40 times as bigger in size too. Chinese people take more than 3 domestic trips a year on average. In the first half of this year, the Chinese made 2.5 billion domestic trips, continuing to be the biggest number in the world.

According to the report, mainland China travelers are increasingly drawn to destinations with more accessibility, higher security and stability, and greater hospitality.

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via or Twitter.

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