CHINA
The population of China is over 1.3 billion, of which 41.8% are urban and 58.2% are rural. Since 1978, China underwent a rapid economic growth due to their new policy of an open market economy. In 2005, the GDP of the country was 1.79 trillion USD.

In the 1990’s, with the increase of disposable income, more public holidays being institutionalized, domestic travel and outbound travel have been growing at an unprecedented speed. In 2005, 31 million outbound trips were made. China has become the country with the fastest growth in outbound tourism in the world. In 2003, China outnumbered Japan in outbound passengers and became the largest generating country in Asia.
The concentration of the nation’s economic output is spread within the three major urban belts:
l. The economic area around the Bohai Sea, branching out from Beijing and Tianjin to Hebei, Shandong Peninsular and Liaodong Peninsular.
2. The Yangtze River Delta economic zone, which comprises Shanghai, the Jiangsu Province and the Zhejiang Province.
3. The Pearl River Delta Economic zone, mainly composed of the Guangdong Province.
The three economic zones are also, relatively, the developed areas of the tourism industry of China, as well as the major generating areas for outbound travel. In 2004, 70 % of the outbound tourists, organized by the travel agencies came from these three major economic areas. Beijing, Shanghai and Guangzhou are the major cities of these three economic zones.
The bulk of the outbound passengers are the mass tourists, who can come from all over the country.
Outbound passengers who come from the more developed surrounding of the three major generating regions mentioned above, are experienced tourists and are often repeat-outbound travellers. Consumers who are mainly from the three major generating areas itself, are the matured travellers and many of these people take an outbound trip every year as part of their lifestyle. They pay attention to new ADS (Approved Destination Status).
Sightseeing and city travel type of products are sold in big volume to the mass market with less purchasing power. Pre-packaged holidays, incentive travel etc. are also popular. Products catering to passengers with middle to high purchasing power are for example cruise tours, ecological destinations, museum tours, cultural destinations, etc. They are also products which cater to a niche market, and even though this type of market is still relatively small, the outlook is bright as their share is expanding.
Changes are taking place on the market, as new trends are emerging:
<> FIT tours: catering to middle and upper class citizens, particularly to the white collars. These packages offer a combination of “air ticket + hotel”, providing the opportunity for travellers to venture on their own without being restricted to a busy tour programme.
<> “Going in-depth” tours to single destinations: these tours offer travellers with in-depth experience of the visited location. Unlike tours that include visits to several countries in a short span of time, these tours allow the visitors to really absorb what a country has to offer.
<> “Leisure” tours: these are tour packages that offer products such as cruises, where there are no wake-up calls and rushes for sightseeing purposes.
There are also differences in consumer behaviour in the different regions of Beijing, Shanghai and Guangzhou. The consumer behaviour of the residents of these three regions is not the same. In general, people in Beijing are perceptual, people in Shanghai are rational and people in Guangdong are practical. It is suggested that these difference are taken into account when personalizing products for the mid and upper classes. The consumer behavioural patterns in these regions are still changing.
According to the regulations when outbound travel was first introduced in China, Chinese outbound tourists were obliged to join a group of not less than 3, and the tour had to be organized by a registered travel agent. With the liberalization, these restrictions were withdrawn and tourists were permitted to visit Hong Kong, Macao, and the majority of the South East Asian countries on their own. As a result, the proportion of passengers travelling with an organized group was reduced. In 2000, organized passenger tours accounted for 40% of the total outbound figure and it dropped to 20% by 2004. However, travel agencies still remain the main channel of sales for the outbound market.
As the outbound market rises, the number of authorized travel agencies approved by CNTA increases. In 1997, there were 67 authorized travel agencies for outbound travel. It increased to 672 in 2005, where 69 of them were in Beijing, Ill were in Guangdong, 35 in Shanghai, 36 in Jiangsu and 29 in Zhejiang. There were at least 3-4 agencies per province in the rest of the country. The role of wholesalers and retailers is now an established feature of the Chinese market. A number of travel agencies in Beijing, Shanghai and Guangzhou undertake both wholesale as well as retail work and in other provinces, they have become the retailers of these established wholesalers.
The established travel companies undertake both business as well as consumer sales. Some of these products are advertised in the media. Travel companies have established a stable relationship with corporate clients for business travel.
By the end of 2005, there were 111 million people in China who had access to the Internet. Among them, 64.3 million people use broadband. The number of Internet users and broadband users in China ranks as second in the world. Internet users are mainly young people with higher education, searching for information on air travel, and products of the various destinations, as it provides them the freedom to custom make their trip. Therefore, as the Internet is a good source when hooking their vacation, ADS should provide in their website a Chinese page as well in order to entice the potential Chinese customers to visit their countries.
Outbound passengers from China are mainly going to the Asia-Pacific area. 91 % of Chinese outbound tourists are travelling to this area. The direction and volume of the outbound passenger flow are also related to the availability of airlines services to a great extent. At present, besides Hong Kong and Macau, the Chinese mainland is connected with 58 cities around the Asia-Pacific area by regular air services. Therefore, it should be noted that when ADS status is generalized, then Asia-Pacific destinations will face a challenge of passenger flow diversion.
Tourist products of ADS in Asia and Pacific area are at different stages of their life cycles. Before 2002, there were 13 destinations in Asia that rose to 23 by 2003. Thailand, Singapore, Malaysia, Hong Kong and Macao which were the first to become ADS, have entered the period of maturity; while some countries like Korea, Australia, New Zealand, Japan and Vietnam have entered the period of growth. Some ADS that have only appeared on the outbound market of China since 2001 are still in the growth stage. For example, it has not been long since India and Nepal became ADS for China, so they have not yet attracted the attention of the Chinese market.
ADS should have different marketing strategies and tactics as each of their products are at different stages of their life cycles.
Those ADS whose products have matured or even approaching decline, should start a new life cycle by offering new products and incentives. For those ADS whose products are recent or are at a growth stage, it is advisable to do a SWOT analysis to locate their market position accurately. They should also set their targets on the basis of market segmentation for marketing purposes.