17 Oct 2017
Mainland Summer Holiday Sector Still Fails to Deliver Full Package
Although tourism numbers are up in China, with many mainlanders keen on taking a mid-summer break, the industry is still falling short in terms of providing the comprehensive experience required by a new generation of holidaymakers.
According to a recent survey (2017 Q3) by the China Tourism Academy, some 84.9% of all mainlanders intend to travel for leisure purposes at some point in the near future. Among those respondents confirming such an intention, 65.3% maintained that their chosen destination would be one that allowed them to escape from the unusually high temperatures that have plagued the mainland of late.
Significantly, some 76.9% of these would-be tourists are aged 35 or under. In terms of allocated budget, 97% of the respondents indicated a willingness to spend at least RMB1,000 (US$150) on a summer break, while 74% would spend RMB2,000 and 42% RMB3,000.
Overall, this growing penchant for summer breaks among mainlanders has been attributed to two key factors. Firstly, higher levels of disposable income have changed the attitudes of many mainland residents when it comes to spending on leisure activities. As a sign of this, in the first six months of 2017, more than three billion leisure trips were initiated across the country, representing a 10% year-on-year rise. In terms of spend, the total value of these trips was about RMB2.5 trillion, a year-on-year increase of 12%. With travel now firmly established as a popular lifestyle option, choice within the sector has soared. This has seen the emergence of bespoke tours for the bolder and more discerning travellers, while cultural, sporting, medical and educational vacation packages have all attracted high sign-up levels.
Secondly, there is the environmental dimension to consider. According to figures from the China Meteorological Administration, in July this year, 5.8 days were deemed to have had excessively high temperatures. This is more than double the 2.6 days that has been the average over recent years and is, in fact, the highest number recorded since 1961. With such high temperatures expected to be the new norm, it is anticipated that this will drive a continuing mid-summer exodus among those mainlanders with access to sufficient funds.
According to Dr Wu Pu, Head of Research at the Institute of Tourism Policy and Development Strategies, a division of the China Tourism Academy, three consumer groups in particular account for the lion's share of summer holiday bookings:
As recently as 10 years ago, the majority of mainland students spent their summer vacations attending additional classes. Now though, in line with contemporary educational thinking, some 30% of students travel during their college downtime – a significant increase on the 16% who did so 10 years ago. In a further development, according to a survey conducted by Ctrip, China's largest online travel agency, 70% of mainland parents view treating their children to a holiday as the ideal graduation gift, with 55% of parents willing to pay in excess of RMB10,000 for such a celebratory excursion.
Keeping cool over the summer season is a priority for many elderly mainlanders, with high temperatures seen as contributing to cardiovascular and cerebrovascular problems. As a result, a substantial number of those of a pensionable age are now looking to temporarily relocate to more temperate climes at the height of the mainland summer.
3. Residents of 'Furnace' Cities
Over the summer period, a number of mainland conurbations are now subject to excessive temperatures, a development that drives many residents of these so-called furnace cities to seek respite in cooler climes. With 50 million people sweltering in the four heat-afflicted cities set along the banks of the Yangtze River alone, the demand for such chill-out trips is brisk and rising.
Seasonal Tourism: The Economic Benefits
Although starting late compared with many other countries, China is now in the grip of something of a summer holiday boom. While the Chengde Mountain Resort remains a favourite of many and a number of China's traditional summer getaway destinations are still booked-up well in advance, trips to a number of the country's cooler regions are growing in popularity. Among the particular beneficiaries of these changed consumer preferences are a variety of resorts in northeast China, eastern Inner Mongolia, northern Xinjiang, the eastern Qinghai-Tibet Plateau and the northeastern Yunnan-Guizhou Plateau.
Thanks to its extended consumption cycle, high frequency, repeat bookings and rising demand, the mainland's summer tourism market is seen as offering considerable economic rewards to favoured destinations. According to a number of media reports, for instance, Guiyang – the southwest China city billed as the country's Summer Getaway Capital – took RMB38.962 billion in tourism revenue in June and July alone. Over in Changchun, meanwhile, the capital of China's northeast Jilin province, the city's annual summer festival is said to have contributed more than RMB200 billion to the municipal coffers over the past 11 years.
Overall, it is now estimated that more than 300 million mainlanders enjoyed some form of summer vacation this year. Although final figures are not yet available, it is believed that this will represent a total spend in excess of RMB300 billion.
As well as the direct benefits in terms of tourism spend, many of these seasonal holidays also segue into other leisure/business sectors – including healthy living, real estate, conventions and exhibitions and outdoor sports – and deliver a considerable knock-on windfall. While it is difficult to assess the exact impact of tourism on these ancillary sectors, some in the travel industry have estimated it to be as high as RMB1.2-1.5 trillion.
Marketing Getaway Destinations
For many years, the mainland summer tourism market flourished without any form of government stimulus. Of late, however, recognising the potential benefits of attracting a high level of tourism spend, many local governments have begun to actively woo out-of-town visitors through discounts on tickets to local attractions and subsidised travel arrangements.
This year, for instance, Guizhou has offered a 50% discount on admission tickets to its primary tourist sites, as well as 50% discount on the standard toll on its expressway, an incentive that was limited to visitors from 10 target cities/provinces, including Guangxi and Chongqing. In a similar vein, other destinations have offered tourists a variety of discounted services on planes and trains.
A number of cities have also adopted slogans designed to promote their suitability as summer getaway resorts. Among the most memorable are "Xining: China's Summer Capital", "Guiyang: A Cool and Crispy paradise for Summer Getaways", "Liupanshui: At 19 Degrees in the Summer, it's China's Capital of Cool" and "Harbin: Ice city; Summer Capital".
Despite the relative novelty of summer getaways, there are already signs that consumers are no longer satisfied solely with a week's respite in a relatively cool city. Instead, the appetite of many now seems to incline towards more exotic locales, such as mountain resorts or secluded island retreats.
Commenting on these changing preferences at a recent tourism conference in Henan, Sun Jian, President of the China Meteorological Service Association, said: "Many of the traditional getaway cities in the northeast and northwest of China are no longer cool in the summer and, instead, they are plagued with ever-rising temperatures. By contrast, though, many of the mountain resorts have notably lower temperatures and have become increasingly well-equipped when it comes to meeting the requirements of tourists.
"The typical mid-summer temperature in Anhui's Huangshan city, for instance, is now well over 40 degrees. By contrast, the highest temperature recorded on the nearby Huangshan mountain during July was only 27 degrees."
Understandably, mainland travel agencies have been quick to see the summer holiday potential of many of China's mountain resorts. Earlier this year, a consortium of Chongqing travel agencies launched a special promotion aimed at highlighting 63 premium summer getaway routes, all of which are intertwined with a selection of 285 natural beauty spots dotted along Daba Mountain, Wuling Mountain or one of the three high-altitude zones surrounding Dalou Mountain. Temptingly, the mid-summer temperatures in all of these locales seldom exceeds 25 degrees.
As well as these mountainous resorts, many of Asia's breezy island getaway destinations have also seen visitor numbers soar. According to Lvmama.com, a Shanghai-based travel booking website, Phuket, Bangkok, Pattaya, Koh Samui and Chiang Mai were the top five overseas destinations for mainland tourists this summer. In terms of islands, however, the plaudits went to Bali, the Maldives and Okinawa, while Long Beach, Sabah, Nha Trang and Krabi were all rated particularly highly for the range of marine-related activities they had on offer, most notably diving, kayaking and speed boating.
Ancillary Tourism Sectors
At present, many of the tourism industry's traditional add-on sectors – such as health, sporting activities and convention/exhibition tie-ins – remain somewhat underdeveloped on the mainland. Those services that are available tend to be limited and largely unsuitable for the family-oriented, bespoke and high-end requirements of many of the new generation of mainland tourists. In a similar vein, many of the catering, accommodation, medical and insurance resources on offer also fall well short of the expectations of the country's more affluent tourists.
Many of these shortcomings were highlighted and discussed at the aforementioned tourism conference. With the event actually held in Laojieling, a ski resort straddling the boundary between China's north and south climatic zones, delegates were only too aware of the challenges still facing this particular destination. At present, its health and wellness facilities, as well as its real estate offering, are still at the planning stage, while its overall business model is yet to be finalised.
As a sign of the issues the resort still needs to address, one visitor from a neighbouring city confessed he had only heard about the ski resort by chance while exploring other nearby tourist destinations. This was seen as a clear indication that the resort has yet to raise its profile sufficiently for it to be deemed a must-visit attraction.
According to sources within the tourism industry, although many local governments are aware of the importance of ancillary tourism facilities, there are not enough properly skilled individuals working within the sector to deliver the required tie-ins with the health, real estate, catering and insurance industries. In fact, this is just one element in the wider problem of establishing a properly functioning model for the development of the mainland tourism sector, one that also incorporates the growing opportunities offered by the digital industries in terms of peer review facilities and other interactive features.
Cheng Gong, Special Correspondent, Beijing