Ten Years Transformed "Penniless Blue-coat" Chinese Into the World's Most Desirable Tourists

4/13/2010 - The wealthiest 5% of China's population - with the resources to travel internationally - is a sizable market at 65 million.  Based in Germany and with a new office in Shanghai, Wolfgang Arlt's company China Outbound Tourism Research Institute helps direct Chinese tourists to destinations all over the world. The United States, since it received China's "Approved Destination Status" a few years ago is one of the countries trying to get the attention of COTRI's - and China's - tourists.  This year's China Outbound Travel and Tourism Market trade convention is coming up at the end of April. COTRI will be there, and so will the United States, though presenting a different unified front this year.  Rather than marketing each state individually, the whole USA is the message.




JANET CARMOSKY: This is Janet Carmosky of The China Business Network, and we’re talking today with Prof. Dr. Wolfgang Arlt, the preeminent researcher and practitioner of the Chinese outbound tourism market and services to develop it. It’s wonderful of you to be here with us today, Wolfgang.

WOLFGANG ARLT: Thank you very much Janet, it’s a pleasure for me to be on. I’m always happy to talk to you.

CARMOSKY: It’s mutual! So your gig for a number of years now is COTRI, the China Outbound Tourism Research Institute, based up in the far north of Germany, but of course doing work all over the world. Tell us what COTRI is doing.

ARLT: Yes, thank you very much, Janet. This is something I’ve been doing since 2004, but actually I’ve been working on China and China outbound tourism already, starting in the 1980s. We are based in the north of Germany, but since the beginning of this year we also have an office in Shanghai, to be closer to the markets.

So as the name is already suggesting, we are specializing in looking at tourism out of China – so Chinese people going to other places. And we try to provide information and research and analysis to the industry, but also of course, we are giving practical help and advice. We have a number of training programs, workshop programs, and we are working, as you said, with different countries, from Brazil, to Canada, to European countries, to Asian countries. What we have recently developed now is that we have something which we call “Win Chinese Tourist One-Stop Solution for the Chinese Market.” Where COTRI’s job is to tell people how to make Chinese tourists happy, so to train the people who are providing services to make sure that the products are adapted to the needs and wishes and ideas of the Chinese customers, and also we offer something called China Outbound Tourism Quality Label, where we help with quality assurance of that.

So this is to have a good product from a Chinese point of view, but the other thing, of course, is you also need to tell people about it. We have partnered with a company which is called Dragon Trail, based in Beijing. They are the leading experts in social media marketing, which is the best way to reach Chinese customers traveling overseas.

Because we talk about the Chinese, of course, we have to be clear that we’re talking about maybe the top 5% of China’s population who can afford this traveling to the United States or to Europe or such faraway places. But 5% of China is already a cool 65 million people. Last year we had almost 50 million people leaving China, so this is the scope of what we’re talking about. And Dragon Trail is –

CARMOSKY: So the markets of 50 some million leaving China? Where are they going? And how does Dragon Trail and COTRI reach these travelers?

ARLT: Of course the majority of them are staying in Asia, staying in the neighboring countries. A) because of money – it’s cheaper to go there, of course, and more convenient, but B) also because the neighboring countries there are normally big Chinese populations, of Chinese living there, easier to get around, not too much culture differences, but of course the dream destinations where you can brag about when you go home is, of course, North America and Europe, mainly. Some smaller destinations also gaining popularity like South Africa, Australia, which is not too far away from the south of China are important. So for Chinese people it is important to know which is the place to be, the place to go, because it is not so much about leisure and personal enjoyment and recreation, it’s much more about gaining status, and gaining bragging power. And for that, of course, you have to go to the “in” places.

CARMOSKY: Let’s talk about the product now, because we’ve talked about getting the word out. COTRI does work for destinations as diverse as Canada, Jordan, Mexico, maybe one day the United States. Tell us.

ARLT: We’re working on this one. We have a number of contracts. As you know, America only got what is called the ADS (Approved Destination Status) only recently. The United States is, in this respect, a little bit behind other destinations, but they are catching up fast now. Therefore, there’s a lot of activities going on. At the end of this month there will be the major exhibition, the China Outbound Travel & Tourism Market – COTTM – in Beijing. There’s a number of Chinese exhibitors now, and there are other activities.

CARMOSKY: That’s April 26th?

ARLT: No, April 28-April 30, so the last three days of this month.

CARMOSKY: The United States has come to learn in the international tourism industry it doesn’t make a particularly strong showing, especially compared to places like Egypt, the Caribbean destinations. There are historical reasons for that, one being the US is such a magnet, the other is people go there anyway. Also it’s been sort of a state by state marketing outreach. Is anything changing with that? If I were to go to COTTM this year would I see something different from the USA?

ARLT: Yes, you will! What I learned only last month is the US administration has come around finally, and fortunately, I would think, that there is something started now, some organization funded now which will actually sell the brand USA as a tourism destination. Whereas before, it had always been that each individual state was saying: Hey come to New York; Hey come to Texas; Hey come to California. But the brand USA was not promoted as one. This of course, well, yeah everybody knows about the USA, but if you look at the numbers, the United States has only less than proportional profits from the growth of the worldwide tourism. We are now having close to a billion people traveling each year internationally. Of course America is still important, but compared to other markets it has lost out on some of this growth. Therefore it’s a good idea that now the USA are starting to promote themselves as one brand.

What we can see now is the Chinese tourist market, which started like 10 or 12 years ago, is now growing as is also now becoming more sophisticated and more diversified. You find now people who are interested not only in the big highlights in New York City and California, but also in some other parts of the United States. You can sell this successfully. People in China now have been doing their first three or four trips over there. Sometimes it’s better to go a little bit more slow and also to go to some places that are not the most famous places.

CARMOSKY: So actually stay somewhere long enough to actually do something besides take a photo and buy a bag.

ARLT: Yes, you will still have this, these people who go out of China for the first time in their lives, and for whom it is very expensive. They have been saving money. They want to see as much as possible in as short as time as possible. But this is the same thing where we go to China for the first time, 80% of the people go through the whole country from Beijing to Shenzhen in one go – in 12 days or so – taking all the highlights. This is the normal thing to do.

What is happening now is that we have Chinese tourists who have more experience, more knowledge, who may know the English language, and so know more about western culture. They can really appreciate what they’re seeing. This is where you can really earn the money, because the mass market people rushing around are looking for the cheapest offer, so you won’t earn much money from them. But from these more sophisticated visitors, this is actually where you have a chance if you’re not one of the top 3 destinations and you have a chance to earn good money. These people very often go for the best, so they go for the best hotels, services.

CARMOSKY: The finest. Yes. I want to wrap up and tell everybody in the audience: Wolfgang is a Charter Member of The China Business Network, which means not only can you find his profile in the Directory of The China Business Network but he has a little badge which designates him as somebody who’s really got some serious China chops.

Where can people reach you, aside from going to your profile on The China Business Network and hitting the “Contact Me” button if somebody wants to buy your book, or to learn more about COTRI?

ARLT: It’s easiest to go to our website www.china-outbound.com. This is where you find all the information. If you want to get the latest news, we have a website we do together with Dragon Trail, which is called www.chinatraveltrends.com. There’s also a China Travel Trends community, which people who are interested can join and also participate in the discussion. And of course I’m very happy that this topic now gets more and more interest.

When I started to talk to people about the Chinese people are coming as outbound tourists like ten years ago, people would say “wow you’re crazy. Chinese people are poor and have these blue jackets.” Within a decade, this has changed a lot. People now understand the Chinese market is important.

CARMOSKY: Best of luck to COTRI. For everybody who’s listening and wants to find out more about Wolfgang Arlt his profile is on The China Business Network Directory, as well as his own website. So thank you very much, Prof. Dr. Wolfgang Arlt!

ARLT: Thank you very much, nice talking to you. Thank you, bye!




Prof. Dr. Wolfgang Arlt, with more than 30 years of experience in China, is the Director at the China Outbound Tourism Research Institute (CORTI), and organization offering information, analysis, publications, consulting, and advice for individuals and companies interest in Chinese tourism.  Read more...

More Resources from Dr. Arlt
China Tourism Academy: Annual Report China Outbound Tourism Development 2009/2010 - English Edition
China's Outbound Tourism (Contemporary Geographies of Leisure, Tourism and Mobility)
www.china-outbound.com
www.chinatraveltrends.com