Travel Booming Across China - Olympic Year Shows Significant Growth in Chinese Tourism Industry
04/01/2008|10:16:00 AM|Chinaaviation

31-Mar-2008: Travelport GDS, one of the world’s leading global distribution system (GDS) providers, has released the findings of its second Asia Pacific Retail Travel Agent Benchmarking Survey which takes a comprehensive look at the day-to-day business and issues affecting travel agents across the region.

The survey, which takes a wide ranging look at travel booking and business patterns across Asia Pacific, clearly reveals that the retail travel market in China is taking serious steps forward in its tourism industry, steps which buck regional trends.  

The Chinese travel population is vast.  In 2006 there were 34 million outbound tourists from mainland China (slightly more than the entire population of Canada) and this figure grew by 14% in the first quarter of 2007.  Domestic tourism is on another scale altogether, with 870 million domestic holidays taken in 2007 which is the equivalent to the whole of Europe going on holiday in one year.

With a travelling population of this scale, it is not surprising that the Travelport GDS survey shows the Chinese travel industry following its own path.  Some key findings show:

Leisure, Leisure, Leisure

Leisure travel is king in China, with leisure travel contributing a much greater revenue to travel agents than business travel.  53.3% of travel booked is leisure (as opposed to a regional average of 47.2%).

Word of mouth is the main driver for leads, with 43.3% of enquiries coming from friends or family and 18.9% driven by newspapers and magazines.

Actual bookings are made “in person” either over the ‘phone (51%) or face-to-face (28.6%), with internet and email falling far behind at 9% and 11.4 % respectively.

Moving en masse

According to the survey, despite the general trend across the region to make money from airline ticketing (59%) over packaged tours (41%), the opposite is the case in China, where the still new travelling public leans towards group travel. 

 62% of agency revenue comes from packaged tours.

The majority of packages booked are for sightseeing and shopping (68.4%).

Cruise, Golf and Spa are distant runners up at 9.8%, 8.1% and 6.5% respectively.

Profit margins on packaged tours are also significant in China, well above the regional average, with 38% of agents reporting profits of 40% or more, as opposed to the regional average of 6% of agents reporting 40%+ profits.

More staff, more training for staff

China has large travel agencies for the region - many employing over 100 travel advisers.  47% of agencies employ 100 staff or more (the next closest is Malaysia – at just 30%).

Most of these staff (38.9%) are employed in front office jobs.

23.9% in marketing, advertising and PR (much higher than the regional average at 13.1%).

9.8% work in technology related fields and 13.4% in GDS related fields

14.1% are employed in a back office function.

China is also investing more in training its staff (16 days on average – as opposed to a regional average of 4-7 days). Unsurprising in a country where travel is still a growth trend, and educated informed travel consultants will be in demand.

Mr George Harb, Commercial Director of Travelport, Asia commented, “our Benchmarking Survey demonstrates just how immense the travel industry is becoming for the Chinese economy.  This is a country that is clearly committed to growing its travel industry as demonstrated by its vast number of agencies, employees and booking patterns plus the opening of its new airport terminal in Beijing – claimed to be the largest building in the world.    It seems the Chinese travel industry is willing to put its money where its mouth is – by investing in training and infrastructure to ensure this remains a growth industry.  With this year being China’s Olympic year, the country’s tourism industry will be more in the spotlight than ever.”