Skift Take

Chinese travelers are increasingly exploring rural areas within the country as domestic tourism soars. International destinations should pay attention to what China's travelers are doing at home to better understand how to appeal to them from afar.

Chinese outbound tourists are dramatically changing the nature of the international travel market. Now, China is the world’s most important tourism source market. Yet, in many ways, this distracts from an even more dramatic Chinese tourism transformation that’s happening at home.

According to Ctrip and the Chinese Tourism Academy (CTA), Chinese tourists spent a total of $115.29 billion on outbound travel in 2017. On the other hand, China’s domestic tourism spending was a whopping $720 billion, representing growth of 15.9 percent compared to the year before. Perhaps one of the most dramatic transformations has been where domestic Chinese tourists are going and the growth of rural tourism.

The CTA estimates that in 2017, Chinese tourists spent around $200 billion on rural tourism. Rural tourism is expanding quickly this year, with Chinese OTA Lvmama reporting that bookings for rural tourism packages were up by 50 percent in July and August of this year compared to last year.

It’s important to note that numbers for Chinese tourism can vary wildly. For example, the United Nations World Tourism Organization (UNWTO) puts 2017’s outbound Chinese tourism spending at $258 billion. Determining the exact figures for outbound spending is challenging, but it’s safe to say that China’s domestic tourism spending far outstrips that of its outbound tourism spending.

Domestically, most of China’s tourists and their spending are going to the country’s biggest and most developed cities, like Shanghai, Beijing, Guangzhou, and Shenzhen. Still, the growth in rural tourism also illustrates important shifts in changing attitudes toward leisure travel. Natural environments and other non-urban travel experiences are more important than ever. Destinations in Yunnan and Sichuan in Southwest China or the mountains of Northeast China have always been crucial domestic travel staples, but have nonetheless seen dramatic growth in visitation and spending in recent years.

This is something that many North American and European destinations have been able to tap into. For example, Jake Steinman, Founder and CEO of North American Journeys, stated in an interview with Jing Travel that the U.S. destinations that are doing best with the most lucrative sector of Chinese outbound tourism, so-called free independent travelers (FITs), are not only big American metropolises and cultural centers.

“Among states, aside from Los Angeles, San Francisco, and Las Vegas, I would say Oregon, Utah, and Wyoming are the states doing well with FITs after having ‘sculpted’ their products in a way that the Chinese are finding them useful and educating their industries,” Steinman noted.

While these kinds of domestic, macro trends may not seem to have a direct impact on North American or Europeans stakeholders, they nonetheless provide important indications of where the Chinese travel market is going. Nowhere is this more visible in how the growing popularity of historical, “red tourism” is impacting the where Chinese outbound tourists travel.

This is especially important given how volatile the outbound Chinese travel market can be.

Currency fluctuations and political disputes can lead to dramatic tumbles (and spikes) in visitor numbers and spending. However, the continued growth in travel at home in China can inform stakeholders abroad of what kind of travel experiences will appeal to Chinese tourists once the economic or political situation stabilizes.

Moreover, understanding what matters most to potential outbound Chinese tourists is also significant because of how robust China’s domestic offerings are becoming. For example, China’s main tropical getaway, Hainan Province, is attempting to transform itself into a high-end international destination. Not only are impressive hotel and resort attractions being constructed on the island, but the province is also developing competitive duty-free shopping offerings. With high-quality retail and hospitality experiences available at home, international destinations need to understand how to set themselves apart from major domestic destinations.

This story originally appeared on Jing Travel, a Skift content partner.

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Tags: china, tourism

Photo Credit: A Buddhist monastery in Sichuan, China. Domestic tourism is growing in destinations including Sichuan. Valerian Guillot / Flickr