Entrepreneurship und Tourismus

1. Introduction to tourism development in China

This chapter aims to introduce the tourism development of China and its consequences for the global tourism and hospitality industry with a particular focus on Alpine destinations. Firstly, the development of Chinese tourism will be introduced, a phenomenon characterised by its recentness and fast advancement. Especially the planned, staged and gradual opening of china to the world will be considered, as well as its consequences for Chinese outbound tourism. As China currently represents the world‘s largest single source market, the role of China’s outbound tourism is of considerable importance, both for the country itself as well as for its receiving destinations.

The second section is going to approach tourism development in China from a socio-cultural as well as an environmental perspective, in order to showcase that the importance of Chinese culture and people linked to it is not limited to the geographical territory of the Peoples Republic of China. The technical term refers to this as the ‘Chinese Diaspora’, considering the immigration of Chinese people to countries of the Pacific Rim and beyond, as well as Asia and the Americas. This will be illustrated using a case study of Hong Kong as a major destination for Chinese outbound tourism and its effect on the people of Hong Kong as well as the Host-Guest relationship. Additionally, the city of Chiang Mai, Thailand, is introduced, as it was facing a strong increase in Chinese incoming tourism to highlight the importance of tourism politics, social media marketing and destination management.

Thirdly, other and more distant destinations for Chinese outbound travellers such as the European Alps with Austria and Switzerland are considered. This perspective will show how European destinations are dealing with this new source market, often seen as a relief from and addition to saturated European markets.

Finally, the chapter concludes with a summary of the recent developments and provides an outlook for the future in terms of what can be expected from Chinese tourism, what future tourist will look like and what they mean for Alpine destinations.

2. S. 220Tourism development and “open door” policy

China, Tourism and the World

Although tourism in China is currently a widely discussed topic, not as much attention has been paid to the history of tourism development in the country. From the foundation of the People’s Republic of China (PRC) in 1949, it is possible to distinguish five periods of national policy making related tourism development (Airey & Chong, 2010).

Under the leadership of Mao Zedong from 1949 to 1978, tourism in China was used as a political and diplomatic tool to showcase the country’s new leadership and enhance political ties. The second period then spans from 1978 to 1985 and is known as China’s staged opening to the world, the so-called ‘open-door policy’. On the basis of this new philosophy, travelling and tourism was now considered acceptable as opposed to an indulgence, as it offered a contribution to the modernization of the country and the society. As such, under the leadership of Deng Xiaoping’s pragmatic and evolutionary socialism, tourism shifted from a political to an economic activity; not without contradictions between socialism, modernization, globalization and preservation of the remaining traditional culture (Sofield & Li, 1998). With period tree (1986–91), tourism started to be considered as a serious economic industry, although the negative impacts of the Tiananmen Square conflict in 1989 were felt particularly by the international tourist community (Gartner & Shen, 1992). In period four (1992–97) the tourism sector established itself firmly as a financially important industry for China. In the fifth period (1998 to present), tourism in the People’s Republic of China is decisively recognized as one of the most important industries on a national and regional level (Zhang et al., 2005). This has resulted in high investment in tourism facilities, as well as in the improvement of service quality. In 2011, a twelfth “Five-year Plan” was launched by the Chinese government to turn “tourism into a strategic pillar industry of the Chinese economy and modern service industry with improved public satisfaction” (UNWTO, 2011), and in 2013 a new tourism policy has been developed for the years 2013–2020 (General Office of the State Council, 2013).

New policies mainly focus on regulations of paid annual leave for Chinese workers in order to increase their leisure time; increasing availability and accessibility of key tourist destinations; improving tourism infrastructure; creating new tourism sub-sectors such as sport, medical and ‘red’ or socialist tourism; and developing and improving tourism service (General Office of the State Council, 2013).

For decades, the economy of China has been steadily improving, and as a result so have the income and living standards for most Chinese (Arlt, 2006). With increased wealth and disposable income for consumption and international travel, Chinese outbound tourism took off during the 1990s (China Outbound Tourism Research Institute, 2015). Since then, outbound tourism from Mainland China and the special administrative regions of Hong Kong and Macau has constantly grown, so much so that in 2012, China overtook Germany and the US as the largest global outbound tourism source market (UNWTO, 2014). By 2014, 83.2 million Chinese travelled from the mainland, spending $128.6 billion USD (UNWTO, 2014).

S. 221The remarkable growth of tourism in China during the last 20 years, however, has raised issues for the development of future tourism policies. Among these are concerns of distribution of the benefits of the tourism industry among the population; availability of public services for domestic tourists; planning and marketing for new sub-sectors of tourism; the imbalance of regional development in the country; and the management of red tourism (Xiao, 2010). The Chinese Communist Party (CCP), which has been ruling the PRC since its foundation, will have to face these challenges by appealing to past traditions, justifying the one-party state, as well as taking into account the increasing level of consumerism in Chinese society.

Figure 1 shows the development of Chinese outbound tourism numbers over the last 15 years, which are expected to increase further in the coming years (PATA, 2013). China can thus be considered to remain a dominating market for Hong Kong and Macao as well as other Asian and international destinations.

Figure 1: China Outbound Tourism 2000-2015 [Source: PATA, 2015, based on CTA and COTRI http://www.pataconversations.com/wolfgang-arlt-cotri/]

3. Socio-cultural and environmental perspectives on tourism development in China

3.1. Chinas Diaspora: Ties and Tourists between the Mainland and the World

Throughout China’s turbulent history, its people have often been displaced. However, cultural ties among ethnic Chinese have remained strong and many are looking for a S. 222connection with their ancestral homeland (Huang, 2001). In a touristic context, Diaspora refers to populations and cultures scattered across geographical space and time visiting their homeland in search for ethnic or family reconnections (Coles & Timothy, 2002; Kwek, Wang, & Weaver, 2014). Currently, China is connected to “Overseas Chinese” in two ways from a tourism standpoint, (1) through Overseas Chinese travel to China, and (2) through their investment in tourism activities in China (Lew & Wong, 2002).

45 million people of Chinese heritage are living in different places of the world, commonly known as Overseas Chinese (Li, 2012). For decades, China has benefitted from its relationship with them (Liu, 2011; Smart & Hsu, 2004), and has even developed an Overseas Affairs Office, which oversees, sponsors and organizes visits to the country. Kwek et al. (2014) mention several successful related events, such as “Overseas Chinese come home and watch the World Expo”, and roots-seeking summer camps attracting ethnical Chinese from over 50 countries to learn the Chinese language. They also argue that Diaspora tourism has been used as a tool for the Chinese government to enhance China’s “soft power”, a concept which is in need of further attention from researchers and practitioners.

Regarding investments coming from overseas Chinese, most of this investment in China’s accommodation and transportation sectors since 1979 has come from Hong Kong, Taiwanese and Macau Chinese, followed by Western investors and overseas ethnic Chinese (Hall & Page, 2012). This is assumed to be related to the Chinese belief that money sent back increases an individual’s prestige, as well as providing a feeling of paying respect to living and deceased relatives and ancestors (Lew & Wong, 2002).

Although Diaspora tourism is hardly promoted in developing countries (Scheyvens, 2007), the so called “Overseas Chinese” market constitutes a huge potential not only for the mainland of China but for other markets as well. In addition, the socio-cultural footprint of Chinese with its implications for product development and marketing will be relevant for many other Asian outbound markets, as illustrated by Figure 2.

S. 223Figure 2: The Chinese Diaspora [Source: http://www.transpacificproject.com/wp-content/uploads/2011/06/chinese-diasporaMap.jpg]

3.2. China Outbound tourism and host-guest relationship: The Case of Hong Kong

Mainland China has been the largest inbound tourism market for Hong Kong since 2003, accounting for 73 % of the total visitors in 2013 with 40.7 million arrivals (Hong Kong Tourism Commission, 2014), while traditional inbound markets such as Japan and the USA have been declining.

According to the Hong Kong Tourism Commission (2014), 58.1 % of mainland Chinese tourists are same day visitors, while 67.4 % come to Hong Kong through the recent “Individual Visit Scheme” (IVS). Approximately 80 % of mainland travellers, a traditional group travel market, visit Hong Kong as independent, non-organized travellers. Commonly, shopping is the main motive for Mainland Chinese tourists to visit Hong Kong (Huang & Hsu, 2005; Lam & Hsu, 2004; Tsang et al., 2011).

The ever growing “Chinese tourists’ wave”, however, has had a noticeable impact on several layers of Hong Kong society in terms of quality of life (Wei, 2008). The last months of the year 2014 have seen tensions between Hong Kong and mainland China rising, culminating in the civil disobedience movement “Occupy Central” and the so-called “Umbrella Movement”. Born to spur an agreement between the Hong Kong government and Beijing to implement Universal Suffrage for the Legislative Council elections in 2020, the movement has eventually seen thousands of residents blocking the roads and paralysing Hong Kong for months throughout the end of 2014.

Although frequently abstaining from comments or disapproving of the movement, the turbulent circumstances have not prevented mainland visitors to come to Hong Kong. S. 224On the contrary, according to Hong Kong newspapers, numbers increased by 6.8 % over the Golden Week starting in October. However, the increasing political tension among Hong Kong and the Mainland, as well as instances of public indignation of Hong Kong residents against Mainland tourists, is currently regarded as an unresolved issue and poses challenges for practitioners and academics alike.

3.3. “Lost in Thailand”: Unlocked Chinese travel demand hit local supply.

Chiang Mai has historically been a relatively unpopular destination among Chinese tourists (Sangkakorn, 2013). But like other destinations, it has also felt the impact of the increase in Chinese outbound tourism. Thailand, a fairly saturated destination for Western travellers, has become a destination for Chinese movie tourists, following the success of the movies “Go LALA Go!” and “Lost in Thailand” (Phomsiri, 2015).

Particularly the movie “Lost in Thailand”, a low budget-comedy with Chiang Mai as its filming location, has had a strong impact on the local Thai tourist industry, attracting large number of Chinese tourists. The movie, released in 2012, was the first domestic Chinese movie production to gross more than RMB 1 billion. While the number of Chinese travelers to Thailand over the Chinese New Year Golden Week tripled the year after the movie, the number of tourists asking to travel for Chiang Mai multiplied in numbers, coming as a surprise to the local tourism industry. Because of its untypical approaches to marketing and a strong use of the Chinese social media, the travelling public started talking about and became interested in traveling to this new destination, storming travel agents and online booking channels. Backed by the eased visa policy of Thailand for Mainland Chinese, the Chinese supply-side was able to react flexibly to this sudden jump in demand by bundling flights and local accommodation capacity in combination with guided tours to all of the movie related points of interest (Phomsiri, 2015).

In the receiving destination, the arrival of tens of thousands of tourists from an unknown market caused frictions, based on cultural differences, a different consumer behaviour and demand structure as well as the simple number of tourists arriving at the relatively small destination causing congestion and crowding. The local and regional tourism structures and especially the destination management have been not only unprepared for but overwhelmed by the success of the movie and the related skyrocketing number of visitors to Northern Thailand, resulting in a fairly slow adaption to the new situation (Sangkakorn, 2013).

4. Chinese travellers and the Alps: Unlocking a potentially huge Market?

While other source markets such as Europe, Russia and North America are stagnating, it is not surprising that China’s outbound tourism market attracts increasing attention. China remains a very important market for intraregional travel within Asia, and interregionally, Europe has grown in popularity for Chinese long-haul trips, based on culture- S. 225and shopping-based products. While destinations such as the UK, France, and Italy were early hot-spots for Chinese tourists, the Alpine destinations of Switzerland and Austria are only recently attracting more Chinese, with a significant increase in their market share of Chinese outbound tourism.

It took almost a decade of concentrating specifically on the Chinese market to see a rise in overnight stays in Austria and Switzerland. With a memorandum of understanding between European countries and the National Tourism Administration of the People’s Republic of China, Switzerland and Austria received approved destination status (ADS) in March 2004, and in the following months, Switzerland Tourism and the Swiss Hotel Association “Hotelleriesuisse” launched their initiative “Hello China” (Switzerland Tourism, 2004). Tourism Austria and the Austrian Hotel Association introduced a comparable campaign named “China Meets Austria” in 2005 (ÖHV, 2005).

For Switzerland, mainland China is now the largest Asian source market. From 2008 to 2012, the overnight stays rose by double-digits, resulting in an accumulated growth rate of 246.9 %: from 214,000 nights in 2008 to 744,000 in 2012 (BFS, 2013). The Swiss tourism board (Schweiz Tourismus) estimates 2 million overnight stays from China by 2020. China is expected to overtake even the neighbouring country Italy as a key source market for Switzerland (Schmid, 2012). The development for Austria shows a similar pattern, though slightly less dynamic. Between 2008 and 2012, the number of overnight stays from China to Austria grew by 133 percent from 217,115 in 2008 to 506,618 in 2012 (Statistik Austria, 2008–2012). Like Switzerland, China is the largest Asian incoming market and ranks among Austria’s top 20 countries of origin.

Switzerland and Austria are both Alpine countries in the heart of Europe. Their tourism products are more or less similar and mainly based on nature, landscape and culture: both offer outdoor, nature and/or activity-based tourism activities consisting of a hiking and/or mountain-biking during the summer season and snow sports during the winter season. In addition, both countries offer special interest leisure tourism with a focus on cities, wine, and wellness. In terms of differentiation, Switzerland offers unique shopping based on its luxury goods (like watches and jewelry), niche railway based products such as the Glacier-Express and UNESCO world heritage sites.

In contrast, Austria’s tourism products are based on their rich cultural heritage such as classical music, concerts, operas and movies (e.g. Sound of Music) as well as their Imperial heritage stemming from the Austrian-Hungarian Empire (Peters et al., 2011). Historically, both countries have depended heavily on geographically close markets like Germany, the Netherlands, Great Britain, Italy and Eastern Europe including Russia. In terms of currency and buying power, however, the countries are unique. Austria, as part of the European Union, is under the Euro currency system. Switzerland is not a member and still uses its Swiss franc currency, which gained in value in recent years, pushing export industries including tourism and hospitality into a competitive disadvantage.

From a European perspective, the differences in culture and national identity between Austria and Switzerland are likely quite clear. However, whether these differences are perceived from afar, particularly from markets outside Europe, they are less visible. DeS. 226spite their differences, for long-haul Chinese tourists the brand images of these two destinations may be perceived similarly and as a “once-in-a-lifetime” travel opportunity. Beyond Chinese outbound tourism, Switzerland and Austria have also seen an increase in Chinese students for educational purposes (hospitality, music and arts or engineering) and are also considered a finance and investment hub for the new affluent Chinese middle class.

5. Summary

A number of implications arise from the case presented above. The development of Chinese outbound tourism will, without a doubt, dominate the global tourism landscape in the foreseeable future. The number of Chinese visitors can be expected to increase, based on a more and more simplified visa application process in combination with increasing wealth, a higher disposable income and more financial means to be invested in outbound travel. This macro- and microeconomic foundation will be complemented by a stronger desire for outbound travel in general, as has been observed in other developing source markets such as Germany (during the ‘Wirtschaftswunder’) or Japan (during the 1980s). Plog (2001) illustrates how increasing travel experience leads to more confident travellers and changes in travel behaviour, resulting in a desire to explore new destinations and changing travel styles. Based on past developments, future generations of Chinese outbound travellers are expected to be more independent and adventurous while simultaneously demanding tourism products and services based on their Chinese cultural background (COTRI, 2015).

For the global tourism industry in general, as well as Alpine destinations in particular, it can be implied that existing products have to be adapted to meet the needs of Chinese travellers, while new products need to be created to meet the demand of this new source market. An appreciation of the Chinese currency (RMB) to Western currencies like the US dollar or the Euro may also stimulate the willingness to travel.

As the Chinese travel season is different than the ones of other core markets, this might provide a chance for destinations to extend seasons or increase visitor numbers during traditional off-peak times, such as October (Chinese National Day) or the so-called Spring Festival and Chinese New Year in January and February. However, destinations like Switzerland and Austria will be always be geographically removed from the Chinese market, and in this respect may attract only a fraction of travellers compared to China’s neighbouring tourism destinations in Asia (McKercher et al., 2008). Nevertheless, the rising number of Chinese outbound tourists may supply even far distant destinations with large visitor numbers, provided that the local tourism structures and industries are willing and competent to deal with new source markets.