TOURISM - CHINA MARKET POTENTIAL FOR THE AREA

This is a summary from Muskoka Tourism after a recent workshop in Toronto about this market.

During the recent G8 event, an Approved Destination Status (ADS) agreement was formally signed between China and Canada. While still tightly controlled and heavily regulated, ADS makes it somewhat easier for mainland Chinese residents to visit Canada. Over the years, China has signed approx 135 ADS agreements with other countries.

Recently, the Ontario Tourism Marketing Partnership organized an excellent presentation that discussed the inbound market potential from China.

READER’S DIGEST VERSION
· If you are comfortable working with the travel trade, developing inbound business from China is not a big leap. However, the business model is different and requires careful due diligence. Please review the presentation material from the Canadian Inbound Tourism Association and Henry Yau, VP, TPI-Silkway.
· Canada is considered a long haul destination and perceived as expensive. Chinese consumers are price sensitive.
· ADS has opened up potential business from meetings, conventions, incentive travel and events. (Think about the 16,000 Amway sales representatives from mainland China who recently visited Australia for 7 days on an incentive trip).

MARKET POTENTIAL
· China’s population is 1.3 billion people with 1/3 of the people living in urban centres and 2/3 in rural areas.
· The gap between rich and poor is widening. Approx. 5% of the population holds 50% of the country’s savings.
· It is estimated that China’s middle class is expected account for 40% of the population by 2030.
· Beijing, Shanghai and the Guangdong region are key geographic markets.

BRAND RECOGNIITION
· Canada fares reasonably well. Pre ADS, Canada ranked 5th out 10 countries in unaided destination awareness and 3rd in unaided destination consideration.
· The top four travel motivators for Chinese visitors include: beautiful scenery; vibrant cities close to nature: observing wildlife in their natural habitat: and visiting national parks/protected areas. This is an excellent fit with Muskoka’s product.
· Chinese consumers respond well to high end, luxury status products. Please note increase in visitation to France post ADS in 2004 (slide 20).

LIFT
Since ADS, air service between mainland China and Canada is improving:
· Air Canada – offering double daily Beijing/Shanghai-Toronto as well as Beijing/Shanghai – Vancouver service.
· Air China – increase flights from daily Beijing/Vancouver to 10 a week. Addition of Beijing/Toronto service in 2011
· Hainan Airlines – new possible 3 flights per week Beijing/Toronto.
· China Eastern- new possible daily service in peak time travel times.
· China Southern- new possible service for 2011.

SALES CHAIN
The sales chain is short, highly regulated and requires an ongoing, long term commitment:

Consumers
· All Chinese consumers must deal with approved retail travel agencies and tour operators based in China. This link provides a list of 465 approved retail outlets and tour operators in China http://en.cnta.gov.cn/TravelInChina/Forms/TravelInChina/TravelAgencies.aspx
· Each Chinese visitor must post a personal bond equivalent to $12,000 before he/she can leave the country.
· Each Chinese visitor must follow a strict visa process.

Chinese Tour Operators
· All approved outbound Chinese tour operators must deal with an approved inbound Canadian Receptive Tour Operator (RTO).

Canadian Receptive Tour Operators (RTO)
· All inbound RTOs are being accredited by the Tourism Industry Association of Canada. See this link for accreditation process http://www.tiac.travel/china/
· Click on this link for information about the 16 accredited RTOs in Canada as of August 2010 http://www.tiac.travel/china/accredited.htm

SUMMARY
· In the short term, China represents a medium size international market for Ontario with strong annual growth.
· Opportunity to create Toronto/Muskoka/Ottawa/Niagara long haul tour packages. Build on the affinity with Dr. Norman Bethune.
· ADS has cleared the way to implement marketing programs aimed Chinese consumers through approved Chinese tour operators.
· Follow the lead of the Canadian Tourism Commission and OTMP as they develop in-market campaigns.
· Develop strong relationships with approved RTOs in Canada promoting Muskoka experiences.