Video: The China Tourism Miracle

Within two decades, Chinese travelers have gone from being able to visit a handful of countries around Asia, to becoming the world’s largest outbound tourism market, and exploring every continent. Dragon Trail’s short video looks back at the history of Chinese outbound travel, social media, and online travel platforms – including Ctrip, WeChat, and Mafengwo – from 1999 to 2019.

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The China Tourism Miracle: 20 Years in the Making

1999

In 1999, Chinese outbound travel for leisure purposes had only been allowed for two years.

Australia and New Zealand became the seventh and eighth destinations to get Approved Destination Status this year, and the first outside of Asia to do so. The Approved Destination Status agreement, or ADS, allows Chinese to travel to a country as part of a group, and for the country to market itself as a tourism destination in China. Japan got ADS in the year 2000, the Schengen area in 2004, the UK in 2005, the US in 2008, and Canada in 2010. By the end of 2018, 130 countries have ADS agreements, with Panama the last country to join the list.

Chinese online travel agencies – or OTAs – Ctrip and eLong were founded in 1999, as was China’s second internet giant, Alibaba. The first Chinese internet giant, Tencent, started in 1998.

2000

China’s third internet giant, Baidu, was founded in the year 2000.

In the year 2000, the Chinese government introduced three week-long national holiday periods – in May, October and at Chinese New Year – giving Chinese citizens time to travel. In 2008, the May holiday was shortened, and several shorter holidays added to the annual calendar.

2003

Joint venture travel agencies were allowed to operate in China for the first time in 2003. As of the start of 2019, wholly foreign-owned travel agencies are still not allowed to operate in the PRC, though this may change, starting with Beijing.

2004

In 2004, Chinese travel review website Qyer was founded by a group of Chinese backpackers in Germany, focusing on independent, budget travel abroad.

Alibaba launched Alipay as a form of online payment for their e-commerce platform, Taobao. WeChat did not launch its payment platform, WeChat Pay, until 2013. Alipay and WeChat Pay would later become the two main players in the booming Chinese mobile payment market.

2008

The Beijing Olympic Games were held in 2008, symbolizing China’s opening to the world, and introducing the Chinese to many more countries, as well as the concept of sports tourism.

2009

China’s Twitter-like microblogging platform, Weibo, was launched in 2009. It would be China’s leading social media app until WeChat took over in 2015.

Chinese tourism-focused digital marketing agency Dragon Trail Interactive was also founded this year.

2010

In 2010, The Shanghai World Expo let international destinations showcase their best side to millions of Chinese visitors. The same year, Chinese travel review website Mafengwo was founded.

2011

In 2011, Chinese social media platform WeChat was released as a chat-focused app. By 2015, WeChat had grown to be China’s leading social media app, exceeding 1 billion users in 2018. Its functions now range from QR code scanning and sharing photos with friends, to booking airplane tickets and official brand marketing and advertising.

In less than 10 years, China has become a mobile-first market. In 2011, just over 1% of Chinese online travel bookings were made on a mobile device. Six years later, in 2017 over ¾ of travel bookings were made via mobile. Mobile payments have also taken off in recent years, with nearly 80% of Chinese smartphone owners using mobile payments by October 2018.

2013

China’s first tourism law governing outbound tourism came into effect in 2013, regulating the quality of outbound tourism packages and banning forced shopping for tour groups.

2014

In 2014, Alibaba upgraded its online travel business, Taobao Travel, into Alitrip, as the company sought to expand its role in China’s online travel market. Alitrip was later rebranded as Fliggy in 2016.

In the 2010s, the traditionally male-dominated Chinese outbound travel market became increasingly female, with women making up more than half of all Chinese tourists by 2014. Between 2016 to 2018, Chinese independent travelers also shifted from being 46% female to 58%, according to Ctrip.

Another major shift in the 2010s was from group travel to independent travel. Although this figure varies significantly depending on the destination, package groups now make up less than half of Chinese outbound trips, with fully independent and semi-independent travel – including customized tours – growing each year.

2016

With 117 million trips abroad, China became the world’s largest outbound tourism market in 2016, a position it has held ever since. 2016 also marked the first year that Chinese travelers took more trips outside of the Greater China destinations of Hong Kong, Macau and Taiwan, than within this region.

2018

In 2018, The China National Tourism Administration merged with the Ministry of Culture to become the new Ministry of Culture and Tourism. Upgrading tourism administration to the ministerial level is a sign of the growing importance for both inbound and outbound tourism.

2019

20 years after it was founded, Ctrip is the OTA market leader in China, and the second largest OTA in the world, having invested in or bought out overseas travel platforms Skyscanner, Makemytrip, and Trip.com. The history of China’s online travel market has had many surprises over the years, with a trend towards consolidation as Ctrip and China’s internet giants strengthen their standing. Remember eLong, which was also founded 20 years ago, the same year as Ctrip? Expedia invested in eLong in 2004 and became the majority shareholder in 2011 – the same year that Chinese internet giant and WeChat parent company Tencent entered the travel market, acquiring a 16% share. But in 2015, Expedia sold all of its eLong shares, and Ctrip – which had by that point emerged as the OTA market leader – acquired 37.5%. Also in 2015, Baidu became the largest shareholder in Ctrip.

eLong, which is still partly owned by both Ctrip and Tencent, merged with Tongcheng in 2018. In the meantime, Ctrip also became the majority shareholder in what used to be its biggest rival, Qunar. While newer rival Meituan-Dianping has made major gains in domestic hotel bookings and lower-tier city markets over the past several years, Ctrip continues to dominate outbound travel, adding services like customized travel, virtual guides, and emergency assistance for Chinese travelers around the world.

Within two decades, Chinese travelers have gone from being able to visit a handful of countries around Asia, to exploring every continent – including Antarctica, where Chinese are now the second largest source market. With greater market segmentation, sophistication, and emerging demographics such as silver travelers and tourism from lower tier cities, the future of Chinese tourism still has many developments and changes in store for the coming years.