Foreign tourists spent about 20% more here during the first six months of 2010 than they did a year earlier, Visa (V) reported. American citizens also boosted their spending abroad, increasing travel purchases on their Visa cards by 9.3% compared to the same period in 2009, the company said.

The spending increase from overseas reflects what travel industry members are hoping is a rebound in foreign tourism spending, which dropped 12% in 2009 to $32.9 billion. Europeans in particular appeared to cut back substantially on U.S. travel last year, when British citizens decreased their spending in the U.S. by 26% and Germans cut spending by 15%, according to Visa.

Brazilian and Chinese tourists showed the largest increases in this year’s surge, combining to spend more than $1.1 billion during the first half of the year and boosting spending by more than 70% each. Canadians remained the biggest foreign contributors to U.S. tourism, outspending the citizens of No. 2 Great Britain by an almost a four-to-one margin. Tourists from Mexico increased spending by 24% after cutting it by 19% last year, while Australians increased their spending by 44% to $490 million, Visa said.

Gulf Oil Spill Putting a Dent in the Numbers

The gains appear to be reflected in steadily improving U.S. hotel results. Revenue-per-available room (RevPAR) for U.S. hotels during the first half of the year increased 2.3% from a year earlier, as occupancy improvements more than offset a slight drop in average daily rates, STR Global said in a July report. New York hotel RevPAR increased 15% during the first half of the year, while Boston RevPAR was up 14%, according to STR Global.

“We didn’t expect it to go negative two, three or four years in a row,” said Jan Freitag, vice president at STR Global, “It’s great to see the Chinese traveling again.” Freitag added that Australia appears to have come through the global financial slowdown particularly unscathed.
Whether the spending boost will hold for the second half of the year remains to be seen, especially with the massive BP oil spill in April hampering Gulf Coast tourism. June tourism spending in the U.S. from overseas was down 9% from a year earlier as Florida, Louisiana and Mississippi each experienced substantial declines.

Still, the apparent economic recoveries in parts of Southeast Asia and South America are providing a much-needed cash infusion to much of the rest of the country, according to Visa.

“The growth in inbound spending in early 2010, particularly from source markets such as China and Brazil, reinforces how Asia-Pacific and South America are seemingly the first to emerge and rebound from the challenging environment that defined 2008 and 2009,” said Bill Sheedy, Visa’s group president for the Americas, in a statement.

Source:  DailyFinance -  September 01, 2010

Brazilians and Chinese Rediscover America as Tourist Spending Surges is a post from: China Travel Trends

China, which recently overtook Japan as No. 2 on the world’s gross domestic product list behind the United States, is No. 1 as far as hotel development in the Asia/Pacific region goes, according to STR Global data.

Damien Little director Horwath HTL

As China’s economy has grown, so too has domestic travel, said Damien Little, director of Horwath HTL in Singapore. Plenty of stimulus money has been pumped into the Chinese economy, and the government has loosened some property-development regulations, which have served to aid in development of the hotel sector.

“The property market went through the roof in 2009,” he said, adding, “China certainly knows how to invest in infrastructure.”

There were 406 projects comprising 139,193 rooms during July in the hotel development pipeline in China, according to STR Global. The 98,515 rooms in the in-construction phase of development represents 70.8% of the total number of rooms in the country’s pipeline.

And the 139,193 rooms in the pipeline is nearly three times that of India, which is second in the region with 46,562 rooms in the pipeline, according to STR Global.

“The travel industry in China is very strong,” said David Sun, CEO of Shanghai-based Home Inns & Hotel Management.

Expansion goal

Home Inns, which has approximately 660 hotels and 76,560 rooms located in mainland China, is seeking to take advantage of the country’s explosive growth. Sun said the company’s goal is to reach 1,000 hotels next year.

David Sun CEO Home Inns & Hotel Management

The company has 200 hotels comprising approximately 23,200 rooms in its pipeline. During the second half of the year, the company intends to open 140 hotels and approximately 16,240 rooms. Currently operating in 126 Chinese cities, Sun said the company’s goal is to bump that total to 180.

Sun said his hotels have noticed a pickup in business travel, but the company saw extremely strong demand overall during the second quarter. Home Inns reported 96.4% occupancy in the second quarter, up from 92.4% a year earlier.

Overall, China reported occupancy in July of 63.4% in July, up 15.5%; average daily rate of CNY713.01 (US$104.82), up 16.1%; and revenue per available room increased by 34.1% to CNY451.74 (US$66.44).

“Growth in demand has been impressive,” Little said.

Of its customer mix, 60% of Home Inns’ guests are business travelers and 99% of all guests are domestic,  Sun said. Despite leaning more toward the business traveler, leisure has proven to be an important segment for the budget chain during the ongoing economic recovery. People are feeling more confident in taking vacations, but they remain budget-conscious and are seeking out low-cost hotels, he said.

Long-term demand?

Aside from an improving economy, big events have helped bring people to the country. China hosted the 2008 Olympic Games in Beijing and Shanghai is hosting the 2010 World Expo from 1 May to 31 October.

Two years on from the Olympic Games and the city-wide frenzy of hotel building that went alongside it, Beijing hoteliers are celebrating a strong recovery despite fears of oversupply and competition from the Expo in Shanghai.

The hotel market in Beijing and China as a whole has improved significantly since late 2009, which has helped galvanise the global hotel sector from crisis mode to slow growth. STR Global report occupancy rates in Beijing nearly doubled during June 2010 from the previous year, up 33.5% to 66.3%, while revenue per available room was up 41.2% to US$63.52 during the same period.

“The increase is due to a number of factors: the recovering Chinese and world economy, the stabilising supply increase and an increase in demand,” said Konstanze Auernheimer, director of marketing and analysis at STR Global.

With that recovery has come development. There are a total of 23 hotels in development in Beijing, comprising 6,267 rooms, according to STR Global.

The place to be

The added supply will be needed if the city’s tourism numbers keep growing. From January to June 2010, the total number of tourist arrivals in the city increased by 8.2% year-on-year to a record 80.31 million, according to the Beijing Tourism Administration.

A rendering of the InterContinental Beijing City Centre, which is planned to open next year.

“We have seen a very nice rebound in business in 2010 and are tracking much better than what we had budgeted in both the leisure and business segments,” said Anthony Ross, general manager of 5-star boutique The Opposite House.

The World Tourism Organization predicts China will become the world’s most popular tourist destination by 2020 and predicts the next 10 years will be a decade of expansion and growth.

Sarah Keenlyside, founder of travel consultancy Bespoke Beijing, said business is on an upswing.

“We’ve certainly seen an improvement on this time last year,” she said. “People seem to be shrugging off the recession talk in search of a much-needed holiday. What we have noticed, however, is that more people are asking for better value for money from their hotels than they were before. This means hotels like Hotel G, who have rooms under RMB1,000 (US$150) including breakfast, are doing extremely well.”

InterContinental Hotels Group is also confident about China and plans to more than double in size in the next five years. The company has 18 hotels in the Chinese capital and earlier this year signed an agreement for developing InterContinental Beijing City Centre, the third InterContinental hotel in the city.

Keith Barr, managing director for IHG Greater China said Beijing is an important market for the company in part because of its popularity among business and leisure travelers and because of its growing influence after the Olympic Games. IHG has a long history in Beijing, and the country is the second largest market for the company in terms of rooms and revenue.

“IHG was one of the first international hotel companies to enter China: Holiday Inn Lido Beijing, our first hotel in the country, opened in Beijing in 1984. We continue to expand and see great potential there,” Barr said.

In addition to the new InterContinental in the pipeline, Shangri-La’s luxury property China World Summit Wing, Beijing is set to open later this month in the city’s tallest building, and a new Hilton at Beijing International Airport opened in July, the third Hilton property in the city.

“Hilton continues its rapid growth across Asia, and this hotel brings a new dimension to our growing portfolio in Beijing, which already includes the world’s top lifestyle hotel and another of the city’s top metropolitan hotels,” said Martin Rinck, area president, Asia Pacific, Hilton Worldwide.

Source: HotelNewsNow.com (August 30, 2010)

China hotel development is booming is a post from: China Travel Trends

He believes this will prove a boon to hotels on Hainan, the tropical island off China’s southern coast, and to various other destinations in Southeast Asia.

“It is the next big growth story in China which has yet to happen. People are going to start to ask themselves in the winter: ‘Why are we living in Beijing?’,” he said.

Butcher predicts the wave of people fleeing to the south will be just as big a phenomenon as people in northern Europe taking their holidays in Spain and the Canary Islands over the past 30 years. He also believes the pattern will be similar to Americans wintering in Florida.

“We haven’t scratched the surface of this yet. Sanya (on Hainan island) is already growing rapidly and there are a number of resorts there already,” he said.

“If you go to Sanya beaches, they are better than Hawaii, pure white sand and crystal clear water.

“It is going to be phenomenal when it develops in a big way and change the whole way southern China works.”

Langham, which is wholly owned by Hong Kong-listed Great Eagle Holdings in which the Lo real estate dynasty has a major stake, is planning to open a hotel in Sanya and believes its three luxury hotels in Hong Kong, which also benefits from a warmer climate, will receive a boost from this trend.

“It is going to affect Hong Kong and also Macao and we are going to have resort cities we have never even heard of today,” he said.

Langham opened its first hotel on Regent Street in London in 1865, described as Europe’s first ever Grand Hotel which also pioneered the use of hot and cold running water.

It currently has 11 properties and is to open a further 24 in the next three years.

In the Chinese mainland, it already has The Langham Yangtze Boutique Hotel and the Eaton Luxe, Nanqiao in Shanghai and plans to open four more in the mainland, including a Langham Place at Beijing Capital Airport Terminal 3, which is scheduled to be ready by August.

Butcher said the China hotels market is proving to be remarkably resilient after a very difficult year last year following the economic crisis.

“There has been a dramatic recovery this year. The China hotels market is an amazing story. If you track back to the Asian financial crisis and then the SARS outbreak, after every setback it has always managed to return to its previous trend line of almost exponential growth. It has the ability to just juggernaut its way through. It should be back on track again by 2011,” he said.

“If you look at the United States now, it is going to take five, six or seven years to right itself following the financial crisis and get back to the trend line it was on before.”

Butcher, who studied hospital management at Queensland University, began his career in restaurants before joining Sheraton, where he was involved in the opening of its Shanghai hotel in the mid-1980s.

He said the hotel industry in China was a completely different animal to what it is today.

“At that time China was not really on the radar. Then it was all about business travelers who were starting to form the manufacturing hubs in China and they were just looking for a decent place to stay,” he said.

He said that since then China has been subject to a worldwide trend, which has seen the focus of the hotel industry switch to the leisure traveler.

“That has been the trend worldwide also over the past 25 years. Tourism has grown exponentially over that period,” he said.

Butcher said the trend suits a five and four star hotel group such as Langham since the leisure traveler now demands the luxuries.

“Leisure guests are more demanding. They want the lifestyle product. They are happy to pay for suites,” he said.

“The corporate sector no longer wants to pay for that. The business traveler just wants a hot shower, a cold beer and a place to do business. The corporates who used to pay the highest rates in a hotel now, in fact, pay the lowest.”

Butcher, who went on to join Langham in 2002, says one of the dangers in China is the rush to build hotels for specific developments such as the Beijing Olympics.

“In the run up to the Olympics I was asked by journalists whether I was going to build a hotel in Beijing. I found it mind-boggling that anyone would ask that. You don’t build a hotel for a two-week event. It is a 40-year deal,” he said.

He said the five star market was often over-supplied in China with much “return on ego” rather than return on capital projects.

But he added: “Land can be very expensive in China and it is difficult to justify that price if you just build a two star hotel. The cost of the land as a proportion of the development is too high. A five star hotel is a longer play and it does take longer to establish itself,” he said.

Butcher said the US market, where Langham has two properties – in Boston and in Huntingdon, Pasadena in Los Angeles – has been hit hard by the economic downturn.

“The US market unlike others is very dependent on conventions such as of dentists or whatever. There is an association for almost anything and it is this market that has been particularly badly affected,” he said.

On the Chinese mainland and in Hong Kong, the main focus of Langham’s business is mainland tourists, which Butcher believes will make up 90 per cent of those staying in its mixture of four star and five star hotels. It aims to cater for them with hotel brands that either reflect European or contemporary style, rather than the East meets West feel of many of its competitors. Butcher believes this is what many Chinese people now want.

“Why do you see the mainland tourists lined up outside Louis Vuitton? It is because they want a sense of style from Europe. So we are clear our hotels are going to be well positioned. Whereas other hotel brands are heading down another track being very Asian influenced, colonial or whatever, we are something that is radically different. It gives us a great platform,” he said.

Butcher said the group was trying to develop a new silk route, opening hotels throughout China, through Thailand, India and also the Middle East. The target in China is to have hotels in at least 15 cities, including Chengdu and Chongqing in western parts of the country.

“I think eventually half of our hotels will be based in China and we believe they will appeal very much to the Chinese market we are aiming at,” he said.
“It is going to affect Hong Kong and also Macao and we are going to have resort cities we have never even heard of today,” he said.

View of the China Opportunity by Langham Hotels CEO is a post from: China Travel Trends

“At mid-year 2010, we have already seen many of the air and hotel indicators recovering more quickly than many analysts had expected,” according to authors of the study, sponsored by Visa. “Corporate travel is only beginning to re-emerge after draconian cuts in meeting and transient budgets over the past two years.” They pointed to “overall business optimism” and noted that “business travelers are moving towards the front of the aircraft once again.”

Authors also wrote that business travel spending would expand more quickly in 2011, “but we do not see return to the [growth] rates experienced in 2006-2007. The global economy will simply not have the underlying vigor to push the demand for business travel forward at those lofty rates.”

To update last year’s study, NBTA Foundation hired research firm Vantage Strategy. To calculate business travel metrics, Vantage used travel data from suppliers, governments, a D.K. Shifflet & Associates travel panel, industry associations and travel management companies, and economic data from IHS Global Insight, Morgan Stanley, the Organization of Economic Co-operation and Development, and Deutsche Bank. Additional data was derived from a survey of more than 500 financial managers “at a representative sample of U.S. public and private companies,” and other sources. “The combination of the forecast of industry sales (macroeconomic environment) and the trend in business travel spending per dollar of sales (business travel intensity and productivity) was used to generate the growth projections,” according to the report.

Asia Booming

Researchers predicted that Asian economies on average would grow “at about twice the rate of the American economy,” and that Asian business travel markets would grow “at about four times the rate of the United States.” Because Asian regional economic growth is “gradually becoming less export-dependent and is being driven more by domestic demand,” study authors expect domestic business travel to “soar.”

China was the only country covered by the research to increase business travel spending in 2009, with growth at 8.5 percent. With an estimated compound annual growth rate for business travel spending accelerating to 16 percent during the next four years, researchers expect the country by 2015 to surpass the United States as the world’s largest business travel market. Just in the wholesale trade sector, China’s business travel spending gains through 2014 “will be larger than the United States, Spain, South Korea, Italy, France, Canada, Brazil, Germany and Japan combined.” Most other Chinese industries are expected to show double-digit CAGR for business travel spending in that time, including the construction and utilities sectors, as “large funds will be poured into infrastructure” to handle the country’s economic expansion. The country’s 11.9 percent economic growth in the first quarter was “the strongest in two years.”

South Korea’s business travel spending is expected to leap 21 percent this year, followed by 7.2 percent average growth per year through 2014. Long-term business travel spending percentage growth rates in India, Indonesia and Singapore are expected to be in the double digits. Japan’s business travel spending is expected to grow much more modestly, at about 2 percent per year during through 2014. “This will be largely dependent on exports, fueled by a stronger global economy over the next few years.”

Europe Struggling

Researchers expect Europe to be the only region for which business travel spending drops in 2010. “The growth and debt dynamics of some Eurozone economies remain quite precarious,” according to the report. “Along with Greece, Portugal and Spain are especially vulnerable.”

The United Kingdom is expected to show a marginal decline in business travel spending as it “suffers from a lack of consumer confidence” while “businesses are not willing to reinvest.” The banking/finance and professional/business services sectors account for nearly 17 percent of the country’s total business travel spending, and “will not recover until 2011.” Longer-term, however, the United Kingdom through 2014 is expected to achieve business travel spending CAGR above 8 percent.

France also is expected to experience a marginal business travel spending decline in 2010, but will rebound in 2011 with growth above 7 percent, researchers predicted. That rebound will be driven by “a successful fiscal stimulus coupled with increased consumer confidence and demand.” The country’s “staple” industries of transportation services and social/personal services are expected to “fare the best” during the next few years.

Like France, Germany will see a roughly 1 percent drop in 2010 business travel spending, followed by a 7 percent gain in 2011. “Government stimulus in 2008 and 2009 has helped to ease declines in output and should help to bring about faster recovery,” according to the study.

For 2010, business travel spending contraction also is expected in Spain and Greece (each down 4 percent), Ireland and Italy (each down 3 percent), and Portugal (down 2 percent).

Americas Spending To Grow Modestly

At $237 billion, the United States in 2009 remained the largest business travel market, “but its share is dropping quickly in the wake of growth powerhouses such as China, India, Brazil, and South Korea,” according to researchers. U.S. business travel spending is expected to grow 2.5 percent this year, 3.2 percent in 2011 and 2.4 percent on average during the four years through 2014–”half of the world average,” according the report. The government sector is not expected to keep up its strong 2008 and 2009 travel spending growth related to “bailouts and fiscal stimulus plans.”

Meanwhile, Brazil this year is expected to sharply increase business travel spending, by nearly 20 percent, after a 9 percent drop last year. Researchers pointed to strong growth for the government and petroleum refining sectors.

Elsewhere in the region, the study predicted Panama’s annual business travel spending would grow 9 percent on average through 2014, followed by Ecuador (7.5 percent), Bolivia (7.2 percent), Uruguay (6.3 percent) and Canada (6 percent).

Global Recovery

The study indicates that business travel recovery will not be uniform across the globe. Asia, Latin America, and the Middle East are expected to grow more rapidly than North America and Europe. China, the only nation that grew business travel last year (8.5%), and other Asian markets currently add business travel spending at about four times the rate of the United States. In fact, China is expected to grow by double digits in 2010 and add nearly $130 billion in new business travel spend by 2014, surpassing the U.S. market in size by as early as 2015.

“Visa values its relationship with the NBTA and believes that its new research and reporting on the travel marketplace will be a valuable tool for organizations throughout the industry,” said Rafael De la Vega, head of commercial solutions, Visa Inc. “This report comes at an ideal time – when economies are fluctuating and corporate cultures are shifting. Visa is proud to help the NBTA offer this resource to corporate travel professionals and businesses around the world, providing an outlook to help both buyers and suppliers.”

Business Travel Spend by Industry Sector

Industry sectors reacted differently to the Great Recession, according to the study. After several years of double-digit growth because of a booming economy, business travel spend in utilities declined by almost 14% last year but is expected to rebound quickly in 2010. Real Estate, one of the main drivers of the global recession, is predicted to bottom this year and begin to recover slowly. Business travel spending from the Government sector, on the other hand, experienced no decline thanks to fiscal stimulus package, but is expected to grow slowly in the coming years.

Those with the largest projected increases in business travel spend over the next five years include: Utilities ($38.2 billion), Food Processing and Services ($32.2 billion), Real Estate ($23.2 billion), Rubber & Plastic Manufacturing ($18.2 billion) and Social & Personal Services ($17.9 billion).

Banikowski commented, “By analyzing travel spend and recovery by business sector, this report will help corporations determine the pace they should maintain in preparing travel programs for greater volume or more cost savings opportunity. Some industries, more than others, can realize from this report that an aggressive stance toward investing in business travel can grow top-line revenue.”

Global Business Travel Spending by Major Category

Global business travel air spending, comprising one-fourth of total trip spending, is estimated at $201 billion in 2009, down 13% from 2008. Business travel comprised 54% of total airline revenue in 2009, which is expected to fall this year as leisure travel begins to recover.

The study also found that business travelers are responsible for 14% of total global hotel and restaurant sales. In 2009, hotel, food and beverage spending comprised about 41% of the global business trip budget for a total of $359 billion, a decline of nearly 7% compared to 2008.

The full study, the NBTA Foundation Business Travel Market Metrics: A Global Analysis of Business Travel Activity, will be available to all NBTA Members and select Visa customers free of charge. Attendees of the 2010 NBTA International Convention & Exposition, to be held August 8-11 in Houston, will have the opportunity to hear details of the report at the Business Travel: Global Market Measures education session on August 9 at 9:15 am. Attendees will also receive an executive summary of the report, which is available on thumb drives at the NBTA booth in the Exposition Hall.

Manufacturing To Lead The Way

On a global basis, the basic metals manufacturing industry is expected to increase 2010 business travel spending by the largest ratio of any in the report, more than 30 percent. It is followed by petroleum refining (22 percent) and communication equipment (15.8 percent). Other double-digit percentage gainers would include mining, textiles, education and various manufacturing sectors.

“Industries that are export oriented and with a strong presence in Asia, such as food processing, plastic manufacturing, paper, textiles and industrial machinery have been less aggressive with cuts to T&E,” according to the report. “Companies in sectors that typically lead the larger business cycle would already be showing signs of improvement and, therefore, have apparently relaxed some travel restrictions. Examples include electrical machinery, industrial machinery, transportation equipment, paper, and basic metals. Sectors that were beneficiaries of fiscal stimulus programs, including government itself, may have also had reason for a less aggressive travel cost-cutting stance. Education, construction (particularly public construction) and utilities come to mind.”

On the other end of the spectrum, the study predicted that the printing/publishing and professional/business services sectors would show marginal business travel spending declines in 2010, while the construction and equipment rental/leasing would increase spending by less than 1 percent.

“Industries that have proven to be travel-intense, such as business services and banking have a greater incentive to more aggressively cut T&E budgets during recession and the early stages of recovery,” according to the report.

Source: National Business Travel Association (August 12, 2010)

China expected to surpass the United States as the world’s largest business travel market by 2015 is a post from: China Travel Trends

Professor, what a strange question. Why China’s outbound tourism will survive the economic downturn

A few years ago I spent some weeks teaching to undergraduate tourism students at Sun Yat-sen University in Guangzhou (Zhongshan Daxue). When I asked them to think about how an economic downturn in China would influence inbound, domestic and outbound tourism development in China, they answered politely but clearly puzzled: Professor, what a strange question! China’s economy has always been growing by 10% or more, there can be no downturn. Only then I realized that these students, born in 1986/87, never experienced anything but the continuous increase of China’s economic power and success.

Today, more and more voices are joining Jim Chanos (of Enron fame) in predicting the burst of the China bubble. I have witnessed the Chinese economic miracle since 1978 and it seems obvious to me that the neck breaking development speed must slow down sooner rather that later as the boomerangs of environmental degredation, consumerism and aging society, to name a few, are coming back to hit hard those who throw them.

So, revisiting the question today: How will a future Chinese GDP increase of only 3 or 4 per cent influence the international travel patterns of the affluent Mainland Chinese? Answer: Less than many destinations which just recently discovered the Chinese tourism source market might fear. Why?

Chinese international travellers, especially those travelling long distance are not travelling for their personal enjoyment. More important are trips with a major purpose of business, education or Visiting Friends and Relatives. But even the “leisure” trips to Europe, Australia, North America or Africa are not performed by “holiday makers”. To have a good time with decent food and people who understand the Chinese language and culture is easier, cheaper and more convenient to get within the “Chinese world” of Hong Kong, Macao, Taiwan and Southeast Asia. Intercontinental travel is first of all for prestige and status, for the traveller him/herself and for China as a whole, demonstrating Soft Power by the number of Chinese who can afford to go abroad. Having prestige and status is not just vanity, but a necessary precondition to be a successful member of the in-groups of the different part of the Chinese upper class. Accumulation of social and cultural capital is needed especially in a group-orientated society with only weakly established rule of law.

For western leisure tourists, to economize on travel expenses is a private decision, for affluent Chinese it would be a sign of weakness to the surrounding society. The coming economic downturn might hurt the sales of Rolls-Royce in China, but a few thousand dollars for an international trip will still be seen as a necessary and affordable investment.

Source: China Travel Trends – August 17, 2010 (CTT Expert Panel Member)

Read more articles by Professor Wolfgang Arlt.

Why China’s outbound tourism will survive the economic downturn is a post from: China Travel Trends

Particularly, in the period, the sales growth of the hotel operations under eLong overtook that of archrival Ctrip.com International Ltd. (Nasdaq: CTRP | PowerRating), which hit 34%, for the first time since 2006, thanks to the former’s coverage of low-end hotels.

eLong has reached agreement with GreenTree Inn, according to which they will focus on the interests of customers. eLong reduces commissions asked from its partner while GreenTree open its hotel rooms to the former. Thus, eLong operates 12,200 hotels with which it has inked contracts.

In summer, eLong kicked off promotions for 3,000 hotels, which provided convenience for the holidaymaking of tourists, and bolstered up the growth of the company. Cui says that eLong supports the direct sales of hotels, on the premise that the move does not harm the interests of the company, since direct sales costs more money.

Source: www.enet.com.cn (August 17, 2010)

For full details on Ctrip.com International (CTRP) CTRP. Ctrip.com International (CTRP) has Short Term PowerRatings at TradingMarkets. Details on Ctrip.com International (CTRP) Short Term PowerRatings is available at This Link.

For full details on Elong Inc (LONG) LONG. Elong Inc (LONG) has Short Term PowerRatings at TradingMarkets. Details on Elong Inc (LONG) Short Term PowerRatings is available at This Link.

Source: Trading Markets – August 17, 2010

eLong Outpaces Ctrip.com in Hotel Sales is a post from: China Travel Trends

Key element is using digital primarily as a communication device; while younger teens and university students focus on social sharing, communication, MP3 downloads, etc – young professionals take a more practical approach to digital. That’s not to say its any less a part of their lives; we can venture to state that digital is more of a tool than a companion.

We see some integration of email, sms, digital news sprinkled throughout the day; digital, rather than being the goal of actions, is a simple means of enhancing actions.

Day in the Digital Life: China’s Young Professionals is a post from: China Travel Trends

The previous three quarters of 2009, despite the financial crisis, and H1N1 influenza, the Chinese tourism industry managed to maintain favorable growth conditions. In Q1-Q3 2009, a number of domestic tourists in China is 45 billion, 11% increase over the same period of 2008, income from domestic tourism came to RMB 740 billion, 10% more than the same period, the 2008th In 2009 Q1-Q3, the number of foreign tourists amounted to 94 million, a loss of 3% over the previous year, the foreign inbound tourism revenue reached CNY 28 billion to fall by 7%. The previous three quarters of 2009, the number of Foreign tourists in China 35000000, 2 4% increase compared to the same period of the 2008th Currently, China’s tourism industry in the complete recovery of improving the functioning of the status, stable employment in tourism, investment and vacation activities.

On the one hand to prevent the global financial crisis has reduced demand for Chinese tourism, and one of China’s tourism industry continues to be favorable opportunities for development and the environment. Therefore, China’s inbound tourism maintained a stable and healthy development. In addition, increasing urban and rural residents ‘incomes, consumers’ demand for domestic tourism is very high.

1 December 2009, the opinion of the State Council of the accelerated development of the tourism sector have been published, the Chinese industry’s impact on the tourism industry and maintain a strategic pillar of the economy for the first time. This provides new opportunities for developing China’s tourism industry. It is predicted that China’s tourism industry recovered a remarkable growth in the industrial 16th 2010 50%.

Despite the financial crisis and HIN1 flu, China’s inbound tourism market in 2010 is expected to enjoy prosperity. Compared to the outbound tourism, China’s inbound tourism, is apparently not influenced by external factors not included. On the contrary, many tourists were originally planning inbound tourism, outbound tourism has changed, further driving China’s domestic tourism market.

World Expo Shanghai 2010 and the 2012 Guangzhou Asian Games will be opened unprecedented opportunities for prosperity, etc. in China’s tourist industry. This legacy of the Olympic Games in Beijing and Shanghai World Expo and so attracts a large number of domestic and foreign tourists over a longer period of time.

After the professional forecasts for the year 2015 the number of domestic tourists in China 80 billion each, while the number of foreign tourists, trips, up to 100 million euros. In 2015 the added value of China’s tourism industry, 282 billion, 11% of China’s service industry, and a total $ fourth 8% of Chinese GDP. On this basis, through the United Nations World Tourism Organization (UNWTO), China developed to predict the world’s top inbound host country’s fourth largest source of outbound tourism in the 2015th

China Inbound Tourism Growing in 2010 is a post from: China Travel Trends

Japan as new Shopping destination for Chinese is a post from: China Travel Trends

Source: Xinhuanet.com – July 29, 2010

Low Euro drives Chinese Shopping Spree is a post from: China Travel Trends

Source: Shanghai Daily – July 20, 2010

Chinese can live out Korean Soap Operas is a post from: China Travel Trends

The new venture would be fresh competition for Baidu.com, a private company that runs China’s dominant search engine. Baidu has seen its market share grow since Google retreated from the mainland earlier this year.

State-owned China Mobile — the world’s biggest cellphone carrier — and Xinhua, China’s official state-run news agency, signed an agreement Thursday to create a joint venture called the Search Engine New Media International Communications Co.

China already has the world’s largest number of Internet users, more than 420 million, and also the largest number of mobile phone subscribers, more than 800 million.

Private startup companies play a big role on the Web in China, but the government maintains tight control over Internet firms and censors what it deems to be dangerous or sensitive content.

Now, though, analysts say Beijing is pushing state-run companies to take a more active role online. China Central Television, the nation’s dominant broadcaster, is trying to develop its own online video site. Xinhua News Agency is trying to build a global platform of news providers using television and the Internet.

At the announcement of the joint venture in Beijing on Thursday, Zhou Xisheng, vice president of Xinhua, said the new company would build a leading search engine platform. But he also said the move was “part of the country’s broader efforts to safeguard its information security and push forward the robust, healthy and orderly development of China’s new media industry.”

Representatives of Baidu could not be reached for comment.

For years, Baidu has dominated Internet search in China holding a sizable lead over Google, which entered the market late. Earlier this year, Google pulled its search engine out of Beijing after complaining about censorship and online attacks that appeared to be coming from hackers in China.

Google now operates its Chinese-language search engine from Hong Kong; it is accessible from China but some results are censored by the government.

Most of China’s other big, private Internet companies are involved in online games and entertainment. But on Monday, Alibaba.com, one of the country’s biggest e-commerce sites, said the company and a fund co-founded by its chairman would acquire a 16 percent stake in the search engine Sogou, which is owned by the Chinese portal Sohu.com.

Yahoo, the U.S. portal, holds a 40 percent stake in the Alibaba Group.

Source: New York Times – August 13, 2010

China to Build State-Run Search Engine is a post from: China Travel Trends

The new office, which opens in Shanghai Aug. 18, is in the heart of the city’s business district in the U.S. Commercial Center and shares quarters with the U.S. Commerce Department and other American tourism-oriented agencies. The six-year-old Beijing office moves to a smaller facility. The total cost of office space in China will be cut in half while the value and strength of NCOT’s representation will be multiplied.

“We wanted to aggressively expand promoting tourism to Nevada in Shanghai, China’s largest city and a major hub of commerce and culture, and we found a way to accomplish this goal and cut costs at the same time,” Krolicki, NCOT chair, said.

NCOT was granted the first license ever issued by the Chinese government to a U.S. tourism agency to advertise to outbound Chinese travelers in 2004 and opened an office in Beijing. Karen Chen, NCOT’s representative in China, will work with both the Beijing and Shanghai offices, each staffed with a fulltime representative for Nevada.

“The Shanghai office will give Nevada tourism a direct and affordable presence in China’s largest financial center, port and retail market and provide great opportunities to work with other U.S. partners to extend our reach,” NCOT Director Dann Lewis said.

NCOT has brought numerous Chinese journalists and tour operators to Nevada this decade to promote statewide attractions.

Nevada Commission on Tourism Expands Marketing in China With Office in Shanghai While Cutting Costs is a post from: China Travel Trends

Social media on the user’s purchase decision had more important effect. The entire Asia-Pacific region, when the user consider buying decisions, product related comments will be network as the third largest source of trustworthy information, rankings while before the family and friends is to provide information or advice. This is a user of electronic products, cosmetics and automotive goods especially embodied in decision-making process, users tend to buy these products for more information on the adoption of network comments.

Of course, not all are so, in fact, countries the way users use social networking sites and the intention is different. Blogging is more popular in Japan: – Japan has the world’s favorite users to write the title of the blog, publish blog posts per month up to more than one hundred 10 thousand, much higher than other countries in the Asia-Pacific region. – The number of Japanese Internet users growing use of Twitter, unique visitors from last year’s less than 20 million to 1,000 million at present. – 16% of Japanese Internet users are currently using Twitter, and the United States compared to only 10%.

China‘s social networking roots to attract celebrities: – BBS forum make social media more popular in China, more than 80% of China’s social media content from the BBS forum. – As a kind of social game is to attract new customers and get existing users to pay attention to the stimulation, while the content sharing line is more prevalent in more experienced users, at the same time, virtual goods has become the most profit social networking a form of income generation. – “Grassroots” network of celebrities in China to dominate the exchanges, Internet users, “Feng’s” concerns such as social media stars over the real star. – In the entire Asia-Pacific region, China, like most Internet users in the network issued a product-related negative comments, but also the only Chinese Internet users are more willing to publish negative comments, the trend over the momentum of positive comments published. About 62% of Chinese Internet users said they were more willing to share negative comments, while the global ratio is 41% of this.

Threat to the Indian market in Facebook Orkut – even though 70% of the Indian social media users will be Google’s Orkut social media sites as the preferred social media sites, but with about 50% of Internet users in India that often use Facebook, and Orkut this a ratio of 38%, this, Facebook has received in the Indian market, more and more market share. For users who switched to Facebook, the most common reason is to follow friends, like Facebook Facebook interface design and more features. – Twitter Popularity in India the geometric growth in the Indian market all the Twitter users, about half (57%) of users are registered in the last year the site. There are about one-third (32%) of social media users in India at least once a day Twitter. – Network Products reviews the impact on users is also increasing in India, especially in consumer electronics products. Having read the comments of the Indian networking products, about 55% of users will comment on these networks to take purchasing decisions. Consumer durables and consumer electronics products are comments by the buyer to make decisions according to the largest network of products, with 64% of purchases are subject to this effect.

South Korean Internet users a higher degree of participation in social media: – From this point of view of population, social media, South Korea is the world’s one of the highest participation. In South Korea, Naver, as the country’s main social networking sites every month to attract 95% of Internet users in South Korea. – Social media users in Korea’s penetration rate has been high and the market continues to grow, for example, to May 2009 this year, Twitter’s growth rate only reached as much as 1900 percent, This growth was due to South Korea in June are general and universal application of mobile social networking and other factors. Australians flock to Web Forum: – Australia’s social media participation is a global leader in the Australian Internet users spend on social media on a monthly average time ranked No. 1 in the global average of more than seven hours per month. -

And unlike many countries, Australians pay more attention to maternal and interest in community sports sites, and view them as social media discussion of the main channel. In 2009, about 62% of Australian Internet users had visited a message board or forum. – LinkedIn is Australia’s fastest growing social networking Web sites, in July 2009 to May 2010, the independent user access to the site increased by 99% of the matter to. Nelson, director of the Asia-Pacific Network Business Megan – Cracken (Megan Clarken), said: “From the company’s chief marketing officer (CMO) and Chief Executive Officer of view, no doubt, the research shows that social media should be the broad business community concern. Because there are about three-quarters of global Internet users participate in social media in various forms, therefore, companies can not continue to ignore social media, but should take the initiative to intervene. “

Internet Differences in China, Japan, South Korea, and Australia is a post from: China Travel Trends

Operating margins were 37% in the second quarter, up from 34% in the same quarter last year. The improvement was mainly due to better leverage of expenses in product development and sales and marketing, partly offset by higher labor costs as the new call center in Nantong was put into use in the quarter. The company brought marketing expenses as a percentage of sales down to 15.4% in the quarter from 17.4% a year ago, but the firm said the decline was temporary and a result of the firm piggybacking on World Expo promotional activities funded by the government. As the firm diversifies its product offering and expands geographical coverage, we expect Ctrip to remain aggressive on marketing to strengthen its brand and bring in more customers.

The firm now expects revenue in the September quarter to be up 35%-40% from a year ago. As usual, we think the growth will be powered by strong hotel and air ticketing revenue. Well-entrenched in higher-end hotel booking market, Ctrip recently acquired significant stakes in several budget hotel chains and launched alliances for stand-alone budget hotels in over 20 cities as it sought more influence over hotel inventory supply and room rates. Although the shift in hotel mix will likely bring down the blended average price per room night for Ctrip, the volume increase should more than offset the price decline, in our opinion. Ctrip’s outlook in the air ticketing market is dependent on overall air travel volume, which in turn is a function of how well the Chinese economy performs. We believe Ctrip faces some headwinds in this market as leading airlines all look to cut commissions to agents and sell more tickets directly.

Source: The Star – August 12, 2010

Travel Demand Sends Ctrip Flying is a post from: China Travel Trends

A further 29 per cent of Chinese social media users are ‘commenters’ who react and comment on other people’s views. They are also the ‘accelerators’ of new ideas.

The largest group, comprising 45 per cent of social media users, are ‘gawkers’ who quietly browse, observe and look for entertaining ideas and brands that are already popular.

Chris Reitermann, president of OgilvyOne China and Ogilvy & Mather Group Shanghai said: “In China, social media users are generally highly engaged with brands. They see brands and the discussion of them as an integral part of their ‘social network’. With one in every four users ‘creating’ influence and waiting to be inspired, the economics of prioritizing and investing in the Initiators is more attractive than ever.”

A further highlight of the report is that social media users are no longer discriminating between ‘brands’ and ‘friends’. They are simply identifying a third group that they can engage with – what OgilvyOne calls ‘frands’. It found that 43 per cent of social media users are ‘friending’ brands, while 21 per cent are even marketing and sharing videos about brands or products.

Reitermann added that what matters in social media is “the power with which each engagement draws users in and inspires them to share with others.”

The survey was carried out over 71 social media sites across different categories. Over 5,000 social media users completed the survey. The full report can be download from this dedicated site.

Over the past 18 months much has been written about social media in China, about massive growth, new social media darlings and the massive number of users of these sites.  We have seen brands reaching out to bloggers and social media sites and creating campaigns in a social media environment.  Media dollars are shifting to social media sites and campaigns embrace social elements to connect with consumers.  In most cases, however, we largely see traditional marketing thinking about being transplanted into a social media environment.

Over the last three years, social media has gone from zero to internet hero.  And things are going to change.  Social media users are a new kind of consumer that instinctively incorporates brands and friends into their sharing communities.

Initiators, Commenters and Gawkers
26% of all social media users regularly start conversations.  They are content creators and they also publish their views and opinions. A further 29% are Commenters – people who may not initiate, but they do like to reach and comment on other people’s views.  And finally there are the Gawkers who prefer to browse and observe.

Social media users are no longer discriminating between ‘brands’ and ‘friends’.  They are simply identifying a third group they can engage with – ‘frands’.

Social media is no longer an experiment.  It has arrived as an important media category deserving of a major role in marketing plans targeting mainstream and leading consumers alike.  Social media is powerful because users are blurring the distinction between they relate to friends and brands, creating powerful new opportunities for brands to create uniquely close relationships with those how buy them

The era of consuming is over.  The era of sharing had begun in earnest.  Social media is the new mainstream.

Emergence of an active online sharing culture where 1 in 4 social media users ‘starts something’ has significant implications for brands

SHANGHAI, July 15 /PRNewswire/ – As the social media scene in China continues to attract mindboggling user numbers, ever increasing marketing dollars and new business ventures, an irreversible cultural shift has occurred. Modern Chinese society is now bound by a new sense of connectedness that has been enabled and inspired by the internet. At the same time a profound new spirit of ‘sharing’ has emerged as the essence of netizens’ online lives.

The “OgilvyOne Connected” research set out to unravel and reveal the fundamental changes that social media has had on how Chinese consumers connect with each other, how trust is built and how influence and word of mouth really travels.

SOME NETIZENS ARE MORE EQUAL THAN OTHERS

In the world of traditional offline marketing, a widely accepted practice is to focus on the 1-2% of consumers that are ‘fashion forward trendsetters’ in the anticipation that they will influence more consumers on the brand’s behalf.

But one of the most noteworthy and valuable findings of this research turns this notion on its head by demonstrating that in the ‘flatter’ world of social media, there is still a ‘cool group’ but it is much, much larger – comprising a whopping 26% of all Chinese social media users. These ‘Initiators‘ are the bold 1 in 4 social media users that regularly start conversations, create content and publish their views and opinions online. They are also the fertile starting point for new ideas, services and products.

A further 29% of Chinese social media users are ‘Commenters‘ – people who may not initiate, but who do react and comment on other people’s views. They are also the ‘accelerators’ of new ideas, giving them momentum and wider acceptance.

The largest group, comprising 45% of social media users, are ‘Gawkers‘ who quietly browse, observe and look for entertaining ideas and brands that are already popular.

According to Chris Reitermann, President of OgilvyOne China & Ogilvy & Mather Group Shanghai, “In China, social media users are generally highly engaged with brands. They see brands and the discussion of them as an integral part of their ‘social network’. And with one in every four users ‘creating’ influence and waiting to be inspired, the economics of prioritizing and investing in the Initiators is more attractive than ever.”

… AND THEY SHARE DIFFERENTLY

Just as there are different types of social media users, the study also uncovered the different ways in which users in China connect with one another and pass along information and ideas. These behaviors can be can classified broadly into either ‘spontaneous’ sharing such as chat – which is more popular among Gawkers (89% vs. 75% of Initiators) – or ‘planned’ sharing such as posting product videos or making NEW friends online – which is much more common among Initiators (24% vs. 13% of Gawkers).

The challenge for brands is to effectively inspire and engage all three types of social media user, and to avoid prioritizing one group ahead of another while aiming to inspire both spontaneous and planned sharing.

WANNA BE ‘FRANDS’?

Notably the study also found that the days of clear lines of delineation between one activity and ‘life part’ and another are over. In a social media environment the distinction between brands and friends is blurred. One manifestation of this is that social media users are no longer discriminating between ‘brands’ and ‘friends’. They are simply identifying a third group that they can engage with – ‘frands’ – a new term coined in the report.

And what are netizens doing with their frands online? 71% are watching commercials on video sharing sites such as Youku, 51% are downloading branded applications to their phones, while 43% are ‘friending’ brands. 21% are even making and sharing videos about products or brands. Only a minority of consumers (24%) say they don’t want to interact with their favorite brands online.

Finally, the data also shows that social media users are generally highly desirable ‘alpha’ consumers because 74% prefer to pay more for quality and unique experiences, and 48% say they trust advertising and are very open to being persuaded to make impulse purchases. Clearly, engaging social media users through relevant online methods is high ROI marketing.

Reitermann adds, “Brand exposure and engagement are two different animals. With traditional media, being larger, broader and more salient was always the goal. With social media, what matters is the power with which each engagement draws users in and inspires them to share with others.”

SO HOW DO WE DO THAT?

• Provide consumers with content that stimulates a debate or dialogue and tools that encourage sharing and commenting.
• Have different messaging strategies and more sophisticated content for Initiators and Commenters. Let Gawkers ‘listen in’ on the conversation.
• Invite participation through formal programs and campaigns, and informally through tone and manner. Bigger is not necessarily better.
• Measure brand engagement, not just reach.
• Treat consumers like friends and equals.

Social media is the new mainstream in China is a post from: China Travel Trends

The State Council has issued measures aimed at speeding up the development of China’s tourism industry. The government is looking to revitalize domestic tourism competition by introducing foreign tourism companies.

The government is about to loosen market access, break down industrial and regional market access, and streamline the administrative admission process. They are also vowing to push forward the transformation of domestic tourism businesses.

Shi Peihua, vice president of the China Tourism Academy, is one of the experts who helped draft the new policy.

Shi Peihua, Vice President of China Tourism Academy said “Integrating the industry is not purely about focusing on the industry itself. The policy places more emphasis on trans-sector integration. So it could form a comprehensive industry. That will be the future development trend.”

The new policy allows for foreign travel companies to enter the domestic market. Foreign invested travel agencies will gradually be allowed to run foreign tour businesses used by Chinese tourists.

Experts say the changes are likely to have an enormous impact on the domestic travel industry.

Shi Peihua said “This will be a huge shock to the domestic industry. Firstly, foreign companies will force domestic large enterprises to upgrade its competitiveness at international competition. Secondly, it will help smaller enterprises improve their services. And thirdly, the combination of domestic and foreign companies will give the market double advantage.”

Data from the Tourism Academy shows the tourism market in China has huge potential. The country will see over 54 million tourists travel abroad this year. That’s an increase of 11 percent compared with last year.

And huge profits are waiting to be made. Trade deficit of the industry is set to reach 5 billion U.S. dollars, and could hit 20 billion dollars in 2015.

Source: CNTV (July 29, 2010)

China opens tourism industry to foreign firms is a post from: China Travel Trends

According to the Vietnam National Administration of Tourism (VNAT), the number of Chinese tourists, after reaching a record high of 778,000 people in 2004, has decreased steadily over the last few years. In 2009, for example, only 528,000 Chinese people traveled to Vietnam, a decrease of 18 percent over 2008. However, the situation has improved in the first six months of this year, with the number of tourists from China increasing sharply by 92.5 percent (437,000 tourists).

Chinese tourists not only go through Vietnam’s northern border, but the number of travelers to the south has also increased. According to La Quoc Khanh, Deputy Director of the HCM City Department for Culture, Sports and Tourism, the growth rate of tourists from China is about 25 percent per year. Travel firms have also reported satisfactory growth in the number of Chinese travelers to Vietnam. Lien Bang Travelink, for example, said the number of tourists has increased by 30 percent since the beginning of the year.

Instead of only spending 3-4 days in Vietnam and primarily staying in northern provinces, Chinese travelers now spend more time in Vietnam and travel to the central and southern regions as well. Tu Quy Thanh, Director of Lien Bang Travelink, said there is a wide range of tourists to serve, from economy-class tourists to more free-spending, high-end tourists. Many Chinese tourists now spend more money than their Western counterparts. As for Lac Hong Voyages, the number of tourists has reportedly increased by 18-19 percent over the last two years. “We are targeting tourists who spend freely and go to Vietnam with passports. I think that this market has great potential,” said Lac Hong Director Tran Vinh Loc. VNAT General Director Nguyen Van Tuan said China remains the key market for Vietnam’s tourism industry in 2010. He believes that the market will see a strong recovery, allowing Vietnam to receive one million travelers this year, or double the number from last year. Strong advertising brings travelers in Explaining the high growth rate of Chinese tourists to Vietnam, Tuan said that good advertisements have brought tourists to Vietnam. Many of the advertising campaigns have been carried out in big cities in China, while travel firms and the tourism administration agencies of China and Vietnam have signed cooperation agreements.

VNAT said it is planning to broadcast a commercial to promote Vietnam as a beautiful travel destination on some Chinese TV channels. Thanh from Lien Bang Travellink recognized the prompt effect of advertising. He said that after Vietnam began advertising, Lien Bang Travelink noticed that more Chinese tourists began coming to Vietnam through the border gates in the north as well as taking more domestic flights to different places in Vietnam. Good service from air carriers has also helped increase the number of Chinese tourists to Vietnam. Vietnam Airlines is providing 30 flights a week on routes to Beijing, Guangzhou, Kunming, Shanghai, and Hong Kong.

What can be done to attract more tourists? Some people may think that it is easy to lure Chinese tourists thanks to the similarities in culture, close proximity, and convenient transportation options. However, experts say it will be difficult to obtain sustainable growth in the number of Chinese tourists coming to Vietnam. The language barrier is one of the biggest problems now. Travel firms now find it hard to find tour guides who can speak Chinese. Travel firms have also experienced difficulties in finding people who can work and negotiate directly with Chinese partners in Chinese. “Chinese businessmen usually use Chinese when discussing business,” Thanh explained. Then what advantages does Vietnam have to attract Chinese tourists? Vietnam cannot compare with Bangkok or Singapore in providing large shopping malls or high-end medical services. It does not provide as many cultural attractions as Indonesia, and Vietnam cannot compete with Japan when it comes to luxury products. However, according to Thanh, Vietnam still has its own advantages. Chinese people enjoy traveling to Hanoi and HCM City, two dynamic cities with unique cultures and histories. In the north, Hanoi and Ha Long Bay are usually the destinations tourists choose, while in the south, HCM City and its neighboring cities are the top choices.

Source: vnnnews.net

Vietnam trying to attract more Chinese tourists is a post from: China Travel Trends

The difference between South and North Korean visas is obvious. When the employee at Seoul Airport saw my North Korean visa, they asked excitedly if they could take a picture of it with their cellphone.

Getting a Foreign Visa for Chinese Citizens is a post from: China Travel Trends

Shan Phillips, Vice President,

On the streets of Guangzhou, Harbin and Shanghai, the mobile phone has become ubiquitous.  Once the domain of the elite, it now seems that just about everybody has one.  Widespread ownership of mobiles is only a fairly recent development in China, but consumers there have fully embraced the technology and in some ways are using it more robustly than their American and European counterparts.

For many people in China, the mobile Web is the only one they need. When they think of the Web, they don’t think of tethering themselves to a desktop PC and the accessories of mice, keyboards, mouse pads, printers and monitors. Not only do many homes in China not have (or need) landlines for voice communications, but also they don’t require hardwired Internet access for their fix of the Web. With mobile phones, everything they need is in the palm of their hand.

In a short amount of time, mobile consumers in China have surpassed their American counterparts when it comes to using the devices to access the Internet (38% of Chinese mobile subscribers compared to 27% of American mobile subscribers), despite less advanced networks.  Whether it’s kids in Beijing downloading games or adults in Shanghai requiring real-time information about the stock market and the ability to act on it on the go, the mobile Web is becoming an integral part of Chinese life.

To gauge where this important market stands – and where potential opportunities lie for retailers, device manufacturers, service providers and content producers – The Nielsen Company has just released its most recent Mobile Insights Report on China.  The report offers a glimpse into just how powerful the opportunity is to satisfy the needs of mobile Internet users in China.  These are just some of the highlights.

Who is Using Mobile Phones and What Are They Looking For?
Today, there are 755 million cell phone subscribers in China – more than half of the population. That makes China the world’s largest mobile device market.  That number will (of course) only rise as the populace becomes more affluent.  Nielsen found that the split between the sexes was almost equal: women comprised 49% of users while men made up 51%.  Adults aged 25-34 and 35-44 made up the largest percentage of users (23% each).

The majority of consumers (54%) used their devices for advanced data such as e-mail, gaming and music, while 36% used their phones for text/SMS and voice only (another 10% said they used their phones for calls only).

With the consolidation of the telecom market in China over the past year, three carriers now dominate the market. China Mobile is the clear leader with more than 70% market share, followed by China Unicom and China Telecom.

In terms of handset brands, Nokia dominates followed by Samsung and Motorola.   However, the real story is that the top international brands are losing share to local brands that have designed low cost phones with features that appeal to Chinese consumers, such as extra loud volume settings, funky shapes and designs and extra long battery life.  This trend has been accentuated by the government’s requirement that leading operator China Mobile deploy a 3G technology (TD-SCDMA) that is not used in other markets- forcing global device brands to make difficult choices about whether to develop devices for this new standard.

While price was the most important factor for consumers when considering buying a new device, we see increasing interest in device style and device features as well as considerable brand loyalty.

The average Chinese mobile user spent just over US$ 10 per month for their service (for context, US$500 is considered a good blue collar wage in China’s more prosperous urban areas) .  Men spent more than women, while consumers using their device primarily for business spent the most.   As youth 24-35 are the biggest data users, it is not surprising that they are the biggest spending age group as well.

How Are Chinese Using Their Mobile Phones?

Both pre- and post-paid subscribers used their devices for text messaging/SMS (87% and 80% respectively).  Games were the second most popular followed by the mobile Internet and are also more prevalent among post-paid subscribers.  Video services such as mobile TV, messaging and video calling were used by only a small percentage of users, largely due to network speed issues.  Once 3G expands, it is likely that these services will gain in popularity.

It’s perhaps not surprising that Chinese youth surf the net while on the go more than adults – they’ve grown up with the Internet.  Likewise, urban dwellers – with access to better network coverage – use their mobiles for Internet access more than their rural counterparts.

Market Opportunities
While almost 40% of Chinese phone users access the mobile Internet, they don’t use as many data intensive applications such as mobile video and content uploads.  There are a number of reasons for this: 3G launched just last year; penetration of smartphones such as the iPhone and Android is still low; the Mobile Application ecosystem remains fragmented, and social networking platforms are less developed.  However, as mobile penetration is just crossing 50%, China’s fixed phone line connections are decreasing as more users “cut the cord” and access to the Internet via computers is less prevalent than in the U.S. The demand for mobile devices and data will continue to expand, leading to many opportunities for service providers, device manufacturers, retailers and content providers.

China’s growth over the last decade has been extraordinary and shows few signs of abating any time soon.  As such, it’s only natural that Chinese consumers would wholeheartedly adopt technology and products that enable them to be productive – and stay connected – on the move.

China versus the U.S.: How usage differs
In China, the vast majority of mobile consumers (87%) use pre-paid plans.  In the U.S., less than 20% of mobile consumers use them, as most Americans prefer subscribing to post-paid plans.  Even though Chinese have less 3G network coverage and own fewer smartphones, they tend to use their mobile phones to access the Internet while on the go more than Americans (38% vs. 27%).  Chinese also texted (86% vs. 64%), and instant messaged (23% vs. 16%) more often.  Meanwhile, Americans used their mobile devices more than Chinese for e-mail (25% vs. 8%) and picture messaging (37% vs. 22%).

Because 3G development in the U.S. is widespread, Americans used bandwidth-intensive applications such as content uploads, video messaging and mobile video more than Chinese.  Americans also visited a wider variety of sites, although health/fitness, education/employment and automotive sites were more popular in China than in the U.S.

Nielsen’s Mobile Insights Report on China is based on face-to-face surveys with 4,946 consumers age 15 and up in 19 cities around China.  The interviews were conducted in March 2010.

Source: Nielsen (august 4, 2010)

Mobile Internet More Popular in China than in U.S. is a post from: China Travel Trends