PHILIPPINE
MARKETING
PLAN FOR
CHINA
Outline of Presentation

Background on China

Outbound Travel from China
– 10-year Chinese Outbound Travel Market
– China Outbound vis-à-vis East Asian Countries
– Destinations of Chinese Tourists
– Travel Preferences
 Arrangements
 Sources of Information
– Profile of Outbound Chinese Traveler
 Demographic Profile
 Travel Profile
– Growth trend
– Factors fueling outbound travel growth

Chinese Tourists to the Philippines
– 10-year Visitor Arrivals from China
– Profile of Chinese Visitors
– Flight frequencies between the Philippines and China
Outline of Presentation

Competitive Analysis
– Arrivals from China to ASEAN Countries
– Air Seats Capacity between China and ASEAN Countries
– Comparative Profile of Chinese Visitors in the Philippines and
Thailand
– Tour Products and Packages
– Marketing Strategy and Tools

Issues and Action Plan

Philippine Tourism Marketing Plan for China
– Objectives
– Strategies
– Marketing Tools
– Work and Financial Plans
– Communication Plan
– Monitoring and Evaluation
Background
Demographic

Population
– 1.298 Billion as of July 2004
– 15 – 64 years account for 70% of the population
– 56 ethnic groups with the Han as the largest group accounting
for approximately 91% of the population

Mandarin is the standard dialect widely spoken and understood with
Cantonese commonly used in the province of Guangdong

Fourth largest country in the world with 9.3 million sq. km. land
area

23 provinces, 5 autonomous regions and 4 municipalities

Major business centers are Beijing, Shanghai, and Guangzhou
Economic Growth
Gross Domestic Product (%)
GDP per capita
Current Price in Yuan
Current Price in US$
%
1999
2000
2001
2002
2003
7.1
8.0
7.3
7.0
7.4
6,551
789
6.2
7,086
853
7.3
7,651
921
6.8
8,214
990
6.5
9,073
1,093
6.9
Source: Asian Development Bank Outlook 2003 Report
Family Income and Outbound
Travel Plans
Family Monthly
One Journey
Two Journeys
Three Journeys
Income
Less than US$ 180
25%
US$ 180 – US$ 360
55%
2%
US$ 361 – US$ 550
70%
9%
More than US$ 550
34%
58%
Source: SSIC 2000: Survey of Five Cities
3%
Outbound
Travel from
China
Top Tourist Destinations, 2003
France
Spain
United States
Italy
China
United Kingdom
Austria
Mexico
Germany
Canada
Visitor Volume
Visitor Receipts
( in Million)
(in US$ Billion)
75.0
52.5
40.4
39.6
33.0
24.8
19.1
18.7
18.4
17.5
36.6
41.7
65.1
31.2
17.4
19.4
13.6
n/a
19.1
n/a
Chinese Outbound Travel
(in Thousand)
25,000
20,200
20,000
16,602
15,000
12,133
10,472
10,000
9,066
8,426
8,170
6,230
4,520
5,000
3,730 3,740
0
2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993
Growth Rate
21%
37%
16%
13%
7%
3%
32%
38%
21% (.002%)
China Outbound Travel vs. Outbound
Travel from East Asia (2003)
Country
China
Japan
Korea
Taiwan
Hong Kong
Volume
20,200,000
13,296,330
7,086,323
5,923,072
8,380,467*
*exclude outbound to Mainland China
China Outbound Market

Total Outbound to Asia in 2002 –
14,271,519 (which includes outbound
travel to Special Administrative Regions)

By 2020, WTO predicts China will have
more than 100 million outbound travelers
Source: WTO Report
Destinations of Chinese Tourists
Destinations
Hong Kong SAR
Macao SAR
Thailand
Vietnam
Russia
Republic of Korea
Malaysia
Japan
Australia
2001
2000
Growth Rate
4,448,583
3,005,733
695,372
672,372
606,102
482,308
453,206
391,384
171,900
4,142,191
1,644,421
707,456
n/a
n/a
400,958
n/a
595,660
126,852
7%
82%
(1%)
n/a
n/a
20%
n/a
(34%)
36%
Preferences of Chinese
Travelers

Extremely price – conscious
–
–
–
–
Price is a major consideration
Tour cost has to be cheap
Mass market and not high-end nor deluxe
No optional tours but would not mind paying extra to go
shopping or take part in activities not included in the package.
Extra cost must not be too high
– 3-star accommodation
– Demand compliance with tour description

Information in Chinese language
– Word-of-mouth communication from friends and relatives is still
an important information source
Preferences of Chinese
Travelers

Multi/Single-destination tied with varied
interesting spots
– Beautiful scenery
– Shop authentic but cheap souvenirs for
neighbors, colleagues, etc.
– Relaxation, knowledge and experience
different culture
– Taste different food
– Give status in the community
Sources of Information
Travel Agents
Books/ Newspapers/ TV
Word of Mouth
Brochures/ Flyers
Internet
Source: PATA China Outbound Travel Study, 1994
38%
33%
18%
7%
2%
Travel Arrangements for Pleasure Travelers
Other, 7%
Parent
Company, 9%
Travel
Agency, 33%
Own
Employer, 9%
SemiIndependent
TA, 10%
Source: PATA China Outbound Travel Study, 1994
Personal, 29%
Readership of Different Types of Magazines
Type of Magazine
Major news magazines
Digest magazines
General interest magazines
Film/TV magazines
Travel magazines
Professional magazines
Sports magazines
Source: PATA China Outbound Travel Study, 1994
Pleasure Traveler
50%
44%
44%
34%
24%
24%
22%
Business Traveler
61%
46%
35%
18%
13%
45%
27%
Demographic Profile of Chinese Traveler
Sex
Age
Male
Female
71%
29%
30 or younger
31 – 50
51 and older
27%
49%
22%
Education
No higher education 20%
Less than4 years
27%
4 years and more
52%
Source: PATA China Outbound Travel Study, 1994
Position
Top/Senior
Middle-level
Other
33%
50%
15%
Monthly household income
Less than1600 yuan 30%
1601 – 2400 yuan
32%
More than 2401 yuan 34%
Marital Status
Married
Non-married
78%
20%
Travel Profile of Chinese Tourist
Purpose of Visit
Business (64%)
Visiting partners
Conventions
Exchange tours
Sports/ Cultural
Others
24%
12%
10%
2%
13%
Pleasure (39%)
Sightseeing
Visiting relatives
Visiting friends
Sports/ Cultural
19%
16%
2%
2%
Source: PATA China Outbound Travel Study, 1994
Frequency of travel
1 trip
2 trips
3 or more trips
59%
19%
20%
Length of most recent trips
One week or less
19%
8 to 21 days
54%
More than three weeks
26%
Traveled
Alone
With others (78%)
Delegation
Company Trip
Package Tour
Spouse/Children
21%
16%
40%
14%
6%
Most Popular Items Chinese Buy When
Traveling Abroad
Items
Food/ candy/ chocolate
Liquor/ Tabaco
Women’s clothing
Souvenir
Men’s clothing
Jewelry
Electronics
Leather goods
Source: PATA China Outbound Travel Study, 1994
Pleasure Traveler
57%
34%
36%
30%
31%
25%
18%
17%
Business Traveler
50%
36%
17%
20%
17%
19%
20%
12%
Market Segment
Business Purpose
1992
2000
59%
46%
Source: PATA China Outbound Travel Study, 1994
Pleasure Purpose
41%
54%
Chinese Travel Outlook
Type of travelers
Pleasure
Business (46%)
Economic
Non-economic
54%
48%
40%
Frequency of travel
Once
Twice
Frequent
38%
46%
70%
City
Beijing
Shanghai
Guangzhou
61%
39%
38%
Source: PATA China Outbound Travel Study, 1994
Place of work
Foreign-invested/foreign
owned enterprises 51%
State enterprises
48%
Academic/ research 48%
Government
41%
Other non-profit orgs 33%
Have relatives living abroad
Yes
48%
No
26%
Major Sources of Outbound Travel
Beijing
(Peking)
Population
Urban Population
(Guangzhou)
Per Capita Income
Places of interests
Shops
Historical sites
Theme parks
Museums
Casino/ Bar
13 M
4.7 M
Shanghai
Guangdong
16 M
7.5 M
72.70 M
2.6 M
US$ 13,471
US$ 13,602
US$ 2,029
Capital of
China
Industrial/
Financial/
Commercial
Center
83%
65%
46%
41%
13%
85%
75%
45%
35%
9%
Political/Economic
Technological/
Cultural Center
93%
66%
58%
41%
15%
Chinese Travel Outlook

Rising rapidly and will be first tourist source nation by
2020

Major visitor-generating market for ASEAN destinations

7th largest tourism spender in the world

Global trend for short - haul travel

Workers enjoy seven-day holidays on May 1 (International Workers
Day) and October (National Day) for a total of 14 days yearly
Factors Fuelling Outbound Travel Growth

Growing gross national income which is number six
(6) in the world

Growing disposable income with household savings
in urban and rural areas exceeding 10 trillion RMB.
GDP per capita is expected to reach US$ 1,000

Shifting consumption pattern from dressing warmly
and eating one’s fill, to living a well-off life
Factors Fuelling Outbound Travel Growth

Outbound travel restriction are being relaxed
– Exit clearance has been lifted since 01 February 2002,
However, Chinese traveling abroad must obtain or hold a
valid visa issued by a foreign government before they
are allowed to exit China
– Chinese tourists can take between US$ 3,000 – US$
5,000 on a trip abroad
– Outbound tourists can also buy foreign currency
themselves rather than thru travel agency
– More travel agencies are being allowed to operate
outbound tours

Simplification of passport application procedures
Factors Fuelling Outbound Travel Growth

Improving air capacity infrastructure. By 2019, China is
projected to have 22,000 passenger airplanes which is
more than 10 times the world’s total

Increasing number of destinations being granted ADS from
4 in 1992 (Thailand, Malaysia, Singapore and Philippines) to
73 in September 2004

Outbound tour is no longer a once-in-a-lifetime event.
Repeat outbound travel is becoming common.

Middle-class families are becoming main force. Middleaged travelers and educated young adults with high
incomes comprise a big proportion of outbound tourists
List of ADS Countries
Year
Countries
1983
Hong Kong, Macau
1988
Thailand
1990
Singapore, Malaysia
1992
Philippines
1999
Australia, New Zealand, Republic of Korea
2000
Japan, Vietnam, Cambodia, Myanmar, Brunei
2002
Nepal, Indonesia, Malta, Turkey, Egypt
2003
Germany, India, Maldives, Sri Lanka, South Africa
Croatia, Hungary, Pakistan, Cuba
2004
Austria, Belgium, Cyprus, Denmark, Estonia, Finland
France, Greece, Italy, Latvia, Lithuania, Luxembourg
Netherlands, Poland, Portugal, Ireland, Slovakia,
Slovenia, Spain, Sweden, Norway, Iceland,
Switzerland, Liechtenstein, Romania, Zimbabwe,
Brazil, Tanzania, Russia, Ethiopia
Chinese Passport and Visa

Before
– Chinese citizens wishing to travel overseas need to
apply for a passport which is valid only for the
journey applied
– Invitation from foreign country is required
– For ADS countries, invitation is not required but the
number of Chinese citizens visiting said countries is
established through “quota system” for authorized
travel agents only allowed to sell outbound tours
– Exit clearance is required
Chinese Passport and Visa

After
– July 2000: Chinese citizens can obtain passport
without an invitation letter from foreign country but
requirement to obtain “permission” /exit permit or
visa for each journey remains
– February 2002: Exit clearance has been lifted,
however, valid visa from foreign country to be visited
must be secured before Chinese tourists are allowed
to exit China
Chinese
Tourists to the
Philippines
Arrivals from China to the Philippines
1993 - 2003
35000
32,039
30000
27,803
24,252
25000
21,220
19,093
20000
18,937
15,757
14,724
15000
10000
9,259
7,011
8,606
5000
0
% increase/
decrease
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
32%
Source: A/D Cards
-7%
83%
21%
27%
-13%
-31%
29%
47%
15.2%
Profile of Visitors from China to the
Philippines, 2003
Sex
Age
Male
Female
61.61%
33.45%
25 – 34 years old
35 – 44 years old
45 – 54 years old
25.22%
31.51%
17.37%
Occupation
Professional/ Managerial/
Administrative
Clerical/ Sales Services
Housewife
Student/ Minor
Not Stated
24.57%
1.23%
4.54%
4.51%
60.09%
Purpose of Visit
Holiday
Business
VFR
Convention
Official Mission
Not Stated
40.69%
8.83%
8.21%
1.19%
0.26%
37.52%
Activities
Shopping
Sightseeing
Sports
Conference
Others
Beach Holiday
Incentive Travel
94.80%
10.30%
1.90%
1.30%
1.30%
0.60%
0.60%
Profile of Visitors from China to the
Philippines, 2003
Type of Accommodation
Hotel
16.07%
Apartel/ Rented Homes
3.76%
Homes of Relatives/ Friends 5.63%
Not Stated
74.55%
Travel Arrangements
Package
Independent
Not Stated
32.27%
17.86%
49.87%
Frequency of Visit
First Visit
Repeat Visit
Not Stated
32.92%
20.79%
46.29%
Average Daily Expenditure (in US$)
Accommodation
20.06
Shopping
11.35
Food/ Beverage
9.72
Local Transport
3.19
Entertainment/ Recreation 2.93
Guided Tour
0.19
Miscellaneous
8.77
US$ 56.21
Average Length of Stay
11.10 nights
Visitor Receipts
US$ 19,900 M
Profile of Visitors from China to the
Philippines, 2003
Things like most about the Philippines
Warm, hospitable and
kind people
Beautiful scenery/ nice
beaches
Good climate
Good food/ liquor/
fruits
37.60%
20.70%
14.10%
8.50
Things dislike most about the Philippines
Heavy traffic
36.20%
Air/ water pollution/ dirty
environment/ bad roads 32.10%
Crime incidents/ poor
peace and order
23.30%
Widespread poverty
beggars
4.80%
Cheating, reckless/
dishonest taxi drivers
2.60%
Flight Frequencies between Philippines and China
(as of October 2004)
Entitlements
624,000
Utilized entitlements
214,084

China Southern Airline (96,252)
> Peking (Beijing) – Xiamen – Manila (Daily)
> Canton (Guangzhou) – Laoag (Wed, Fri, Sun)
> Shanghai – Laoag (Fri, Sun)

Philippines Airlines (117,832)
> Shanghai - Manila (Daily)
> Xiamen - Manila (4 times)

Cebu Pacific (38,688)
> Canton (Guangzhou) – Subic – Manila (Fri, Sun)
> Manila – Xiamen (Sun)
Based on CAB Summer Schedule
Visas Issued by Philippine Consulate General
January – September 2004
Type of Visa
Beijing
Pleasure
Individuals
Tour groups
Business
Official
Crew members
Student
Total
Shanghai
Total
4,597
2,399
1,523
6
96
1
4,836
8,622
13,458
Strengths, Weaknesses, Opportunities and
Threats (SWOT) of the Philippines as a
destination
for Chinese
tourists
Weaknesses
Strengths
- natural scenery (beaches, etc.)
- friendly to Chinese (Chinese
heritage of Filipinos)
- different culture
- variety of seafood (for southern
Chinese) and sunny island
resorts (for northerners)
- proximity to China
- English-language facility
- lack of information on Philippine
destinations (consumers and tour
operators)
- pricing (high price and not one
price)
- negative image re: security
problems
- no variety in tour offerings
- lack of infrastructure development
- lack of professional Mandarinspeaking tour guides
- aside from Manila, no direct flights
from China to Cebu and Davao
- fragmented private sector
Strengths, Weaknesses, Opportunities and
Threats (SWOT) of the Philippines as a
destination
for Chinese Threats
tourists
Opportunities
- compared to Bali and Phuket,
several Chinese tour operators
prefer Boracay
- More countries granted Approved
Destination Status (ADS) as of 2003
especially in Europe
- China is a seller’s market, so with
enough local advertising and
information to operators and
consumers , Philippine tour
packages can be pushed more
- terrorism and security problems
- China is used to charters
- good relationship established
between DOT and CNTA and local
officials
- large portion of outbound market
are first-timers out of China
- Future events in China require
them to learn English fast (i.e.,
2008 Olympics)
- aggressive marketing and sufficient
budget
Approved Destination Status (ADS)
According to the China National Tourism Administration (CNTA),
several countries who have been granted ADS , have not been
successful in getting substantial share of the Chinese outbound
market due to :
– no advertising for tour offerings in publications of travel agencies
– high price is a major obstacle
– no brochures and lack of communications making it difficult for Chinese
travel agencies to promote new destinations
– more professional tour guides required
COMPETITORS’ PACKAGES

Thailand
- Beijing-Phuket, 6 days – 5
nites, with airfare
3980 RMB or $ 485.
- Beijing-Bangkok-Pattaya (full
board), 6 days-5 nites, 4480
RMB or $ 545 or $691 during
high season (May and Oct)
• Thailand spent $200,000 in
advertising in China during 1st
year of operation

Philippines
- Beijing-Manila-Cebu, 6
days-5 nites, 5980 RMB
or $ 728.
MAP OF ASIA
China
Vietnam
Singapore
Thailand
Indonesia
Malaysia
Philippines