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Part 2 - Tourism-Special

Chinese tourism in Germany: economic factor with great potential

In Germany guests from China (incl. Hong Kong) are with 1.7 million stays (2013) already the biggest group of tourists from Asia. Momentarily, China is in comparison with other countries still in 13th position. The German Tourism Board is though already predicting 2.2 million stays for 2020.

Not only do many Chinese come to Germany but they also spend a lot of money in the country – clearly more than tourists from other nations. Meanwhile China is in international cross-country comparison the leader for tax free purchases in Germany. On average a Chinese tourist spends 610 Euros tax-free in Germany. So, the Chinese are ahead of the Russians and have a 32 percent share of the total German tax-free sales. The top position can be explained by the consumer behaviour of Chinese travellers: 60 percent of the travel budget is spent on purchases – globally the highest share.

Consequently, next to the hotel and hospitality sector German retail benefits the most from Chinese visitors. Especially German brand products that have an outstanding reputation in China for their quality are highly sought after. 

Whether watches from A. Lange & Söhne and Glashütte, clothing and leather goods from Hugo Boss, suitcases from Rimowa or household goods from WMFKPMFisslerand Zwilling – high-price German traditional brands are able to particularly score not least as these are cheaper in Germany than if bought in China. With improved service offers in shops like e.g. Chinese-speaking sales assistants or Chinese signs many traders have already adapted to the growing customer numbers. Frankfurt Airport made the headlines in 2012 when they employed a “Chinese Personal Shopper”.

Certain regions in Germany particularly benefit from the inflow of Chinese tourists. In 2013 Frankfurt was the number 1 shopping destination with nearly 100,000 Chinese visitors. 38 percent of the sales that Chinese tourists bring to German trade are generated in Frankfurt. In no other German city do Chinese spend more money – on average 900 Euros. Munich, Berlin and Cologne follow respectively.Berlin, Potsdam, Dresden, Bamberg, Nurnberg, Neuschwanstein, Zugspitze, Munich, Metzingen, Stuttgart, Heidelberg, Cologne and Frankfurt in eleven days – this is how a popular travel route of Chinese Germany tourists looks like. 

At the end of such a trip a travel group of ten from China will have spent 50,000 Euros – just for shopping. The potential of Chinese visitor streams for German retail as well as the hotel and hospitality industry is undoubtedly great. Furthermore, the additional revenues resulting from the inflow of Chinese tourists has the potential of creating new jobs, especially in the tourism sector. But will the trend continue? In the second quarter of 2014 the spending of Chinese tourists fell for the first time. The sales also fell in Berlin. One of the reasons for this development is the current anti-corruption campaign in China that has curtailed the buying desire of the Chinese. The other reason is a new tourism law in China that prohibits Chinese travel agencies only offering promotional trips where tourists hardly see anything else than shopping centres when abroad. Presently it is difficult to predict what impact the anti-corruption campaign and tourism law will have on the buying patterns. Up to now the effect has been selective but by no means dramatic. 

The race for Chinese tourists has opened – In European comparison Germany doesn’t perform particularly well

Whilst in international comparison Europe is the preferred choice for Chinese travellers the competition between European countries is fierce. Measured against entry figures from 2011 and 2013 France and Italy have overtaken Germany as most popular destination for Chinese tourists. According to data from the China National Tourism Administration in 2013 in total 415,000 Chinese from China entered Schengen states via Germany. The figures are growing in real terms – so Germany is benefitting from the global boom of Chinese foreign tourism – but the numbers are not rising as much compared with other EU countries. 

Whilst French visa centres in China recorded growth rates of more than 50 percent compared with the same period of the previous year German visa centres only registered a rise of 10 percent which was significantly lower.

The comparison of entries from China to Germany (415,000) with overnight stays of Chinese in Germany (1.7 million) leads to the assumption that many Chinese tourists don’t directly enter the country but make use of the freedom to travel within the Schengen area and enter via another country then coming to Germany. This may not be an obstacle for Chinese who are travelling to Europe for the first time and frequently visit several countries. But with the expected increase of individual tourism the time spent on dealing with entry issues could have an impact on the decision for or against a travel destination.

French and Italian visa centres in China are mainly processing tourist visas whereas German visa sections predominantly issue visas for business travellers. In that one could see a distinguishing feature for Germany that could be developed into a competitive advantage as business travellers and investors from China provide a great economic potential for Germany. But according to DIHK the actual ratio between holiday and business trips of Chinese in Germany is exactly the opposite: 68 percent are holiday trips whilst only 27 percent are business trips. That is a clear indication that the direct entry to Germany is more difficult compared with other states of the Schengen area. 

 

Go back to part one.

Continue to part three.

The  Mercator Institute for China Studies (MERICS)is a Stiftung Mercatorinitiative. Established in 2013, MERICS is a Berlin-based institute for contemporary and practical research into China.

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