What accounts for the sharp growth in China's tourism sectors?
What accounts for the sharp growth in China's tourism sectors?
Scaling Maslow's hierarchy of needs
Developing economies tend to follow a form of Maslow’s hierarchy of needs:
Poor economies are poor because they are not productive. As such, they tend to allocate scarce resources to fundamental needs at the bottom of the hierarchy — things like food, shelter and safety.
As economies learn how to become more productive, they are able to satisfy needs at the bottom of the pyramid and start to advance to higher-level needs. For example, at the top of the pyramid “self-actualization” represents psychological concepts like “self-discovery, self-reflection, self-realization and self-exploration”.
Leisure travel fits these concepts to a tee: People travel to connect, learn, explore, broaden their perspectives, discover etc.
Chinese people were no different. When the country was poor, most people were too focused on surviving to care about leisure travel. But as the economy became more productive, household incomes rose and the focus shifted from survival to higher-level needs.
In the beginning, leisure travel was almost purely domestic. Later, as disposable incomes continued to rise, they started travelling outside the country — first to “easier” destinations like Hong Kong and later to regional destinations in Southeast Asia and South Korea. Today, Chinese tourists can be found anywhere you can found those ubiquitous green TripAdvisor badges.
Like many things in China, this happened in a very short period of time. I lived in Hong Kong from 2001 to 2004 and I still remember when the Individual Visit Scheme (IVS) began in Hong Kong in July 2003. In the wake of this new scheme, which allowed individuals to obtain travel visas, mainland Chinese tourism to Hong Kong exploded.
This presaged similar trends in other tourist destinations in the ensuing years. Today, I live in Lower Manhattan and bear witness to this global trend on a daily basis.
The sharp growth in outbound Chinese tourism is a function of the country reaching a certain level of economic development whereby a large chunk of the population can afford it. This is the same phenomenon that drove the rise of American tourists in the 50s and Japanese tourists in the 70s. The one difference, of course, is China’s massive population — leading to outsize impact in nearly every industry it touches, including tourism.
This was originally published on Quora in January 2019.