China's online travel market booming

(AFP /LIU Jin)

China's online tourism market is booming as an increasingly wealthy middle class travels for pleasure and the use of credit cards and the Internet soars, analysts say.

As millions of people pack their bags for Lunar New Year holidays, the busiest travel period of the year, many will have booked their trips home online, according to Chinese Internet research and consulting firm iResearch.

Revenue from online flight, hotel and package tour bookings will hit 4.75 billion yuan (695.8 million dollars) in 2010, up 27 percent from last year, iResearch says, with that figure due to balloon to 9.01 billion yuan by 2013.

"People's lifestyle attitudes have changed and their spending ability has improved and people now view holidays as part of a healthy lifestyle," the firm said in its latest report on the fast-growing sector.

China's travel industry generated 1.3 trillion yuan in revenue in 2009, up nine percent from 2008, state media reported earlier this month, citing figures from the National Tourism Administration.

While a separate figure on overall bookings revenue was not available, China Market Research Group senior analyst Ben Cavender estimated online bookings accounted for 8-10 percent of the market.

"More and more consumers are turning to the Internet to book trips," Cavender told AFP, adding he expects online bookings to make up 15-16 percent of the total within two years.

"Consumers are becoming more and more comfortable with the concept of online purchases... and the use of credit cards has exploded over the last few years," Cavender said.

China has at least 384 million Internet users, according to official figures, more than any other country in the world and the number of credit cards issued has ballooned.

As the nation's 1.3 billion people become wealthier - urban and rural per capita income each rose more than eight percent in 2009 - more and more Chinese are taking holidays.

In 2009, the number of domestic tourist trips rose 11 percent to 1.9 billion from a year earlier, state media reported, citing tourism bureau figures, indicating some people went on more than one holiday during the year.

The number of overseas tourist trips increased 3.6 percent to 47.5 million compared with 2008, according to the report.

This year is expected to be even better for the domestic tourism market with the World Expo in Shanghai expected to draw at least 70 million visitors, most of them Chinese, said Royal Bank of Scotland analyst Wendy Huang.

"Travel consumption per capita should increase over the next three years, said the Hong Kong-based Huang.

"I think 2010 will be an especially good year for the travel industry because you have the Shanghai Expo and it should benefit travel demand in China."

Cavender said young professionals between the ages of 24 and 35 living in Beijing and Shanghai were driving demand for flights, hotel rooms and package tours.

"They are by far the most optimistic consumer segment... they are also the ones most comfortable with alternative forms of payment like credit cards," he said.