Journal of Tourism & Hospitality
Open Access

China: Investing and Touristing in Europe

Klodiana Gorica^{* *}Correspondence: Klodiana Gorica, Tourism and Entrepreneurial Marketing, Faculty of Economy, University of Tirana, Albania, Tel: +355692206923, Email:

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Introduction

The developments that China has been having in the last decade have directly affected the technology and infrastructure of the respective continents worldwide, from the USA, Europe and beyond. The presence of Chinese investments has certainly influenced not only in the structure and the type of the investment, but has also deepened the need for strategic investment in specific sectors such as tourism. So:

A. Historically, tourism sector has been important in Europe, but because of the economical rise of China and also the “boom” of the Chinese tourist in Europe, it is estimated that soon the tourism in Europe will be followed by further changes.

B. On the other hand, the presence of Chinese investment in Europe will include even tourism industry. Here it is important to underline the feature that the tourism industry has, due to its heterogeneity, covers many sectors, ranging from accommodation (hotels, guest houses, etc.) and transport to many other sectors, where it affects at least indirectly (agriculture, livestock, handicrafts, artisans, handmade products) etc.

Within Europe, international institutions such as the UNWTO, the GSTC, for at least 30 years, have done a very good job of orienting nations and destinations towards sustainable development. Therefore, in front of this “boom”, it is important to keep in mind the principals, as a challenge of sustainable development with all Chinese investments.

These two approaches: first, the Chinese boom in tourism investment (Chinese as investors) and second, the Chinese boom in tourism growth (Chinese as tourism) will be considered in the following analysis. In fact should be taken into consideration a whole evolution of what is happening and what has changed tourism in Europe, which is related to the rapid evolution of tourism, starting from, the way of traveling, the most important forms and products of tourism, etc. The main part will include the qualitative analysis of China's approach to Europe as it is described above, in both sides, and this analyze will allow to take some consideration while investing in tourism in Europe in order while serving to tourist Chinese achieving sustainable tourism in Europe, and also to underline some pre requirements for countries that host Chinese investments, everywhere china is presenting as investitors in order also to keep in mind the “our homework” in sustaining sustainability in Europe.

Literature Review

Chinese tourism have created a storm across the global travel industry. The reasons are simple, we face this rapid urbanization, higher disposable incomes and fewer restrictions on travel are allowing more and more Chinese travelers to explore more. The collaboration that ETC and EU-Chinese Tourism Year was as a way of promoting destinations and improving the tourism experience by increasing the number of Schengen visas issued.

Chinese investment was spread more evenly across a greater variety of sectors. With fewer mega deals Chinese capital was spread more evenly across sectors compared to 2016 and 2017. Investment declined in transport, utilities and infrastructure, and real estate. The biggest increases were recorded in financial services, health and biotech, consumer products and services, and automotive [1]. So, it is crucial to consider further strategic investment of Chinese in Europe especially in transport and infrastructure that indirectly will impact on tourism offer.

According to China Daily, Chinese tourist peak in making Europe their primary destination it was in the middle of 2019, statistics taken by the Chinese Tourism Academy. Their collected data showed that in the first six months of 2019, Chinese travelers made almost 3 million visits to European countries, up to 7.4 % year-on-year. One of the reasons stated by this study is that there are “tailor-made tour” packages, which are customized in accordance with travelers [2,3].

The new framework allows the European Commission to issue opinions on transactions that concern multiple member states or target a project or program affecting the interests of the EU as a whole. Those opinions are not binding, though in cases affecting the EU as a whole member states would be required to justify their decision not to follow the Commission’s opinion. Moreover, the new EU framework still restricts screening to “security and public order” concerns and does not extend reviews to include economic criteria or a “net benefit test” (which some other OECD countries do) [1].

Based on a report of European Travel Commission (ETC) it is stated that even though in Chinese economy it is a slow growth still they travel a lot by having always Europe as their primary destination. The growth of Chinese travelers has been solid, by judging of the data of their bookings it can be said the EU will continue to increase its share of valuable market.

Based on a report of European Travel Commission (ETC) it is stated that even though in Chinese economy it is a slow growth still they travel a lot by having always Europe as their primary destination. The growth of Chinese travelers has been solid, by judging of the data of their bookings it can be said the EU will continue to increase its share of valuable market.

Even for European countries that are related with China as tourist destinations for Chinese segments of visitors, even for those that welcome tourism investments from China, some analyses must be underline in order to better understand and evaluate/measurement the impact and models of development with the main aim of achieving and sustaining sustainable tourism in Europe while Chinese are considering as touristing or as investitors.

What is crucial to consider is relate to the fact that Europe can orient strategic investment of China in our continent through rules, policies, strategies and further orientation that need to be consider from Europe decision makers to Chinese investment [6].

The new EU investment screening framework could particularly impact Chinese investors. The EU regulation encourages member states to specifically review state supported investments in sensitive technologies and critical infrastructure. These criteria could cover a large share of Chinese Merger & Acquisitions (M&A) activities in Europe [7]. We estimate that 82 percent of Chinese M&A transactions in Europe in 2018 would fall under at least one of those criteria. Broader scrutiny of Chinese commercial presence in Europe will impact Chinese investors. More complex regulations for inbound investments are probably only the first step in a broader overhaul of Europe’s policy toward trade and investment with China. Current debates indicate that some European leaders would like/are considering reforms in other areas as well, including export controls for dual use and critical technologies, data security and privacy rules, procurement rules and competition policy. European convergence with efforts in other Organization for Economic Co-operation and Development (OECD) economies would pose additional challenges for Chinese investors in Europe [1].

Methodology

This article is based on the pure observation on what is currently happening in the Europe, based on some concrete cases and also reports. It is important to underline that this study is conducted based on the ideas that the researcher had which later on are proved. Which means, that this study primary resources of data are its own observation and belief regarding this topic. The secondary data role was to support researcher’s goal [8-10].

European Tourism and the New Trends

What has really changed within Europe, during the decades, regard to the tourism industry is related mainly with: the concept of destination, new the era of making tourism, the element that take attention while consuming the recourses etc.

So, the concept of destination within Europe is also shifting from geography and territory concept in a “new Europe” and sustainable tourism destinations, which is based on networking and communities. There is a new era of making tourism and traveling in different ways/patterns, which causes Europe, but even the whole world, to move from “sun and sea tourism concept” to alternative forms of it, based on: culture, nature, heritage, lifestyle and ecosystems. This means that, expanding the tourism market will increase pressure on biodiversity and the ecosystems on which the livelihoods of so many people and local communities depend. Despite this, the area will and should focus on massive tourism (sun and sea) since the potentials exists and has created revenues [11,12].

Unplanned tourism management has already caused destinations to face saturation problems. The challenge of reevaluating their developmental goals and patterns is very urgent. Nations, regions, and local areas should find ways to confront with this challenge. One way for measuring and ensuring sustainability patterns in tourism is through the use of indicators; or adapting new models of destinations (above); also, to use the right packages of knowledge, skills and capabilities that are needed for tourism to be managed in the right way towards sustainability [13].

Sustainability as main challenge objective in Europe

Sustainability is the keyword of all these decades. It is not a new way of development, or management or thinking ahead. It is a challenge and a philosophy. We cannot define a good development if we are based only on figures and economic data, but especially if we achieve social welfare and environment protection. Therefore, nations need to find ways to achieve sustainability and to do so; they have to rely on those industries that can realize three dimensions of sustainability in the same time [14].

Education is a strong strategy which leads on that way, agriculture, farming, etc., but we are not used to hear sustainable education or sustainable agriculture and so on. Furthermore, the term that we are used to hear is “Sustainable Tourism”. Tourism is the best long-term strategy to achieve sustainable development (Figure 1).

Figure 1: SDGs (source: UNWTO 2018).

It is an economic powerhouse with the potential to contribute, directly and indirectly, to all of the Global Goals. In particular, the sector has been singled out as a key contributor to achieving Goals 8, 12 and 14. On 17.10.2018, by UNWTO has considered that “improving and implementing sustainable tourism can get us closer achieving SDG 1, End of Poverty”.

In the European economy, tourism is very important because it’s generally and globally acknowledged as being one of the (very) few economic sectors that has more than significant growth prospects and is characterized as a catalyst for peace and prosperity [15]. It accounts for more than 5 % of direct employment and proportion of European GDP and has a tremendous multiplying effect over other economic sectors, enjoying forecast stable growth for the future. Tourism has one of the highest labor mobility rates across Europe, permitting discussion of the emergence of a truly European economic sector and a labor market with a truly European dimension. Thus, the discussion about new occupations and future skill needs for the sector in Europe especially towards the China booms has a particular significance.

International tourist arrivals

There is no management without data, studies and researches. In order to get the right policies for sustainable development, the perspective-oriented research and analysis of new and changing skill needs in the labor market demands must be done at various levels: macroeconomic, regional, local, sectorial, occupational and enterprise levels [16].

The data from UNWTO, and other international organization, scientific events, reports and other documents underline that there is a positive prognosis: 2017’s strong “International Tourist arrivals” results continue in 2018, exceeding the UNWTO’s forecasts [17].

Strategic Orientation and Measurement Policies

Analyzing Chinese tourists' behavior

The need for quantitative measurements, forecasts and models: Europe has already become one of the most popular destinations around the world. The combination of natural values with cultural, spiritual and historical heritage has expanded the range of destinations. Inside it is visited or attracted by foreign tourists. The focus is not only the metropolises of the big capitals but also the suburbs and remote regions that with their marketing policies are covering almost all the target segments, from business, to other forms of tourism products. All of this has increased Europe's popularity, as it has often made it difficult to manage large tourist flows that often has resulted in communities becoming a “block to tourist flows” (the case of Venice). International organizations are also struggling to maximize the benefits of tourism, as well as the use of tourism as an instrument for achieving sustainable development. Therefore, Europe today faces many challenges, that results in involved of many actors regarding the decision-making and development, but there are more strategic approaches to orient both tourists flows and foreign investment into the future: to maintain quality, cautious development and sustainable continental Europe [18].

Europe is one of the most preferable destinations by Chinese foreign tourists after Asia and Oceania. Therefore, tourism is one of the most important sectors of the economy and it has a high potential for growth and development in Europe. In order to stay in the top research of whole destinations, Europe faces a lot of challenges different from the other regions, first of all must adapt tourism European offer to huge Chinese segments of visitors, their behaviors, their models of consuming and buying European tourism products and services, to extend the impact of expenses etc [19].

Without measurement and evaluation there can be no management of Chinese tourist demand: The need for measurement, statistics and quantitative indicators and forecasts can:

i. Identify any changes in tourist behavior and tourist demand;

ii. Predicts changes in spending structure;

iii. Increase investment in particular sectors if needed, etc.

The types of Chinese tourism products consumed, the expensive structure and the need for certain knowledge and skills

Relate to the main tourism products consumed by Chinese tourists must be underlined that the reason why the Chinese choose Europe diversifies and enables the expansion of tourism offerings and benefits to their respective communities. For example, the combination of Chinese travel motives is: Gastronomic Tours, Nature & Greenery, Family Adventure, Various Outdoor Sports, Shopping Centers, Cultural & Historical Sites, Balneary Vacations (divers) also, to diversify the profitability. Also, they prefer to stay in hotels that feel family-friendly, where included; Chinese food, hot water kettle in the room to brew tea, Chinese channel TV, laundry room and warm room snacks.

The dominant age of Chinese foreign tourists is 25-44 years with 51% being male and having completed higher education. Foreign tourists usually travel for pleasure and business purposes. Leisure trips last 10-15 days. Chinese tourists prefer to visit cities, enjoy local food, sports and the arts, which are preferable to staying in the sun during the tourist season. They prefer to travel by plane, with well-organized groups, to 3, 4, 5-star hotels. They prefer to spend a little money on travel and accommodation so that they can shop as it is their favorite activity.

The analysis which is made above shows that therefore, in further strategies that orient European investment towards Chinese demands must be kept in mind that:

1. The range of tourist products that the Chinese include in their packages is quite wide. This has very positive consequences, especially in the fact that besides the accommodation and transport sector, from tourism also benefits other branches of the relevant economies: livestock, agriculture, handicrafts, marine, sports, arts. To quantify the indirect impact that tourism has on these sectors through Chinese “boom” due to the complexity of the “Chinese-made” tourism product, it is necessary to make as many quantitative measurements of the expenditure structure as possible. For example, if agriculture grows to a destination of x-s % per annum, it is necessary to identify how much growth tourism brings to agriculture, and the indirect impact of tourism on growth in other sectors. In this way destinations will prioritize tourism and pay attention to the way of production and land use for agricultural products, or the craft sector.

2. Distribution of tourism offer (tourism product) throughout the value chain: the need for diversification.

3. Certification and standardization of tourism services based on Chinese criteria’s must be adapted.

4. The Needs for knowledge, skills and capacities to cover with this flux is great. It is important to certify tourism services and improve tourism knowledge (strengthen foreign language element, communication and IT knowledge). This means that universities need to deepen and improve their curricula with these shortages (lacks) to better serve the tourist demand, the need for vocational training is even higher, etc.

5. Need for more comfortable accommodation, a greater number of beds, fewer stars, guest house etc.

The cost of structure: Establishing and strengthening European institutions that quantify indicators and measure the levels of tourist demand within Europe has been strategically important. So, for example:

• If 25% of EU money spending in Europe goes to accommodation and this figure aims to increase, then this indicates that there is a need to increase investment in accommodation within Europe, indicating that there is a growing demand for more accommodation.

• If, in the long run, this tendency is observed and continue the same trend of growing, then the need for strategic hotel investment in Europe is high.

But, if the structure of the spending of the Chinese tourists make in Europe shows that, the percentage of money they (Chinese tourists) leave for accommodation is lower than the number of other tourists visiting Europe, it indicates that strategic investment in accommodation should aim at distributing and delivering in more other less expensive accommodations structures, as well as investments in other accommodation structures, such as: more guest houses, hotels with 3 to maximum 4 stars and simple and transitional structures. And further, this policy should be supported by the respective countries, but it should also orient private investors towards this philosophy. If, investments are not well-researched then tourism supply (flows) cannot be met by supply, and the tourist offer already built specifically for Chinese flows will not have a high return on investment (ROI), this full capacity and consequently the impact that this investment will have on its community, will be small [20].

On the other hand, it is necessary to study the evolution of individual items within the expenditure structure. For example, if today a Chinese spends 30% of 1 EU on craft products, it is important to do the same study for at least 3 years. Because, if after 3 years will spend 35% of 1 EU for local and artisan products, then the policies should be such as to support local producers with innovation, marketing, variety of related products which is in increasing demand from the side of the Chinese.

Demand for European Tourism (Changes and Elasticity) and Investment Orientation Policies

In the Balkans, four summits have been organized so far in Romania, Serbia, Bulgaria and Croatia. In most cases, summits were seen as a chance for the promotion of cooperative projects or announcements of future cooperation with the host country. Additionally, each of the Balkan countries have sub-national cooperation with Chinese provinces. Bulgaria and Croatia have established cooperation on the level of cities or regions, while Albania, Slovenia, Montenegro or Romania have not reached the level of cooperation below the national level, but are active in the 17+1 framework through established mechanisms such as Capital Mayors’ Forums, Local Leaders’ Meetings and the Association of Governors of Provinces and Regions. (Empty shell no more: China’s growing footprint in Central and Eastern Europe, April 2020).

As it is mentioned in the introduction, both the Chinese influence and attitude in Europe, namely the “Chinese boom” in tourism investment (Chinese as tourism investor), and the “Chinese boom” in tourism growth (Chinese as tourism) has been considered in this article [21].

A strategic vision for long run sustainable vision in Europe must be based on the sustainability principles that: European international policies must be identified and tailored on national priorities, and based on the local needs of destinations within European continent.

These policies need:

• To have a well-defined and strategic approach toward China;

• Re-orient the main European, and especially economic, policymaking institutions on the strategic sectors most affected by the Chinese tourist boom.

Within the strategic sector of tourism, with the main aim of achieving the equilibrium between supply and demand, both sides need to be oriented and clarified. This means that:

- First, it is necessary to undertake detailed studies at macrolevel (European level) and at micro- level (destination level) to determine the characteristics of Chinese tourist flows: motives, frequency of travel, preferred places to travel, number of the days traveled, the purposes of the trip, the expensive structure, the types of sub products consumed by the Chinese within the tourism bundle (offer). The features that are mentioned above, will be able to determine Chinese tourist demand in order to: identify the appropriate orientations on how Europe should orient supply to demand, and evaluate these factors that may further develop this demand, in order to optimize the impact of this tourist flows in the future.

Second, by analyzing the main motives of Chinese travelers to Europe, it will be possible to forecast the main types of future tourist demand in Europe, due to the massive movement of Chinese, which will affect the transformation of the current massive passenger movement in Europe in general;

Thirdly, must be realized several studies on the main tourism products types which are preferred by the Chinese tourists, starting from products that aim/motivate their demand towards Europe. The reason why this should be done, is to eliminate the social effects that the massive development of Chinese tourists may have on underdeveloped countries within Europe, or to minimize negative environmental impacts, to maximize the use of local resources, to orient local/national investment policies, towards the appropriate tourist offer (hotel investment, tourism infrastructure and service structure). The aim all this is to optimize as much tourist spending as possible, and distributing this spending structure in as many locations as possible in order to boost the local economy of the respective countries.

The strategic orientation of tourism investment is especially important, delicate and sensitive because this “Chinese boom” will orient in long-time period the investors who want to invest in tourism within Europe for Chinese markets. Tourist offers/ packages is solid, demand is elastic, which means that Chinese tourism demand must be well studied, because it will clearly show what structures the Chinese would prefer most for tourism, restaurants, accommodation, etc. The more a given destination aligns and adapt its own resources (primary and secondary) with what the Chinese people (studied) seek, the more it will benefit from this boom in, revenue, employment and output, which will turn tourism into the most important strategic sector for all economies, from the small, to locals and to the national [22].

Prioritizing a sustainable development in Europe: Chinese approach as investors and potential tourists

The UNWTO in its international policies of orientation on the use of tourism as an instrument to achieve sustainable development, occasionally issues updated policies that should follow destinations in an effort to realize the SDG. Situated ahead of the boom in tourism in China, Europe is already facing the challenge of maintaining the same level and striving for sustainable development.

In pursuit of achieving sustainable development objectives, already in the fourth decade of UNWTO efforts, destinations instead of achieving SDGs are attempting to implement concrete sustainable development practices, which will constitute in the best strategy, because:

• These practices (examples) are based on the use of totally local resources;

• Actively include agricultural and livestock products;

• For tourism purposes they can revitalize small craft industries or handicrafts;

• Increase residents' awareness and appreciation of culinary, history and art traditions through their marketing to tourists.

How Supportive is the Prediction that Chinese Flows Can Alleviate or Support this European Challenge?

Chinese as tourists: touristing in Europe

As it is mentioned in article, it is necessary to identify the motives that Chinese travelers have regarding the fact that they choose Europe as their primary destination, analyze their movements, countries they prefer, localities oriented towards metropolises, what they prefer to consume, and so on [23].

The analysis that is made above was not without purpose, in order to understand the attitude of the Chinese when they come to Europe as tourists generally turns out to support sustainable development because:

a) Chinese tourism approaches community-based tourism model (which is very sustainable): their need to touch on everything local and traditional, their desire to travel to distant places and only to touch the historical and cultural heritage of nations, shows that the consumption of local resource is a priority.

b) Therefore, the Chinese tourist boom is supposed to bring about an increase in local production, an indirect increase in agriculture, livestock, artisans and handicrafts.

Chinese as investing in tourism

One of the problems associated with this is, when the Chinese will invest in tourism, i.e. when they will not be coming as tourists to consume local products, but as investors to increase the presence of Chinese capital in European tourism. In this case, from the analysis of the debates from tourism specialists, also various and critical analysts of sustainable development, it turns out that Chinese investments are associated with:

• The presence of their labor force, i.e. the employment of the local population in Chinese tourism investment is minimal or absent;

• Build their own management and representation offices, thus it makes it difficult to maintain a community-based leadership model (with local stakeholders in government).

• Perhaps the uses of local sources of agriculture and livestock will probably be valuable, but it is difficult to say that, this is about reliance on local sources of design, co-management with local actors, the use of local furnishings, etc.

Has been presents earlier cases of foreign investment in European destinations were particularly underdeveloped but needed tourism to develop local economies. These investments have resulted in poverty for the community, lack of indicators of increased social welfare, income and economic indicators as well. The influence of foreign investment in tourism in these countries:

• Have maximized employment, but this has also been seasonal,

• Have kept wages at low levels due to the importation of the labor force,

• Employment of the local population but with low employment rates,

• Keeping low levels due to lack of motivation, the need for a rise in tourism education or educational and cultural development of the community due to its non-involvement in this development process.

It is very likely that the gigantic investments that Chinese investors can make in different destinations within Europe will have the same outcomes as the previous cases mentioned above. Therefore, it is important for local and national governments to:

• Establish certain rules on co-governance, compulsory local employment, quality community employment, etc.

•Chinese management partnership policies with local stakeholders. These partnerships may be difficult to achieve, but it is certain that such partnerships will be able to attract agricultural and livestock products for use in tourism, local populations and other products. So, other sectors of the local economy can be encouraged indirectly [24,25].

Conclusions

In terms of support that “Chinese boom” makes towards sustainability of tourism, there are two approaches:

• When Chinese come as tourists, based on earlier motives and analysis, it is likely that Chinese tourists with their preferences and behavior will increase sustainable local development;

• When Chinese come as investors and invest in local tourism areas, possibility to maintain the coherence of sustainable development is in doubt, due to importing in Europe rather than Chinese capital and cheap Chinese labor, even products, management or infrastructure. Therefore, there is a huge disconnection from the community, creating in this way a distance from community. Thus, increasing Chinese investment in tourism in a community is difficult to associate with increased income, employment or output of the whole area.

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