Wang Xiaoyu: The Rise of the Middle Class and Hotan Characteristic Tourism

The rapid development of tourism drives the transformation of China's economy. When a productive society turns into a consumer one, the tourist needs evolve into a differentiated hierarchy. As a result, the differentiation of tourist needs led by the middle class facilitates market segmentation, during which characteristic tourism gains rapid growth.

First, let me give an introduction of tourism market in China: 1) The macroeconomic slowdown. According to the staff of International Monetary Fund, the global economic growth rate stabilized and then rallied in the first half of 2019. 2) The tourism market grows against the trend. Based on the official data about the number of domestic tourists and revenue released by the Ministry of Culture and Tourism in 2013-2018, the overall growth rate of tourism exceeded that of economy and tourism kept upgrading. To be specific, Tourism 1.0 focuses on food, accommodation, travel, tourism, shopping, and leisure; Tourism 2.0 on cultural and entertaining experience, whereas Tourism 3.0 on characteristic tourism. 3) Imbalanced supply of tourism. The growth of traditional tourism market stalls while emerging market demonstrates strong momentum. 4) The contradiction between supply and demand has deep reasons. One reason is that consumption upgrading leads to new generation of products and services. The rise of the middle class, on the other hand, is the root causes, which has produced characteristic cultural and experiential requirements and sightseeing functional products.

After that, the middle class and characteristic tourism development can be studied from the following three perspectives.

The first is about middle class and tourism market. According to integrated data of Credit Suisse Research Institute and some scholars of academies like Li Chunling, the middle-class scales of China, America, and Japan account for 20.1%, 37.3% and 59.5% respectively. The middle class takes the lead in the tourism market with strong population base, consumption capacity and loyalty.

The second is to analyze the characteristics of middle-class needs in the terms of travel frequency, motivation and contributing factors. According to Maslow's hierarchy of needs theory, we draw a conclusion on the hierarchy of middle-class needs for tourism - the pursuit of advanced spirit and basic material. Specifically, the advanced spiritual pursuit refers to the need for experience, including experience of other cultures, representing differentiated hierarchy of needs, broadening human relations within the same class, and self-satisfaction and self-worth. On the contrary, basic material refers to functional needs, featured as fast convenient transportation, delicious catering, sanitary accommodation, and industry-recognized environment.

At the same time, we have concluded a verdict on the hierarchy of middle-class needs for tourism products-advanced and basic products. In detail, advanced products pay more attention to theme (experience of themed culture or history), diversity (diversified, business state that highlights culture), and characteristics (participation in differentiated experience of history and culture). Basic products, instead, involve the quest for safer and more convenient food, accommodation, travel, tourism, shopping and amusement.

The third is about the development of middle class and characteristic tourism. Characteristic tourism satisfies the needs of differentiated middle classes. High-level needs are reflected in themed feature experience, but basic needs ask for comprehensive functional products. Therefore, characteristic tourism can make the consumption needs diversified.

Now that the middle class is closely related to characteristic tourism, what's the development direction of characteristic tourism?

Firstly, characteristic tourism should be perfectly matched to the needs of middle class, which includes the adventure of ancient architecture, ethnic culture and historic events, uniqueness of characteristic tourism products, social behavior of the community sharing common interests, and exhibition of self-recognition and experience.

As for form of characteristic tourism, it contains industrial sites of Hamburg in German, British Museum, French Castle of Chenonceau, Napa Valley winery in USA, and train travel in Switzerland.

Characteristic tourism of the middle class will head towards product upgrading. As we mentioned above, Tourism 1.0 is sightseeing, with the focus on food, accommodation, travel, tourism, shopping and amusement; Tourism 2.0 vocation, Tourism 3.0 themed tour; and Tourism 4.0 the value chain of characteristic culture and tour.

Through analytical investigation of tourism market in Hotan, I'd like to share some views with you about local poverty alleviation through tourism.

In recent years, the market of tourism in Hotan has been growing rapidly, but the number of tourists visiting Hotan and tourism revenue is imbalanced. According to statistics, China received a total number of 5.539 billion tourists and 5.97 trillion yuan of revenue, with per capital consumption of 1,085 yuan. In the same year, Xinjiang received 0.15 billion of tourists and 258 billion yuan of tourism revenue with per capital consumption of 1,719 yuan, in stark contrast to 2.13 million of tourists, 2.75 billion of revenue and per capital consumption of 1,291 yuan in Hotan.

Although remarkable progress has been made in poverty alleviation through characteristic tourism, the imbalance of product structure still exists. To be more specific, there are a few functional sightseeing products but a large amount of functional sightseeing ones such as whitefish agritainment in Bashi Layika Village, Layika Township, Hotan. The customers spend a little in the second consumption, stay not for long in tourist attractions, and the revenue increases more slowly than the population.

One problem of Hotan characteristic tourism market is that it needs to update agritainment tourism products. Generally, it updates from Version1.0 folk custom agritainment to Version 2.0 theme culture village to Version 3.0 recreational complex with characteristic according to the law of development.

Mismatching between supply and demand is another one. The market demand refers to themed, high-quality, diversified products and services of cultural experience. But the problem with market supply is that functional products outweigh experiential ones. In addition, there is a lack of themed competitiveness and high-end products within the same area. Limited core products fail to live up to diversity.

As for the above problems, my suggestion for Hotan is to improve traditional products and enhance characteristic tourism. In other words, we will make the tourism products more diversified by optimizing the original product structure, developing new products, and promoting themed experience. In detail, we need to introduce organizations of market development and operation to create cultural attractions + comprehensive recreational supporting complex through marketization. We must develop cultural complex of film, industry, agriculture and history and improve the recreational characteristic, creativity and service quality of traditional tourism products. On top of that, we must strengthen direct subsidies for transportation and enterprises and subsidy polices.

Finally, let's take two successful cases for reference.

Case study 1: Guggenheim Museum Bilbao - characteristic museum tourism. Located in Bilbao, Basque Country, Spain, the museum caters to the tourists in Spain and Europe with modern arts and recreation. The museum, a former downfallen industrial economic belt, now develops into a cultural tourism destination with cultural supply chain driven by innovation settlement, facilitating the economy in the region.

Case study 2: Taiwan Qingjing Farm - characteristic agriculture tourism. The Farm covers 700 hectares, and is 260 kilometers far from Taipei, and 1,748 meters above the sea level. The farm boasts farms and hotels, devoting to the experience of characteristic agricultural tourism. For that, it is equipped with a tourist center and complete infrastructure, and holds ethnic activities, such as festivals, dances, gourmet and interactions of Dai people so as to create a high-level tourism experience, an upgrading from basic products to high-tier agricultural tourism products.

To sum up, I believe that tourists of the middle class will pursue more differentiated products during social transformation. The hierarchy of tourism needs of middle class leads to the hierarchy of tourism products. Characteristic tourism meets the requirements of the middle class.