The ongoing slowdown in the global economy and the uncertain economic outlook in China continued to have a major adverse impact on demand for corporate business travel retail in 2012, especially among MICE travellers. In light of the severely tightened corporate travel budgets, China's business travellers either reduced the frequency with which they engaged in business travel or shortened their business trips. This had a seriously negative effect on travel retail in China during the forecast period. However, overall, travel retail still recorded robust current value growth in 2012 as the majority of Chinese people tend to go travelling on their savings for leisure and other non-business purposes at least once a year. In light of rising disposable income levels and the growing awareness of the importance of leisure travel for personal wellbeing, increasing numbers of Chinese consumers had larger budgets for leisure travel towards the end of the review period, boosting spending on travel retail overall in 2012.
China International Tour Service Co Ltd (CITS) maintained the leading position in travel retail in 2012 with a value share of 17%, the result of a one percentage point increase over the course of the year. As the first travel company to acquire a license to organise overseas trips for Chinese people from within China, CITS now enjoys high brand awareness among local people and has a reputation as a well-established industry player. The company operates under 36 wholly-owned subsidiaries and 700 points-of-sale across China. CITS has also formed steady long-term partnerships with over 1,400 travel agencies in over 100 countries around the world. This enables the company to provide consistently high levels of service to its customers, resulting in the company remaining in first position in travel retail since 2010.
The outlook for travel retail for the forecast period remains upbeat as the category is expected to increase in constant value at a CAGR of 9% over the forecast period. This growth is set to be mainly supported by the growing need to relax among the Chinese population as the mounting pressures of both professional and personal lives are expected to combine with rising disposable income levels, resulting in vigorous growth in travel retail over the forecast period. In addition, demographic changes among China's population, most notably the ageing of the Chinese population, are also set to be positive factor behind the growing demand for travel retail in the country during the forecast period.