As the UK Government sets out plans to increase the number of visiting Chinese tourists, WealthInsight research suggests lesser-known centres like Hangzhou, Wuhan and Chongqing could be the places to target for high net worth tourists in the years ahead.

On Wednesday, Jeremy Hunt, culture secretary, set out plans to “turbo-charge” the UK tourism industry, announcing an £8 million marketing campaign focused on tripling the number of tourists coming from China. “By 2030, China should have around 1.4bn middle class consumers – creating a potential market four times bigger than America.” Mr Hunt said.

Indeed WealthInsight finds that China will be fertile ground for the creation of High Net Worth Individuals (HNWI) in the coming years. According to our analysis more than 845,000 Chinese will join the ranks of HNWIs between 2011 and 2015 – equivalent to about 24 every hour (see chart). During this period, growth in billionaires will lead the way with an increase in volume of over 450% and an increase in total wealth of 600%.

China is experiencing rapid growth in the number of people with assets >£1m

Source: WealthInsight

With this rapidly expanding wealth, Chinese tourists are a lucrative market. In 2010 Chinese tourists spent £1,677 each per visit to the UK according to Visit Britain, three times more than the average. And the latest UNWTO World Tourism Barometer shows that Chinese expenditure on international tourism increased by 32% in 2011; reaching $73bn (see below). Mr Hunt’s strategy is intended to ensure the UK doesn’t lose out to other European countries like Germany and France, who currently attract more visitors from China.

China was the 3^rd top source market for international tourism expenditure in 2011

Source: UNWTO World Tourism Barometer

To do this the government will increase marketing and airline connections in cities beyond traditional wealth centres like Beijing and Shanghai. Recent WealthInsight research could be of help. Our analysis sheds light on some of China’s lesser known centres for growth in ultra-HNWIs (those with assets over >$30m), highlighting Tier II and Tier III cities like Hangzhou, Wuhan, Chongqing, Chengdu and Fuzhou, as growing wealth hotspots. These are the places high spending Chinese tourists will be coming from in the years ahead.

City	Growth in UHNWI's (2011-2015)	UHNWI's, 2011	Predicted UHNWI's, 2015
Fuzhou	90-100%	50-100	100-150
Chongqing	85-95%	50-100	150-200
Hangzhou	75-85%	500-600	950-1050
Chengdu	75-85%	100-150	200-250
Wenzhou	75-85%	100-150	150-200
Wuhan	70-80%	100-150	150-200
Tianjin	65-75%	150-200	250-300
Changsha	60-70%	100-150	150-200

Source: WealthInsight

Analyst Contacts:

Christopher Rocks

christopher.rocks@wealthinsight.com

020 7406 6711

Andrew Amoils

andrew.amoils@wealthinsight.com

020 7406 6564