The U.S. travel industry is slowly learning how to attract affluent Chinese tourists

VIP GOLF USA Spring 2013 issue

Cover of Vip Golf USA magazine, the first magazine fully in Chinese about Golfing in the United States.

According to a report released last week by the U.N. World Tourism Organization, Chinese travelers spent $102 billion on international tourism in 2012, 40% more than they spent in 2011. More than 80 million Chinese traveled internationally in 2011, outspending German tourists — the longtime leader in overseas travel spending — for the first time. Those numbers have steadily climbed since 2000, when 10 million Chinese traveled abroad.
This remarkable growth — largely due to relaxed government restrictions on foreign travel and the rise of a Chinese middle class with disposable income — has forced the U.S. travel industry, from hotels to restaurants to shopping centers, to adapt to this influx of Chinese tourists.
The hotel industry has perhaps been the most attentive. According to USA Today, Marriott has stationed 20 sales representatives in China and teaches employees in the U.S. to speak basic Mandarin phrases like hello and thank you. The Marriott Marquis in New York City has even replaced room numbers on the 44th floor with names because the number four is considered bad luck in many Asian cultures.
Hilton sends its reps to China regularly to meet with corporate travel planners and, according to the report, started a Chinese-guest program, staffed with native Chinese speakers. The company features Chinese meals and displays oranges and tangerines (often considered good luck) in 63 of its hotels.

Meanwhile, Starwood, which owns Sheraton, Westin and W hotels, has revised its amenities and services as well, according to USA Today: “In-room tea kettles, slippers, translated restaurant menus and welcome brochures, on-site translation services and comfort food such as congee (rice porridge) and noodles” can now be found at many of Starwood’s properties.
Luxury Hotels of America Summer 2013Even the publishing industry has now several specialized magazines made for very affluent Chinese travelers coming to the United States: Luxury Hotels of America, VIP Golf USA, Niuyue Mag –  fully in Chinese Mandarin language – offer the latest news about historical hotels in Texas, golf courses in Arizona, or sophisticated boutique hotels in New York City. “The new generation of Chinese tourists coming to the U.S. is craving for high quality information about historical and boutique hotels in America, and want to try other kind of hotels that standardized hotel chains”, said Pierre Gervois, CEO of China Elite Focus, the publishing company of Luxury Hotels of America.
States around the country have also been experimenting with ways to draw more Chinese tourists. According to BBC News, the Massachusetts Office of Travel and Tourism holds a workshop advising businesses on how to cater to Chinese tourists, and California has started a program called China Ready, which includes a learning kit that helps the state’s businesses serve those travelers and understand their culture.
So what are Chinese travelers looking for when they leave their homeland? Mainly, luxury goods. Many tourists leave China to shop, spending an average of $1,230 per trip, and some estimates show they spend about $3,200 per trip when visiting New York City. Items such as clothes and accessories (many of which were made in China) are often at the top of their list.

While the increase in discretionary income among China’s middle class is part of the tourism spike in the U.S., the Chinese government’s decision in 2007 to make the U.S. an “approved destination” has also helped. The designation lets American businesses advertise and market to audiences in China.
As U.S. businesses adapt, they have been forced to confront the reality that America is no longer the inevitable No. 1 destination for Chinese tourists. Because of prior approval by the Chinese government, many European countries have been marketing to Chinese tourists for longer. University of South Carolina professor Robert Li told USA Today that travelers from Shanghai now prefer to travel to France rather than the U.S.
But the number of travelers visiting the U.S. from China is still projected to grow dramatically over the next few years. The U.S. Department of Commerce estimates that from 2010 to 2016, the number of Chinese tourists visiting the U.S. will grow by 232%.

Source : Time, article by J. Sanburn

In the first half of 2012, +46% of visa applications processed at U.S. Embassy for Chinese leisure travelers

President Barack Obama’s initiative to boost international tourism has pushed the US government to process a record 1 million visa applications from China so far during fiscal 2012.
“This extraordinary accomplishment represents visa processing growth of almost 43 percent over the same period last fiscal year, when we had processed just over 675,000 visa applications in China,” the State Department announced Thursday.
The US federal government’s fiscal year begins Oct 1 and ends Sept 30, so the department was referring to visa-processing totals through the end of the third quarter on June 30. As China Daily reported in April, through the first half of fiscal 2012, the State Department had processed 453,000 visa applications from Chinese citizens, up 46 percent from the first six months of fiscal 2011.
To reach the 1 million figure through the current fiscal year’s first nine months, department staff at the US Embassy in Beijing and the four consulates across China processed at least 547,000 visa applications from Chinese citizens in the three months from April 1 through June 30 – reflecting especially high demand for the busy summer travel season.
The State Department credited the opening of more windows for interviews, expansion of consular office space and better-maintained waiting areas for visa processing at the Beijing embassy and its consulates in Chengdu, Guangzhou, Shanghai and Shenyang. Furthermore, it said the average waiting time for a visa interview has been reduced to about a week from the several months it used to take to get an appointment.
According to Pierre Gervois, CEO of China Elite Focus and the author of the Book How U.S. Retail, Travel and Hospitality Industries Can Attract Affluent Chinese Tourists “This initiative is the direct result of a very successful lobbying campaign organized by the retail, travel, and hospitality industries that were the first-hand witnesses of the incredible purchasing power of Chinese tourists in the last few years. Roger Dow (president of the United States Travel Association) and Joe McInerney (president of the American Hotel & Lodging Association) have done a fantastic job of explaining to Washington the vital necessity to the American economy of finding ways to increase the number of Chinese leisure visitors.”
Dong Xue, a senior at Purdue University in Indiana, has just returned from China and it took her only a week to get a visa, even at the peak of summer. As a repeat traveler to the US, Dong was able to use a bank drop-off service to renew her visa. Without having to go for a personal interview, she submitted her paperwork through the bank and got her visa in five business days.
“As the Chengdu consulate (nearest to her hometown of Chongqing) was very busy then, their colleagues in Guangzhou processed my application,” Dong told China Daily. “It’s so fast. Usually it will take two weeks.”
The Obama administration, pointing out the value of travel and tourism to the US economy, introduced in January a strategy to make the United States the top destination for foreign visitors. More than 1 million jobs could be created over the next decade if the US increases its share of the international travel market, Obama has said.
In 2011, about 1.18 million Chinese visited the United States and the number is expected to reach 2 million in 2015, according to the National Tourism Administration of China.

President Obama’s travel initiative will increase the number of affluent Chinese tourists spending money in the U.S.

Acknowledging the prominent role of the travel and tourism sector in creating jobs and powering the economy, President Obama announced that he has issued an Executive Order aimed at boosting travel and tourism during an event in Orlando, Florida.

The President announced an initiative focusing on improving travel facilitation by coordinating activity among the Department of Commerce, Department of State, and Department of Homeland Security. To achieve this, the President has directed the Department of Commerce to create a task force to develop a “National Travel & Tourism Strategy.” The task force will coordinate cross-departmental efforts and ensure private sector participation.

To increase international tourism to the United States, President Obama recommends promoting unique U.S. destinations/experiences, reducing wait times for visas in rapid-growth countries such as China and Brazil, and making the U.S. Global Entry program permanent.

In remarks, the President stated, “Every year, tens of millions of tourists from all over the world come and visit America. And the more folks who visit America, the more Americans we get back to work. We need to help businesses all across the country grow and create jobs; compete and win. That’s how we’re going to rebuild an economy where hard work pays off, where responsibility is rewarded, and where anyone can make it if they try.”

“I was honored to stand with the President in Orlando as he announced that travel and tourism will be a national priority,” said AH&LA President/CEO Joe McInerney. “Travel and tourism is among the nation’s largest employers and a top ten industry in 48 states – so this effort will benefit every community. By focusing on these high-growth sectors, the United States is poised to create jobs and strengthen the economy.”

Many of the priorities highlighted by the President today are shared by the AH&LA co-chaired Discover America Partnership (DAP). DAP is a lobbying and grassroots campaign working to advance visa and entry reforms in order to regain the share of the international traveler market the United States held in 2000. By recapturing America’s historic share of international travel, the U.S. could create up to 1.3 million new U.S. jobs by 2020 and produce $859 billion in cumulative additional economic output.

“While working with the Travel and Tourism Advisory Board (TTAB), we reported that tourism is a low-cost/high-reward prospect and one of the few industries showing positive growth,” said Nancy Johnson, AH&LA chair and executive vice president, development, Carlson Hotels, America. “Promoting travel produces a multiplier effect that benefits all industries and TTAB estimates we could add 500,000 new U.S. jobs by 2015 with no cost to tax payers. We commend the President for taking this positive step forward.”

“President Obama’s travel initiative will certainly help the U.S. hospitality industry to acquire more affluent Chinese travelers and create more jobs in luxury retail, golf industry, and shopping centers”, said Pierre Gervois, CEO of China Elite Focus, member of the Manhattan Chamber of Commerce. “In cities like New York City, hotels and retailers are now taking initiatives to attract the wealthy segment of Chinese customers, even before they arrive in the country, when they are still in China, planning their shopping trip to the U.S.”

Promoting travel and tourism remains one of AH&LA’s highest priorities. AH&LA and the Discover America Partnership will continue to work closely with Members of Congress, the Administration, and governmental agencies to highlight the incredible opportunity presented by bringing more international travelers to United States.

Getting America ready for the Chinese Tourist Boom

Dr LiBy Dr Xiang(Robert) Li, Professor at the College of Hospitality, Retail, and Sport Management, University of South Carolina, USA.

Thanks to their sheer number and spending power, “Chinese outbound tourists” has been the buzzword in the American tourism community for a while. Our recent study showed that the United States is the No. 1 “dream destination” of Chinese citizens; and there are at least 11.5 million Chinese who have been or are interested in traveling to destinations outside Asia.  Below are some suggestions for American destinations and business interested in turning this opportunity into business reality.

Build a unifying image.

The United States needs to centralize its promotions, create a clear brand identity, and deliver the message effectively. The fragmented efforts by different American destinations and businesses could confuse potential customers.

Become more visitor-friendly.

From visa application, customs procedures, to signage in major cities and attractions, the United States needs to show genuine hospitality and respect to Chinese visitors.

Understand your guests.

The new Chinese outbound tourists are savvy global travelers. American destinations and businesses need to better understand their preferences and expectations, which starts from conducting sophisticated marketing research.

Partner with Chinese travel trade.

At the current stage, most Chinese leisure tourists still travel to the U.S. in groups. Thus, the focus of marketing communication efforts is Chinese tour operators, travel agencies, and travel media.

Grab late-mover advantage.

The U.S. is unfortunately among the last couple of developed countries obtaining the ADS (Approved Destination Status). However, this also allows American destinations to observe and learn from other countries’ experiences and lessons.

(Article previously published in “The new Chinese Tourist”, March 2009)

For more information about Dr. Li, please visit his web site at