Europe Bets Big on Chinese Tourism but should leave to the States their marketing strategy

Chinese family - China Elite FocusIn a press event hosted by upcoming travel trade fair ITB China and its Chinese joint venture partner TravelDaily China, Europe laid out its plans for greater efforts to boost tourism between China and the EU.

Eduardo Santander, executive director of the European Travel Commission (ETC)—which represents European national tourism organizations—said that the European Commission is making huge investments in the 2018 EU-China Tourism Year. Santander argued that Europe as already reached the “awareness phase” in the Chinese market, and that the challenge now is to enhance Chinese consumers’ understanding of Europe as a destination. Santander also emphasized that Europe needs to understand the Chinese market better, and to look beyond the large cities in East China.

Even though the EU-China Tourism Year still lies a year into the future, efforts are being made to enhance the promotion of Europe as a destination already in 2017. ITB China, the Chinese counterpart of ITB Berlin—the world’s largest tourism fair—is hosting Visit Europe as its official partner destination for the inaugural event in May 2017, and outlined further collaboration during the tourism year in 2018.

The European Commission has also invested in what is called the World Bridge Tourism initiative; an EU initiative carried out by the ETC and the European Tourism Association (ETOA) that aims to grow the number of Chinese visitors to Europe by encouraging stronger business ties between European and Chinese tourism businesses. The initiative includes a conference as well as business workshops that bring European tourism suppliers and Chinese tour operators together, first for two days in Shanghai in conjunction with the ITB China fair, and later in the fall of 2017, doing a similar round of events on European soil. According to Tom Jenkins, CEO of ETOA, both events will host 150 European tourism suppliers and 100 Chinese tourism buyers. It was also announced that the EU had granted additional funding to carry out tourism workshops in both China and the EU to strengthen tourism ties further. The European Commission, which created the initial outline for the project, as well as funds the project, was also represented at the press event, briefly emphasizing the importance of Chinese tourism to Europe as a region.

But industry experts have a more cautious approach, like Pierre Gervois, Expert in marketing to Chinese outbound tourists, who declared “Europe in itself does not mean a lot for Chinese travelers. A coherent marketing approach should be done at country level, as each European country is so different, with different languages and cultures, promoting at the same time 28 very different countries is a waste of the European’s taxpayers money”

“European countries should promote themselves using their unique cultures.  For a Chinese traveler, you don’t dream on a trip to Europe, but to a trip to Italy and a trip to France, for example”, Mr Gervois added.

While strengthening the European tourism businesses with the help of Chinese tourism is a clear goal of both the World Bridge Tourism initiative and the 2018 EU-China Tourism Year, Santander also underlined that the designated tourism year “goes beyond tourism,” emphasizing the importance of more people-to-people interactions to reduce existing “misunderstandings” between Chinese and European people.

The event also hosted speakers from some of China’s largest tourism companies, including representatives from Jin Jiang Hotels, Ctrip, and Tuniu—all outlining their ambitions for future growth. Jin Jiang, which acquired Europe’s second-largest budget hotel chain, Groupe De Louvre, back in 2015 also has to ambition to expand in the European luxury hotel market. Ctrip, meanwhile, acquired Scotland-based Skyscanner to strengthen its position in the European market late last year. Tuniu, meanwhile, has partnered with ITB China and promises to send a large number of its buyers to the May event—where 40 percent of exhibitors represent European destinations and tourism businesses. While Europe may be looking to China for future tourism growth, it seems like large Chinese tourism businesses are looking to Europe for their own global expansions.

Sources: Jing Daily / ITB / European Travel Commission / ETOA

Marketing to Chinese Outbound Tourists: Towards Normalization.

By Pierre Gervois, Founder & Publisher of the STC magazine, CEO of China Elite Focus Magazines LLC (New York), keynote speaker and expert about marketing to outbound Chinese tourists.

In 2005, I had the first conversations with executives in luxury hospitality groups about the importance of improving the welcome for their first Chinese guests. I knew they used to receive a very poor quality of service, in large part because of the ignorance of the Chinese culture from the staff of luxury hotels, and also because of the persistence of stereotypes about Chinese travelers.

The General Managers of five star hotels I talked to from 2005 to 2007 told me more or less the same thing “Chinese tourists don’t stay in five star hotels”, and, as a consequence, they did not see the point of investing resources to improve the service for their Chinese guests.

Today, these same hotels advertise in the STC magazine and ask us to define their marketing strategy to attract more of high-spending Chinese guests and offer them the best possible service.

Wealthy Chinese tourist- China Elite FocusThings have obviously changed over the last ten years.

To better understand the way Chinese outbound tourism has dramatically changed over the last decade, let’s go back fifteen years ago, in the early 2000’s.

I would define three periods to describe the evolution of Chinese outbound tourism:

From 2000 and 2005, most of Chinese outbound travelers were business travelers traveling in official delegations to attend to trade shows and official business meetings in Western Europe and in The United States. At that time, it was nearly impossible for individual Chinese leisure travelers to obtain an independent leisure visa for Europe or the U.S., and the only way to have holidays overseas was to travel in the famous (or infamous) group tours organized by Chinese State-owned outbound travel agencies, in partnership with selected destination management companies in their country of destinations.  Basically, their passports were confiscated by travel agencies during their trip in coaches and low quality hotels, which is not a very enticing way to travel.

I talked with many of these first Chinese leisure travelers between 2000 and 2005, and they told me how displeased they were by the very poor quality of their travel experience, and how their feelings were hurt by the stereotypes who were widely spread within the travel industry: Chinese tourists were supposed to love to travel in coaches, were allegedly obsessed with discounts, and would prefer to stay in one star hotels. In fact, my Chinese friends were at that time willing to be free to explore a country on their own, were searching high quality – and expensive- travel experiences, and were particularly fond of nice suites in five star hotels. Basically, like a lot of affluent western travelers.  But not of a lot of travel and tourism professional understood and even listened to them at that time.  You were a Chinese tourist?  Then you had to fit in a certain category of negatively stereotyped traveler. Period. In some cases, that was very close to segregation, and surprisingly, very few western travel & tourism professionals realized how painful and sometimes humiliating it was for Chinese leisure travelers.

From 2005 and 2010, The travel and tourism industry started – slowly – to give up on stereotypes concerning Chinese travelers, and at a slower pace to gradually improve the service for Chinese travelers.  Some hotel chains started to offer in-room Chinese tea (It took several years of studies and commissioned researches for hoteliers to take such a simple and inexpensive step), or started to recruit a few Chinese speaking staff members.  But the industry did not yet understood where the core problem was: the structural inability of both the outbound travel agencies (OTA’s) and destination management companies (DMC’s) to understand this massive change in international outbound tourism.  In less than ten years, faster than in any other country in the history of international leisure tourism, a group of outbound travelers was growing at an impressive and never seen rate, from 5 million in 2000 to 57 million in 2010. With old fashioned organizations, Chinese OTA’s could not offer the kind of service that the new generation of Chinese travelers wanted from them: a good understanding of international travel opportunities.  On the other hand, DMC’s in Europe and the U.S. were still stuck in their preconceptions about Chinese leisure travelers and kept offering the same standardized programs (Traveling in coaches from a discount shopping mall to another and sleeping in very low quality hotels), that were by the way never favored by the Chinese travelers themselves.  But their advice was never solicited.  That was before the social media era.

GERVOIS magazine Advertising and sponsored content opportunitiesAround 2008, the first social media networks started to become popular in China.  And yes, I remember the time (somewhere in 2008), where Facebook and Twitter were freely accessible in China. With the launch of Weibo in 2009 and dozens of other Chinese social media networks, Chinese outbound travelers started to post stories about their experiences about their overseas travel, and make comments about hotels (since 2008 with the launch of DaoDao, the Chinese version of TripAdvisor). I frequently read translations in English of comments written in Chinese Mandarin about famous luxury hotels in New York, London or Paris, and the first comments and reviews were incredibly negative. Most of them expressed how the staff of these famous hotels lacked of respect with their first Chinese guests, and did clearly offer them a second-class experience compared to other guests from western countries. I was also surprised to see that nobody in these hotels made the effort to request a translation of comments made by their Chinese guests and analyze them.

From 2008 to 2010, the first travel destinations, travel agencies and hotels started to realize that they needed to communicate properly with Chinese outbound travelers, but very few marketing options existed. China Elite Focus was historically the first digital marketing agency (founded in june 2008 in Shanghai) who was exclusively specialized on digital travel marketing for affluent Chinese outbound travelers, with a unique focus on luxury destinations.  The launch of China Elite Focus was followed by a flurry of creation of other independent digital marketing agencies in China, Europe and the US, and defined all together an entire new marketing category: digital marketing to Chinese outbound travelers. The quick development and the popularity of Chinese social media networks as well as the first digital campaigns to promote international travel to Chinese potential travelers contributed critically to a better connection between travel operators worldwide and the emerging category of young and affluent Chinese first-time outbound travelers.

But access to the information was still a big issue, specifically for high spending travelers: From China, how to know what is the best hotel in New York you absolutely want to stay in? What is the best exclusive golf course in Scotland? How to book a table in the Paris’ finest restaurants?  No curated information was available at that time in Chinese Mandarin.  The existing travel magazines published in China did not had such sophisticated informations, and no website existed. That is the main reason we launched the Shanghai Travelers’ Club magazine (or the STC magazine) in 2009 as an electronic newsletter and since 2012 as an iPad & iPhone digital publication.

Chinese tourist having lunch - China Elite FocusFrom 2010 to 2015, all the elements of the complex puzzle were in place: a dynamic social media network environment in China, the emergence of digital only Chinese travel agencies using extensively social media, the growing desire of Chinese travelers to discover foreign countries, and the understanding by western travel, tourism and retail companies that, yes, this is it, Chinese travelers are the world’s biggest spenders and the #1 group of Chinese outbound travelers. This is an interesting period where we saw two different categories of Chinese travelers intersecting on different paths. Senior travelers, mostly top executives of large Chinese companies who reward themselves after a life of hard work with a once or twice a year luxury international travel experience, and their children, in their early twenties, who quickly become frequent global travelers (six to ten times a year), and end up spending more than their parents in travel and shopping.

One of the important reason for the exponential growth of Chinese outbound tourism (120 million in 2015) is luxury shopping, and in particular the desire to have a genuine shopping experience. Buying a Gucci bag in Milan, a Louis Vuitton suitcase in Paris or a Tiffany diamond in New York was seen in the early 2010’s as a necessary sign of social status for the young and affluent generation. International luxury brands understood too late this trend and hastily opened too many stores in China in this period, many of them with more sales associates than Chinese customers. (They are now closing stores and start to focus on improving the customer relations at their flagship stores in the US and in Europe for Chinese shoppers.)

On January 19, 2012, President Obama issued the “Executive Order #13597” who had a major impact in Chinese outbound travel.  This decision had to major consequences:
First, “to increase nonimmigrant (i.e. tourists) visa processing capacity in China by 40% over the coming year”, meaning allocate more human resources at U.S. consulates in China in order to be able to review and process more leisure visa requests.  Second, “to ensure that 80% of nonimmigrant visa applicants in China are interviewed within 3 weeks of receipt of application”, meaning to allow a much faster process for individual Chinese tourists planning holidays in the U.S..  This rather technical Executive Order created a psychological change in the perception the United States as a  luxury holidays destination by Chinese travelers.  Previously more considered as a business destination, the U.S. were seen as of the beginning of 2012 as a much more “tourist friendly” destination by the Chinese, and they started massively to consider to spend holidays in this country, who appeared as newly opened to them. We saw a surge in requests on Chinese search engines about “travel and holidays in the US” in the first half of 2012, and the U.S. travel and tourism industry operators started to feel the economical benefits of an increased influx of Chinese leisure visitors as early as the summer 2012. (1.5 million Chinese visitors came to the U.S. in 2012, 3.1 million are expected for 2019).

STC magazine - Gervois Hotel Rating CoverIn november 2014, China and the United States negociated a reciprocal agreement to extend the validity of tourists visas up to ten years (multiple entries).  It means that since november 2014, a Chinese tourist with a valid tourist visa to the United States can keep this visa for up to ten years, with multiple entries. That is very close to the “Visa Waiver program” with european tourists, and has strongly encouraged Chinese travelers to choose the U.S. over Western Europe destinations, who do not offer tourists visas with such a long validity for Chinese visitors.

At the end of 2015, We could say that 80% of tourism offices, hotel chains, retailers, and airlines had in place elements for a marketing strategy focused on Chinese tourists, even a modest one. What a change if we compare to 2005, where virtually less than 5% of them had a strategy in place.

Today, what could be the trends for the years to come? The first world that comes to my mind is normalization. For the last fifteen years, travel and tourism marketers considered Chinese tourists as a kind of “exotic” category of international traveler, with all the stereotypes and preconceptions attached. Now that more than 100 million Chinese travelers discover the world every year in virtually every country on the planet, tourism and travel professionals have a much better understanding of what the most important group of tourists really want.  And it’s – how surprising – exactly what Americans and European travelers want when they travel abroad: A carefully curated travel experience, nice hotels, local cultural and food discoveries, and the possibility to choose, alone, what to do during the day. Before starting a marketing campaign focused on Chinese outbound travelers, it’s now time to have the exact same mindset that for a marketing campaign targeted at any other nationality of tourists. And, please, forget about the stereotype of the Chinese traveler allegedly only interested by discounts. They are not. They want quality, sophistication and authenticity.  And they know it doesn’t come cheap.

 

Pierre Gervois: What Chinese Travelers Want

Hospitality guru Pierre Gervois on how to cater to Chinese tourists.

PIerre Gervois TV Interview News China 2016

Marriott hotels rush to invest in China, maybe too fast.

Chinese photographer- China Elite FocusThe Chinese economy may be slowing but tourist numbers are still growing, prompting international hospitality giants to place bullish bets on the sector by opening new hotels and cruise routes.

Marriott International and Royal Caribbean Cruises are among companies looking to cater to a rapidly growing number of wealthy Chinese who are not only spending more at home but also flocking overseas, executives from the companies told CNBC.

“Outbound Chinese travelers are still growing faster than the economy in China, so we don’t see the same thing that everyone is talking with the economy happening with the Chinese travelers,” said Marriott International’s president and managing director for Asia Pacific, Craig Smith.

Over the week-long Lunar New Year holidays, room revenue growth in Marriott resorts within China rose 12 percent from a year ago, Smith told CNBC’s Squawk Box on Wednesday.

To target fast-growing middle class Chinese who will not just need leisure but business accommodation, Marriott and China’s Eastern Crown Hotels signed an agreement recently to open 100 mid-scale Fairfield by Marriott hotels in mainland China by 2021. Another 40 hotels are slated to open later.

Intercultural aspects are also important: “U.S. hotel chains like Marriott should carefully analyze what Chinese travelers want. A common misconception is that Chinese travelers are interested in cheap, mid-range hotels.” said Pierre Gervois, CEO of China Elite Focus Magazines LLC, a publishing & consulting company based in New York. “The truth is that most of Chinese travelers are ready and willing to pay for five star premium hotels, and are tired of these stereotypes” added Pierre Gervois. “Marriot should focus more on attracting High Net Worth Chinese in their U.S. five star properties rather than investing in hastily strategized risky ventures in Mainland China ” he concluded.Gervois Rating Banner 01

As for outbound travel, Chinese tourists undertook more than 120 million trips overseas in 2015, according to the China National Tourism Administration. That number is expected to grow by 11 percent this year, Smith added.

To tap this growing market, Royal Caribbean Cruises will in April launch cruise ship Ovation of the Seas, with Tianjin as the home port.

Royal Caribbean is upbeat on the nascent cruise industry in China even though it is likely to capture just a fraction of the vacation traffic—typically 2 percent globally—said president and chief executive officer of Royal Caribbean Cruises, Adam Goldstein.

With over 100 million outbound departures a year, there are “not enough ships based in China right now … to even take 2 percent of the outbound travelers”.

There are just about one million cruise passengers in China now, he added.

Sources: CNBC / Huilen Tang / The New Chinese Tourist / Chinese Tourists in America

Follow CNBC International on Twitter and Facebook.

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Malaysia offers e-visas to attract Chinese tourists

Chinese visa for Malaysia - China Elite FocusMalaysia announced on Tuesday it would introduce e-visas for travelers from China in an effort to boost tourism between the two countries.

Malaysia also waived the visa requirements for Chinese tourists who stay less than 15 days in the country from March 1 to December 31, 2016, Ministry of Tourism and Culture in Malaysia said at a press conference in Beijing.

The e-visa system will be carried out in three stages, beginning with an introduction for visitors from the Chinese mainland, and then to Chinese citizens who live outside the mainland. Finally, it will be extended to countries including India, Myanmar, Nepal and Sri Lanka.

Malaysia will allow visitors e-visa stays of up to 30 days, though some visitors will be approved for as many as 90 days, the traveling department said.

In an exclusive interview with the Dato’ Seri Mohamed Nazri Abdul Aziz, Minister of Tourism and Culture in Malaysia, he told the Global Times that the policy was designed to attract Chinese tourists amid competition from neighboring countries such as Japan and South Korea.

The Southern Daily reported on Wednesday that South Korea is expected to double the period of visa-free entry for Chinese transfer passengers to 10 years.

Last year, 1.6 million people traveled from China to Malaysia, he said.

The ministry expects that number to hit at least 2 million this year, and possibly reach as high as 4 million.

Although the global economy has slowed, the tourism industry has continued to grow.

The Malaysian government believes that the tourism industry will stimulate trade and investment, as well as create job opportunities in the country.

Tourism contributed approximately $38.1 billion to Malaysia’s GDP in 2014, accounting for 14.9 percent of the total.

Foreign tourists spent about $17 billion in the country over the course of the year, according to a note the ministry sent to the Global Times on Tuesday.

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Tourists from China brought $930 million to New Zealand

TLNZ websiteotal exports of goods and services were valued at 69.3 billion NZ dollars ($45.99 billion) in 2015, while imports totaled 66.9 billion NZ dollars ($44.4 billion), according to Statistics New Zealand.

Total exports rose 1.9 billion NZ dollars ($1.26 billion) from 2014, driven by a rise of 2.3 billion NZ dollars ($1.53 billion) in spending by international visitors and an increase of 895 million NZ dollars ($594.1 million) in exports of meat products, while the value of dairy exports fell by 3 billion NZ dollars ($1.99 billion).

“Although dairy exports were lower across the year, it has remained our top export earner. However, earnings from other export industries and markets have increased in significance, picking up the shortfall in dairy,” international statistics senior manager Jason Attewell said in a statement.

The growth in earnings from meat and travel was driven by key export markets, including China, the United States, and the European Union (EU).

Spending on personal travel by visitors from China had increased 1.4 billion NZ dollars ($929.32 million) since 2011 to 2.2 billion NZ dollars ($1.46 billion) in 2015, while visitors from Australia, New Zealand’s biggest tourism market, spent 1.9 billion NZ dollars ($1.26 billion) in 2015.

Pierre Gervois & Len Brown

Len Brown, Mayor of Auckland, and Pierre Gervois, CEO of China Elite Focus

“We see clearly the result of the combined efforts of all New Zealand actors in travel & tourism over the last years”, said Pierre Gervois, CEO of China Elite Focus, a New York & Shanghai  based company specialized in promoting international destinations for Chinese tourists. “The Luxury New Zealand campaigned launched in 2011 at the initiative of Auckland Airport, and managed by China Elite Focus, changed the perception of New Zealand. The new generation of affluent Chinese investors come now to buy real estate and invest in New Zealand companies, as well as spending in luxury travel experiences.

Last year, the EU was New Zealand’s largest source of imports, totaling 12.1 billion NZ dollars ($8.03 billion), followed by Australia on 11.3 billion NZ dollars ($7.5 billion) and China on 10.4 billion NZ dollars ($6.9 billion).

New Zealand’s largest import expense in 2015 was electrical machinery and equipment from China.

“The rise in electrical machinery and equipment was mostly due to consumer electronics such as mobile phones,” Attewell said.

“In recent years, cars from Japan or the EU had been our top import.”

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Chinese Tourists Expected to Spend $264 Billion a Year by 2019

chinese monaco

Chinese tourist in Monaco / Courtesy of the Shanghai Travelers’ Club magazine.

Buy your holiday now, before a wave of 174 million Chinese tourists snap up the best bargains.

Already the most prolific spenders globally, the number of Chinese outbound tourists is tipped to soar further as the millennial generation spreads its wings.

Here are the numbers: 174 million Chinese tourists are tipped to spend $264 billion by 2019 compared with the 109 million who spent $164 billion in 2014, according to a new analysis by Bank of America Merrill Lynch. To put that in perspective, there were just 10 million Chinese outbound tourists in 2000.

How much is $264 billion” It’s about the size of Finland’s economy and bigger than Greece’s.

“China-mania spread globally in the past few years, akin to when the Japanese started travelling some 30 years ago, when the world went into frenzy then, pandering to Japanese customers’ needs,” the analysts wrote. “In our view, this is going to be bigger and will last longer given China’s population of 1.3 billion vs Japan’s population of 127 million.”

Millennials, or 25- to 34- year olds, are expected to make up the bulk of Chinese tourists at 35% of the total, followed by 15- to 24-year olds accounting for around 27%.

GERVOIS magazine Advertising and sponsored content opportunitiesOnly about 5% of China’s 1.3 billion populace are thought to hold passports, meaning the potential for outbound tourism is vast.

The projected boom could be good news for the global economy. The Chinese are the world’s biggest consumers of luxury goods, with half of that spending done overseas. Chinese visitors to the U.S. have risen more than 10% since 2009, the fastest pace for a destination outside of Asia. Australia, France and Italy are also popular.

Asian markets stand to benefit, with the biggest uptick tipped for Japan, South Korea and Southeast Asia, according to the research led by Billy Ng in Hong Kong.

Source: Enda Curran / Bloomberg. All rights reserved