Pierre Gervois: What Chinese Travelers Want

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

PIerre Gervois TV Interview News China 2016

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Could Asia become overly dependent on Chinese tourists?

Chinese-tourist-in-ThailandChinese tourism is changing the world’s tourism map. The biggest tourism destinations are looking to attract Chinese tourists, with new locations becoming more popular as Chinese visitors decide the best places to visit. As other Asian cities attract more Chinese tourists, experts are concerned that the economies in these destinations are becoming too reliant on Chinese travel.

The figures in the annual MasterCard Global Destinations Cities Index have always seen some fluctuations, but recent years have introduced a defining variable into the mix: Chinese tourists.

China’s emerging middle class and growing numbers of increasingly affluent travellers have created a new tourism market. The big winners in terms of increased Chinese tourism have been some of the biggest cities in Asia. In fact, the recent report shows that the top ten fastest growing cities include cities from most regions of the world, excluding Western Europe and North America.

The report ranks the world’s 132 most popular cities in terms of international visitor numbers and spending. London is still controlling the top spot, but big Asian cities are climbing up in the rankings.
Over 13% of the visitors to these Asia-Pacific destinations were Chinese tourists, the largest foreign tourist group in the region. Five years ago, the figure was only around 6%.
The Tourism Authority of Thailand says that Chinese visitors to the country stood at 4.6 million in 2014. By the end of this year, authorities expect the arrivals to increase by almost 40%.
An increase in Chinese tourism has not meant only an increase in pure visitor numbers, but also surge in the revenue the cities are able to attract from tourism. Bangkok, the Thai city ranking on the top spot in Asia-Pacific destinations, has visitor spending of $12.4 billion. The city is currently growing its visitor spending the fastest, with 11.8% growth between 2014 and 2015.

New Zealand, following a targeted promotional and media campaign made with China Elite Focus in partnership with the Shanghai Travelers’ Club magazine from 2011 to 2013, achieved remarkable results with affluent Chinese travelers arriving at Auckland Airport, and flying in premium cabins. “New Zealand is now seen by China’s elite travelers as the premium destination in Asia-Pacific”, said Pierre Gervois, CEO of China Elite Focus. “We have worked extremely well with Auckland Airport to create the Luxury New Zealand campaign and change the perception of New Zealand in order to attract more sophisticated and wealthy Chinese travelers”.

While Chinese tourism can greatly enhance the economies of these Asian cities, there is growing concern that some of the cities might become too reliant on Chinese tourism.
 
Eric Schneider, Group Head at MasterCard Advisors of the Asia Pacific Region, told gbtimes that tourism bodies must look to appeal a broader audience to guarantee ‘long term resilience’. “You must always be cautious not to put all your eggs in one basket,” Schneider said.
But China’s outbound tourism has still much more room to grow. According to Schneider, around 5% of Chinese citizens currently have passports. In a country with population of 1.357 billion, the potential for more outbound tourism is incredible. “It is inevitable that, as the Chinese middle class grows and begins to travel more often, they make up a bigger proportion of tourists to cities around the world,” Schneider pointed out.

It is certain that the power of Chinese tourists will continue to grow in importance in the coming years. For Asian cities, as well as for other big world cities, it is essential to maintain a diversified economy – not to rely too much on tourism or Chinese tourism particularly – while understanding the potential of attracting this new tourism powerhouse.

Source: GB Times, Krista Lomu

Mandarin speaking sales associates are not enough to attract Chinese affluent shoppers: A good digital strategy is more efficient.

Chinese shoppers- China Elite FocusOver two-thirds of luxury spending by mainland Chinese was made overseas in 2013, an increase from 2012, according to the China Luxury Market Study from consultancy firm Bain & Company released on Monday.
Chinese shoppers often wait for trips abroad, plan shopping sprees to Hong Kong or get friends or specialist “daigou” agencies to bring back luxury items from overseas because they are often cheaper due to China’s high import taxes.
“Sometimes I’ll go to a China store and look online for details about things I’ve liked, or try something on for size I’ve seen online. But when it comes to actually buying it I’ll always get a friend to bring it back from abroad,” said Fang.
China is the number one luxury spender worldwide, making up 29 percent of total global luxury spend this year, according to the Bain report. So Chinese consumers – wherever they may be – are a key battleground for firms from LVMH Moet Hennessy Louis Vuitton SA and Gucci owner Kering Holland NV to trench coat maker Burberry Group PLC , cosmetics giant L’Oreal SA and Cartier watchmaker Compagnie Financiere Richemont SA .
Chinese luxury spending slowed at home in the wake of a crackdown on corruption and shows of wealth, prompting warnings of a sales slowdown from liquor maker Pernod Ricard SA and Volkswagen-owned Bentley Motors and Lamborghini.
Luxury brand store openings dropped significantly in 2013, according to Bain, which estimated China’s luxury market will grow two percent this year versus seven percent a year earlier.

On London’s Bond Street and Fifth Avenue in New York, luxury stores have been getting ready to welcome Chinese shoppers, boosting China know-how ahead of peak seasons such as the week-long Lunar New Year beginning January 31, 2014.
London’s Harrods department store is planning a themed display for the festival, with special products and menus designed for the occasion, it said.
Chinese visitors spent 300 million pounds ($488.34 million) in Britain in 2012, while the British government has relaxed visa rules to attract more people from the world’s second-largest economy.
“Having a strategy for Chinese visitors makes a massive difference. Chinese spending in the UK was up 132 percent in the first half of 2013,” said Jeremy Gordon, London-based director of China Business Services, which helps UK firms target Chinese shoppers.
“That’s obviously going to have a massive impact on your bottom line at a time when overall retail sales are not growing at anything like that rate.”
On Fifth Avenue, jeweler Tiffany & Co said it employs Mandarin-speaking staff. Tiffany has seen strong growth in the China market as the allure of diamonds grows, and said last month that sales at its flagship New York store were driven by Chinese and European tourists.
Around 1.5 million Chinese travelers visited the United States in 2012, a more than five-fold increase from 2005, according to the U.S. Department of Commerce.

“Western luxury brands have now fully understood the necessity to have Mandarin speaking sales associates in their New York and London stores, but it’s not enough. The purchase decision is made well before the trip, when future Chinese travelers are checking their luxury travel magazines on their iPad and luxury lifestyle Weibo pages. The irony of this is even if the sales associates do not speak Mandarin, Chinese shoppers will still buy”  said Pierre Gervois, author of “How U.S. Retail, Travel and Hospitality Industries can attract affluent Chinese tourists”
Saks Fifth Avenue, the department store unit of Hudson’s Bay Co , has a Lunar New Year strategy to focus on beauty products, while the flagship store of Macy’s Inc has a visitor centre with Chinese-language material.
Barneys, meanwhile, is launching its first Lunar New Year-themed marketing campaign in 2014. The department store has increased adverts in Chinese magazines and is testing campaigns around Chinese payment system Union Pay, it said.

Luxury firms are also going online to woo Chinese shoppers. Tiffany has a Chinese engagement ring app while Chanel offers an online make-up “classroom”. Italian fashion house Fendi has held talks on China’s Twitter-like Weibo, while Prada SpA and Christian Dior SA have Chinese videos online.
Luxury travel clubs for wealthy Chinese travelers have also their iPad App: The Shanghai Travelers’ Club has its own App, entirely in Chinese Mandarin, and features articles about US$50M private jets, gold plated hand made laptops, or entire private islands for rent for discerning (and rich) Chinese tourists.
Luxury leather goods firm Coach Inc has a U.S.-focused campaign in Mandarin using popular Chinese social media app WeChat. The app, developed by Tencent Holdings Ltd , has 272 million users worldwide.
Coach tailors some of its U.S. products for Chinese shoppers, a spokeswoman said. Chinese are the fast-growing segment of the firm’s North American tourist sales, which make up a fifth of total sales in the region.
“This trend is going to continue because the Chinese are a lot more integrated in the global economy and really informed, especially about price,” said Bruno Lannes, Shanghai-based partner with Bain and lead author of the luxury market report.
“At the end of the day it comes to the same thing: shoppers will either travel or go online to buy abroad.”

Catering to Chinese travelers: From monogrammed pillows (in Chinese) to tea kettles.

U.S. hotels are catering to Chinese travelersYu Chao Liang and his wife saved a few bucks recently by checking into a mid-price chain hotel in Santa Monica for a two-day business trip from Suzhou, China. But they were not impressed.
In the room, they found no slippers, teakettles or complimentary toothpaste — extras that come standard in Chinese hotels. The hot breakfast bar in the lobby was free but it didn’t include any of the traditional Chinese breakfast dishes they get back home, like rice porridge.
“I can eat almost anything,” Yu said, referring to the breakfast at his hotel. “But I won’t like it.”
In hopes of appealing to Chinese travelers like Yu and his wife, some high-end hotels in Southern California are making big changes such as offering new menus, Chinese-language newspapers, slippers, teakettles and even monogrammed pillows in the room.
It makes sense. Chinese travelers are the fastest-growing segment in the world, thanks to the nation’s thriving economy and new policies to ease travel restrictions. The number of Chinese travelers visiting the U.S. grew to 1.5 million in 2012, a 35% increase over the previous year, according to the U.S. Department of Commerce.

Chinese tourists, on average, spent $5,948 per visit in the U.S. last year, compared with an average of about $4,370 per visit for all overseas visitors, according to the U.S. Travel Assn.
“Our strategy is to provide services that Chinese travelers want and hope they go out and spread the word about the Montage,” said Charles Black, director of sales and marketing at the Montage Beverly Hills, where a standard room is about $600 per night.
The Montage is a member of the Preferred Hotel Group, a collection of more than 650 independent hotels. The group launched a program Thursday to designate members as “China ready” if they meet more than 25 criteria, such as employing a Mandarin speaker to take reservations.
As part of its effort to be China-ready, the Montage this year added several extras to appeal to Chinese visitors such as monogrammed pillows with the word “Welcome” emblazoned in Mandarin. Slippers are standard in all rooms, and teakettles, shave cream, razors and toothbrushes are added in those rooms reserved for Chinese travelers.
Staying at luxury hotels hasn’t typically been important for first-time Chinese visitors, who usually focus their spending on gifts and souvenirs to take back home. Some Chinese visitors get no choice in hotels because they book with tour operators who reserve cheap rooms to better compete against other tour companies.
“Tour operators have to put them in two- or one-star hotels because they are on a budget,” said Haybina Hao, director of international development for the National Tour Assn., the 63-year-old group that represents the country’s tour professionals.
For that reason, managers of luxury hotels say they are targeting “seasoned” visitors who are returning to the U.S. for a second, third or fourth visit and want to enjoy the amenities offered at a high-end hotel. Many of those returning visitors travel to the U.S. on business trips and no longer need to book cheap hotels as part of a tour group.
“These travelers will soon discover the finer properties,” said J.D. Shafer, the newly hired general manager of the Hotel Irvine, Jamboree Center, who plans to offer translated material, Chinese newspapers and traditional Chinese dishes at the hotel.

According to Pierre Gervois, Publisher of Luxury Hotels of America, a travel magazine in Chinese mandarin language read by affluent Chinese travelers coming to the U.S. “Chinese travelers are extremely aware of the quality of service in Western hotel brands. They know which hotels make a real effort to respect and understand their culinary tastes and don’t impose the standard western food for breakfast, for instance.”
The trend of catering to Chinese travelers is spreading across North America.
The Broadmoor hotel in Colorado Springs, the Charles Hotel Harvard Square in Cambridge, Mass., and the Sparkling Hill Resort in Vernon, Canada, are taking part in the “China ready” program with the Preferred Hotel Group.
Other businesses in the travel industry — including theme parks, tour bus operators and shops — have begun to cater to Chinese tourists by hiring translators or posting signs and pamphlets in Mandarin. Even some economy hotels have added extras to appeal to Chinese visitors.
Now luxury hotel owners hope many Chinese visitors are ready to graduate from booking cheap hotels and visiting typical tourist attractions to enjoying the luxuries of high-end U.S. accommodations.
“We try to pamper them as much as we can,” said Mark Podolski, director of sales and marketing for Pacific Palms Resort in the City of Industry. The resort has dedicated an entire floor to Chinese visitors — the eighth floor, a lucky number in Chinese culture — where all rooms include teakettles and slippers.
American hotels that offer such extras will appeal to Chinese visitors, said Hao of the National Tour Assn. But she said first-time leisure travelers who visit the U.S. to shop and visit theme parks will continue to stay at cheap hotels to save money.
“Leisure travelers don’t want to spend that much, but the business traveler may want to check into a high-end hotel,” she said.
Qiang Xu, a Chinese visitor from Beijing, booked a room in a chain hotel in Glendale during a recent trip to shop and see tourist attractions around Hollywood. He said he chose his hotel based on price and location.
But he said he might consider paying more in the future for a hotel room with traditional Chinese amenities.
“I had to make tea with a coffee maker in my hotel,” he complained.

Source: Los Angeles Time, article by Hugo Martin

Korean Luxury retailers welcome Chinese shoppers during “Gold Week”

Chinese tourists in Korea- China Elite FocusAbout 150,000 Chinese tourists are expected to visit Korea during the seven-day Chinese National Holiday from Oct. 1-7,  a 60 percent increase on the year before.

For the past two years, Chinese tourists have been driving Korea’s tourism boom, making up more than a third of foreign visitors.

Various retailers, including department stores, are offering services specially tailored to cash in on the boom in Chinese visitors.

Lotte Department Store is running a “Find the Chinese shopping magnate” promotion, which offers golden pigs, each worth 5 million won, and round-trip tickets to customers who make a certain number of purchases. The store has also doubled the number of employees who speak Chinese, Asia Business Daily reports.

Shinsaegae Department Store is opening K-Pop pop-up stores to showcase famous Korean stars’ products, DVDs, and posters. Hyundai Department Store is launching “K Sales” to attract Chinese tourists, offering 10-20 percent discount to costumers with foreign passports.

Cosmetic brands in Myeongdong district are also offering customized services. For instance, Nature Republic is running advertisements in Chinese for its “The Prime Line” products, which are particularly popular with the Chinese.

An increasing number of Chinese visitors are travelling independently rather than in tour groups.

These independent tourists have a relatively high disposable income and spend more time shopping for luxury brands in Gangnam and Cheongdam districts rather than visiting tourist attractions.

As a result, more and more Korean retailers are increasing services and products aimed at visitors from China.