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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Wealthy Chinese investors are buying cash vineyards, Islands and $170M paintings

Chinese-billionaire-Liu-Yiqian-Shanghai Travelers Club - ModiglianiA hundred years ago, Amadeo Modigliani painted a portrait of his wild British mistress splayed across a red velvet throw, nude, her hips arched, her kohl-rimmed eyes shut. The artist was hardly trying to play it safe – Paris officials promptly shut down the show where the work was first exhibited.

By contrast, the purchase of the painting last week by Chinese collector Liu Yiqian for $170 million was a staid investment and – unlike his bold foray back into Chinese stocks at the nadir of this summer’s crash – much more in line with those of other Chinese billionaires.

If 2008 was the year that the global financial crisis set Chinese wealth flowing across the globe, often in pursuit of dirt-cheap real estate in the United States and Europe, 2015 will be remembered as a year in which private money has been driven out of China and then stranded there while the economy back home adjusted jerkily towards a new normal. And where low interest rates have nudged funds out of banks, continued currency devaluation loomed and a crackdown on corruption has driven wealthy individuals out.

Much of that money has been shifted to property in the U.S., London, Australia, Singapore and Canada. This year Chinese investors surpassed Canadians to become the biggest foreign investor in U.S. residential real estate, spending $28.6 billion in a single year, according to the National Association of Real Estate Agents.

There are also signs that the merely wealthy have joined the ranks of billionaires who bought properties in earlier years.

“The truth is it’s becoming more of a mass market now,” said Maureen Yeo, a General Manager with Fanssmore, a Taiwanese firm that helps connect western developers with Chinese clients. “It’s more about volume.”

While, in the past, Yeo brought clients to 432 Park Avenue in New York, where individual Chinese buyers have scooped up two or three floors worth of apartments for $16 million a piece, and to London’s One Tower Bridge and Royal Wharf, a newer wave of clients is looking for houses at a fraction of that price, leading to more work and less profit for the likes of Yeo.

At the same time those who invested in overseas real estate in the wake of the financial crisis are not selling as prices of their assets rise but are instead broadening their portfolios – moving into different regions, buying different types of property and even investing in the kinds of small and medium-sized enterprises that would be considered high risk back home. For example, Yeo’s earlier clients are investigating investments in vineyards and breweries in Europe. One client just bought a villa on a Greek island. For some, it is the beginning of a plan to bring their money home again, though it’s uncertain when.

“This year is going to be tough and next year is going to be tougher,” Yeo said. “It’s a very cloudy time for us and we just need to wait and see what happens.”

When the global financial crisis hit in 2008, the way Yeo remembers it, elite Chinese investors witnessed markets crashing in Europe and the U.S. and, after years of playing catch-up and being talked down to, had an epiphany.

“The attitude changed and they saw that Westerners were broke but the Chinese had a lot of money,” said Yeo. “So they went offshore to do acquisitions.”

The world’s financial turmoil was barely felt by China. Only a tiny percentage of the population had invested in public markets and the few high net worth individuals who did regarded it as a high risk, short-term investment, balancing their exposure and exiting nimbly at the first sign of trouble. To make up for lost exports the government shored the economy up with stimulus targeting big infrastructure and real estate projects. Private money followed suit, targeting property and branching out to other types tangible assets, including art.

The share of sales going to Chinese buyers at Sotheby’s Asia swelled from five to 40 percent between 2005 and 2012, according to Artnews. Over the same period Chinese collectors established themselves as force in the global art market, bolstering it at a time when it was sagging.

“Chinese art collectors are particularly interested in U.S. and European artists,not that much in Chinese artists”, said Pierre Gervois, Publisher of the Shanghai Travelers’ Club magazine, a publication read by high net worth Chinese. “Auctions houses like Christie’s and Sotheby’s have not yet fully understood that Chinese collectors were interested to buy at auctions in Paris, London and New York, and not very much in Asia. They still have to promote more actively more their prestige sales outside China to Chinese buyers”, Gervois added.

There was so much Chinese money floating around, Yeo’s best year was 2013, well after property prices in New York and London had recovered.

“I had a lot of customers and they were paying in cash,” she said.

Thirty years ago, wealthy Japanese emigres settled here to open the outposts of their newly booming economy. A small wave of Koreans soon followed in their wake.

In New York’s suburbs, most Chinese house hunters flock to the nation’s second-best school district, in Jericho, Long Island, where a well-established Chinese community has transformed neighborhoods, sustaining a network of Chinese agents.

But those who make their way to Westchester are relieved to discover Ng, who produces content for the agency’s website.

“They are happy to see me and of course they rely on me,” she said.

Such clients, said Ng, have a taste for large homes with swimming pools and, as with Yeo’s clients, they pay in cash. Sometimes Ng wonders what would happen if she and her husband wanted to buy in the area in a more conventional manner – with a deposit and borrowings.

“If we wanted to spend just $800,000 and put 20 percent down, I wonder if they would just say, jeesh, nevermind, and turn us away,” she said.

And they probably can. With China’s environment looking inhospitable to the wealthy for some time to come, these sellers are likely to find big-spending Chinese buyers aren’t going away anytime soon.

Source: Article by Zoe Alsop / CNBC, All rights reserved CNBC

Shanghai Travelers’ Club Magazine launches Men’s Fashion new monthly editorial feature

Shanghai Travelers Club - Men's FashionThe Shanghai Travelers’ Club magazine, China’s leading luxury travel magazine for High Net Worth global Chinese travelers, launches a new monthly regular section about Men’s Fashion.

“As Chinese entrepreneurs are becoming more and more international, they are more attentive to their personal style while in business meetings or in corporate events” said Pierre Gervois, Publisher and Editor-In-Chief.

The newly appointed Men’s Fashion Editor, Tyron Cutner, will be in charge of this new editorial feature.  An expert in men’s fashion, Tyron Cutner is a well known fashion adviser in New York City and will bring his expertise and style to the publication.

“I feel proud to be part of the prestigious Shanghai Travelers’ Club magazine. Every month, we’ll share with our Chinese readers the latest trends in Men’s fashion and accessories, as well as the basics that every international gentleman must have in his suitcase when traveling”, said Tyron Cutner.

Every month, starting in September 2015, the Shanghai Travelers’ Club magazine will feature a section providing fashion advice for the modern, style conscious, Chinese businessman.  Wether he’s attending a negotiation meeting in New York City, at a Charity ball in London, or attending a gala dinner in Paris.

According to a survey by China Elite Focus, 74% of Chinese male entrepreneurs and top executives aged 30 to 45 agree that paying attention to their personal style has a positive impact in conducting business.  And a staggering 81% think that they receive a “Disappointing” or “Very disappointing” welcome when shopping in the United States.

“It’s also important that fashion brands realize that they need to substantially improve the way they interact with affluent Chinese customers in the United States. We hope that this new editorial content will encourage U.S. retailers to implement long awaited changes in the customer service towards Chinese travelers”, Pierre Gervois added.

The Shanghai Travelers’ Club magazine is a China Elite Focus Magazines LLC publication withg offices in Hong Kong, Shanghai and New York City.

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

US$264 Billion. (That’s not Finland’s economy size, it’s what Chinese tourists will spend)

Book 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 thanWealthy Chinese Businessman- Shanghai Travelers Club 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%.

“Chinese travelers now massively prefer to shop overseas. Buying a luxury product in Mainland China is seen as “Uncool” and shows that you can’t afford to travel to New York city, Paris or London to buy at the original brand ‘s flagship store” says Pierre Gervois, Publisher of the New York City based Shanghai Travelers’ Club magazine.

Advertisement Tower - Gervois Hotel Rating May 2017 featuring Pierre GervoisOnly 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: Bloomberg.

Costa Rica new Consulate in Shanghai will boost Chinese tourism

Costa Rica tourism

Costa Rican hotel and tourist operators may have to start learning Mandarin if President Luis Guillermo Solís’ administration makes good on a goal to court more Chinese tourists. Solís made the statement during his trip to Beijing.

The president, who met with Li Jinzao, director of the China National Tourism Administration, said that tourism is one of the strategic priorities of the two countries’ relationship. Solís said Costa Rica would work with the Chinese government to establish a direct flight from China to Costa Rica and announced the opening of a new consulate in Shanghai.

Costa Rica plans to work with China to improve the number of Mandarin speakers at Costa Rican tourist outfits and extend an invitation to Chinese tourism businesses to participate in the next EXPOTUR trade show in early May, according to the statement from Casa Presidencial.

Foreign Minister Manuel González said the new consulate will help expand the country’s image as a tourist destination and diversify the mix of countries that sent 2.4 million tourists to Costa Rica in 2013. Costa Rica’s travel sector was hard-hit by its strong dependence on U.S. tourists during the financial crisis of the late 2000s.

According to Pierre Gervois, Publisher and Editor-in-Chief of the Shanghai Travelers’ Club magazine,” We have worked with the Costa Rica Embassy in China since 2013 to define the best way to attract High Net Worth Chinese travelers to this beautiful country. Costa Rica has amazing experiences to offer for discerning Chinese tourists.”

Increasing purchasing power and fewer travel restrictions have made Chinese travelers one of the most coveted demographics for tourist destinations. China has become the world’s largest source of international tourists, who spent $129 billion on travel in 2013, according to the World Tourism Organization. But Costa Rica has yet to tap into this market. In 2014, only 6,734 Chinese tourists flew into Juan Santamaría International Airport, according to figures from the Immigration Administration.

Chinese tourists require visas prior to their arrival in Costa Rica, but this process is less intensive now than in years past, said Andrea Quesada, press spokeswoman at the Immigration Administration.

New Five year multiple entry visas for Chinese travelers going to Japan

Japan_Double_Transit_Visa

Since January 19, the Japanese government has extended the validity of multiple-entry visas for Chinese tourists from three to five years. The tourists will also have unrestricted travel throughout Japan.
The move aims to attract more Chinese visitors, who are playing an increasingly important role in bolstering consumer spending and economic growth in Japan.
Hitomi Takahashi is the manager of a sales division at the branch of the Japanese cosmetic maker Shiseido company at the luxurious shopping district in central Tokyo Ginza.
She says:
“This shopping street brings together visitors from across the world and Chinese consumers account for more than 70 percent of them. We have Chinese salespeople in our shop and we also have several Chinese interpreters so that we can communicate with Chinese tourists.”
The yen’s slump to a seven-year low against the U.S. dollar and other currencies is also broadening the country’s appeal globally.
Japan’s Ministry of Economy, Trade and Industry estimates that some 2.2 million Chinese visited Japan in the first 10 months of 2014, contributing more than a third of the total spending by foreign tourists.
According to the Japanese Tourism Agency, the average Chinese tourist spent about 2,000 U.S. dollars last year, more than three times as much as visitors of other nationalities. But according to the Shanghai Travelers’ Club magazine the average spending of an affluent Chinese visitor to Japan would be closer to 18,000 U.S. dollars. According to Pierre Gervois, Publisher “We know that a lot of luxury goods bought by Chinese tourists in Japan are paid in cash, and the real spending figures are always higher that the official statistics”
Chinese tourists said the main appeal of Japanese products is their perceived superior quality and lower prices.
“I came to buy some electronics, including cameras and cellphones, and also clothes, items for daily use and cosmetic products because the exchange rate has dropped recently. Some of my friends go to school here and they often go back to China with bags of purchases. I think maybe the reason that people come here to buy is that prices in our country are higher.”
The Japanese government plans to further expand the range of goods exempt from consumption tax for foreign tourists, possibly to include cosmetics, food and alcoholic beverages in the next fiscal year. Analysts believe the move is likely to lure more foreign nationals and help buoy the recession-bit economy.