In less than a decade, the understanding of U.S. travel suppliers and DMOs regarding travelers from China has dramatically shifted from one that was perceived to comprise low-cost group tours that went after souvenirs and tchotchkes at discount shopping malls to one of independent travelers in search of experiences that they’ve fully researched online and who expect luxury goods to be available for purchase.
In fact, Evan Saunders, founder of Attract China, told delegates to NAJ’s recently convened RTO Summit West in Marina del Rey, Calif. that, in two-and-a-half years, two thirds of Chinese visitors are now independent travelers—a stunning turnaround from a decade ago, in 2005, when the segment was “next to nothing.”
Before a packed house, Saunders led off a panel session staged under the rubric, China! China! China! The Year of the Repeater!, that also included Sheena Yu, director, China Services, Los Angeles Tourism & Convention Board; Sherman Liu, president, DTE Travel, El Monte, Calif.; Jane Chang, general manager, Best Western Plus Executive Inn, Rowland Heights, Calif. Jeff Hentz, chief advisor for the NAJ Group, moderated the session. Following are excerpts from the Saunders presentation, and then the panel discussion.
Evan Saunders
- Chinese travelers are “spending a huge amount of money,” said Saunders—there was a 20 percent increase, year-over-year, in 2014, when they spent nearly $170 billion, which is larger than the GDP of some two-thirds of the world’s nations.
- Chinese travelers are unique. They have their own approach to the process. They have their own Internet channels because many channels, such as YouTube, are blocked by the Chinese government.
- “You need to get on Chinese channels!” This is important, because, for instance, 70 percent of Chinese travelers find hotels using the Internet and, as of 2013, 55 percent of adults online use messaging site Weibo—vs. only 8 percent of online adults in the U.S. who use Twitter. (BTW, if u want 2 C if ur site is banned, go 2 GreatFireWallofChina.org + C if ur site loads. If not, u need help.)
- A key trend is how they spend. The trend is toward independent, exotic, experiential and luxury—the Chinese consumer/traveler is the world’s number one luxury consumer. They like “super-luxury tours,” i.e., “no one else can get to these destinations.”
- Independent travelers are younger, educated, Internet-savvy, wealthier, stay longer in cities, spend more and, when in the U.S., want to eat what Chinese cannot eat at home.
- Students in the U.S. are a market of their own. More than 300,000 Chinese now study in colleges in America. In Boston, where Active America is headquartered, Chinese students there want to go to New York, Washington D.C. and other cities
- Some of their holiday travel coincides with their holiday calendar. For instance, Saunders pointed out, while the Chinese New Year holiday (Feb. 19th this year) might be acknowledged in the U.S., it is huge in China. The new traveling Chinese population like to visit family—even in the U.S.—during holiday periods. It’s easy enough to search for Chinese holidays and fine tune your marketing efforts accordingly.
- The ease and cost of traveling to the U.S. is something mentioned by all panelists, Saunders included. The most significant factor in this regard was the decision last November by the Chinese and U.S. governments to extend the period of validity of visas from one to ten years for tourists and from one to five years for students.
- The visa validity deal, along with additional consular staff to review visa applications is already leading to record numbers of visa holders who will use—and now re-use—their visas to travel to the U.S. And because Chinese have smaller families than do other nationalities, they are more flexible in their ability to travel; i.e., they are likely to be repeat visitors if they have a good travel experience.
- Airlift to and from China has increased dramatically. The number of non-stop, direct daily flights to the U.S. from China has nearly quadrupled (from 16 to 44) since 2011—not to mention the increase in connecting flights through points such as South Korea, Japan and Canada. And the cost of flights is inexpensive. Saunders cited a Boston t0 Beijing flight priced at $750.
- For payment settlements, there is nothing like UnionPay. Known as a cash payment culture—even into the 21st century—China’s consumers now overwhelmingly use the UnionPay card, which was created in 2002. It has become the largest credit card/debit card in the world, and now has 95 percent of the Chinese market. Make sure your business or your destination accepts UnionPay, and let Chinese tour operators and their customers know that you accept it.
- The social network participation in China is huge, far greater that it is in the United States—both in percentage of the population involved, as well as in hard numbers. And this takes place in the absence of Facebook, Twitter and other social network sites known well in the U.S. and other parts of the world. Instead, China has its own network. It’s worth the help to learn how to promote yourself or your destination through this channel.
- While Saunders also had tips as to how to host your Chinese customers and guests, he closed with a simple encomium of advice: “They don’t want you to ‘Chinesify,’ they want an authentic experience.”
Sherman Liu
Stressed that, even though most Chinese visitors are emerging as an independent traveler market, there “is still a huge market for group tours.” U.S. travel suppliers and receptive, he explained, have to diversify their range of products and services, and promote unique features that will attract Chinese travelers by offering “ things individuals can’t do alone – like summer camps, trading programs, training programs, lectures, medical tourism …”
Jane Chang
A hotelier, Chang focused on specialized aspects of serving and pleasing Chinese visitors: make sure every room hosting a Chinese guest has tea bags, a hot water pot, real Chinese food and slippers. Hotels should “create an experience” for the visitor and, she explained in language that needed no interpretation, make it such that “even a bird won’t ****in the place.” Catering to the well-known desire of Chinese visitors to shop till exhaustion, she makes sure that Chinese guests can go to a nearby Costco warehouse for items that they won’t find at home. Also, she advised delegates that they should give Chinese visitors an opportunity to do some shopping on their last day—their day of departure—because Chinese travelers “always fly at midnight” and, so, have lots of free time on their last day in the U.S.
Sheena Yu
Yu gave a fairly detailed presentation on what the Los Angeles Convention and Tourism Board—it is essentially the “home town” tourism bureau for Marina del Rey, the host community for the Summit—has been undertaking to accommodate the growing influx of visitors from China, which surged from nowhere to become the number one overseas source market for Los Angeles in 2013. And since then, she noted, traffic has increased another 20 percent. Yu gave delegates a glimpse into her bureau’s China Ready program, an explanation of its Chinese language website and its promotional activities both in China, among the numerous receptive tour operators based in Los Angeles and through U.S. and international travel trade channels.
Q&A
- Asked by Julie Johnson, chair, Heritage Corridor CVB in Illinois how small hotels are handling the increase in Chinese travelers, the panel offered up the following: Saunders said that small hotels are benefiting from Chinese travelers and the BnB properties, in particular, offer a unique American experience; Hentz suggested that BnBs and vacation rentals fare well among travelers making their second visit to the USA; and Liu also indicated that his Chinese clients look for BnBs and smaller, more intimate resorts and are willing to pay a lot of money for the latter.
- When Hentz raised the notion of what Los Angeles might be doing regarding the large number of Chinese in the USA who depart use LAX, Yu pointed to her bureau’s Chinese website as well as Chinese websites that are opening their own brand to welcome U.S. visitors. Saunders expressed the opinion that “hopefully, the goal is that the Chinese want to come back to America.”
- After Hentz asked about dealing with the difference between Fully Independent Travelers (FITs) and Partially Independent Travelers (PITs), Yu said the key determinant for the partially independent travelers is the tour package and what it does or does not do. If a traveler can do a two-or-three day tour package that has the discounted rate associated with package product and still maintain flexibility for the traveler, there is no issue.
- Allison Raskansky, senior vice president, business development, Speed Vegas World Class Driving, asked the panel if Chinese travelers gather and share travel experiences heavily as travelers do on TripAdvisor and Yelp. Two of the panelists took note of the power of the review and discussion site WeChat.
Sherman Liu explained that China’s WeChat “is powerful” and it is a place where travelers “share experiences … good and bad.” They share pictures of hotels they stayed at, he noted, pointing out that Chinese travelers book hotels and restaurants based on comments on WeChat. Sheen Yu reminded delegates that WeChat is powerful if because of the fact that there are 800 million mobile users with Internet service in China –that’s 65 percent of the country’s population – and 80 percent of them use WeChat. (That’s twice as many WeChat users as there are people in the USA.) Last year, she said, 134 million products were purchased on Internet in China. And many are driven by the slogan: “I can’t live without WeChat.”
- When the matter of the reach of China’s UnionPay card came up, Hentz asked Saunders how complicated it was to get and use UnionPay. Saunders said it was easy enough that his firm sets up businesses to use UnionPay practically for free.
- Finally, when one delegate brought up the question of the best source for meeting Chinese tour operators and developing new business from China, Hentz recommended NAJ’s Active America-China Summit next month (April 7-9) at the Bellagio in Las Vegas. An annual product development show that brings together top Chinese tour operators with invited suppliers and destinations to develop new tour opportunities, it was begun in 2009. The problem is, Hentz explained, that the show is already sold out. However, NAJ is exploring the possibility of developing a portable “China Ready” program that it could move from city to city to educate and familiarize U.S. travel suppliers and DMOs with the China market.
