Mr. Poimiroo

Cultural Tourism

China, from Exclusion to Inclusion

By John Poimiroo, Principal, Poimiroo & Partners

There was a time in the past century when the United States government discouraged the Chinese from entering the country. Chinese immigrants were detained at the United States Immigration Station on Angel Island in San Francisco Bay until they either gained approval to enter or were deported, while immigrants from other Pacific nations entered with greater ease. The Chinese will be returning to Angel Island in February, when the U.S. Immigration Station reopens, but this time, as welcomed visitors to the United States of America.

In response to increasing financial and cultural ties between China and the United States, both countries have eased travel restrictions. The China National Tourism Administration (CNTA) and U.S. Department of Commerce recently announced a Memorandum of Understanding (MOU) which is intended to boost travel between the two countries and serve to "strengthen relations and forge new friendships." The MOU opens China's growing market to U.S. travel and tourism industries with a push toward expanding group leisure travel from China to the U.S. CNTA Chairman Shao Qiwei sees it as broadening exchange and cooperation between the countries in economic, cultural and air service areas.

Enthusiasm for the agreement was expressed by Alexander Glos, i2i China CEO, a leading travel consultancy and representation firm based in China, who called the announcement, "a new era in China-USA tourism that will change the face of the industry and be the single largest impact to inbound USA tourism in the coming five years." Clearly, i2i China has much to gain by the two countries improving the ease by which their citizens can travel back and forth.

China is now the fastest growing travel market in the world and, beyond Asia, the United States is the top destination of Chinese travelers. 100 million Chinese are projected to travel abroad by 2020, with Chinese travel spending is expected to be the second-fastest growing in the world at close to twice the global average, according to the U.S. Department of Commerce. Jamie Lee, director of LA Inc.'s (the Los Angeles Convention & Visitors Bureau's) China office anticipates that tourism from China will grow 50 to 100% to her city in the next four years, describing the recent U.S./China opening in travel as "huge."

Just do the math. The U.S. has 300 million residents, while China has 1.3 Billion, 230,000 of which are millionaires. Now that it is easier to visit the U.S., the next wave of tourism will come from China. U.S. destinations familiar to the Chinese will benefit first. California now receives 61.6% of all Chinese travelers to the U.S. and is experiencing rapid growth. In the past four years Chinese visitation as having grown 277%, according to the California Division of Tourism, with nearly eight out of ten Chinese leisure travelers reporting California as the main destination of their U.S. trip. In the last year measured, tourism from China to California grew nearly 35%. More people from China visit California today, than from France. Add Taiwan and more Chinese visit California than Germans, Australians or South Koreans. Only the U.K. and Japan send more of their citizens to California than China. "Being able to visit America is a dream come true for the Chinese," says Ms. Lee. "They have watched our country in movies and on television all their lives and now have the opportunity to visit and return to show and tell others of what they've seen, where they've been."

Until recently, the Chinese have had one of the shortest time frames from airline reservation to departure date (median = 15 days), compared to 80 days for the British. That short fuse has, in part, resulted from the uncertainty the Chinese have had regarding obtaining visas to enter the U.S. According to the American Chamber of Commerce in the PRC, It can take up to 20 days to obtain an interview to obtain a visa, which means travelers requesting visas two months ahead of their trip, don't book their flights until they obtain the visa. When you put that in context, the Chinese plan their trips with about the same advance as the British. Only, they often aren't certain to obtain a visa until shortly before their departure. The recent issuance of multiple trip one-year visas is now making it easier for the Chinese to visit both for business and leisure purposes. Past difficulty in obtaining visas has kept Chinese from attending meetings and conventions in the U.S. Considering that the Chinese are more likely than any other nationality to travel to the U.S. for business (59%) or to attend a convention (20%), past delays have suppressed U.S. revenues from Chinese business travel.

Blogger Jian Shuo Wang, wrote that prior to a Microsoft Most Valuable Professional Summit held in Seattle, many MVPs from China were invited but almost none attended, because he perceived them to be unable to interview in time to receive a U.S. visa. None of those applying to attend eBay Live got a visa, according to Mr. Wang, who described cultural misunderstandings between the Chinese and Americans as further aggravating the visa process. One high ranking official was reported to have been insulted when asked to remove his shoes and belt in order to pass through metal detection equipment, feeling as if he was being identified as a possible terrorist.

Although the visa process is not meant to exclude the Chinese, as did the Chinese Exclusion Act of 1882 that resulted in Chinese immigrants being detained on Angel Island, the end result has been that American business and leisure visitors from China often perceive being belittled by the process and procedures used to assure that the few who intend to reside in the U.S. do not gain admission under the guise of traveling to the U.S. on business or vacation. For many years, that has been a principal concern of the U.S. government, particularly relative to nations with weak economies. However, today, 59% of Chinese travelers to California come to do business and they have the highest average daily expenditures ($161) of any nationality ($2,270 in spending per visitor in California, twice Japanese spending).

The Chinese love to shop for authentic brands, says Ms. Lee, "Isn't it weird? We go there and buy fake things and they come here to buy the real stuff, name brands like LV (Louis Vuitton), Coach and Tommy (Hilfiger)." She says they expect to find authentic brand names here, but when it comes to souvenirs, "They don't know what to buy." As, no one tells them what's authentic or distinctive about the destination that would make a "good" souvenir (i.e., Oakley sunglasses, fine wine, Vans shoes, Hobie shirts or seasoned almonds in California). So, Ms. Lee explains, they're often at the mercy of their tour operator who might have an arrangement with a store filled with cheap t-shirts or disappointing trinkets.

For years, Chinese tourism has been seen as being cost-focused, ignoring value in search of the lowest price. That occurs mostly because the Chinese are at a disadvantage in not knowing the value differences between a tour that costs 20,000 Yuan that is centrally located at nice property, from one priced at 18,000 Yuan at a lesser quality hotel far from downtown. This suppresses prices, as tour operators seek to offer competitive prices, regardless of value or proximity to the destination. One international hotel sales manager at a top San Francisco luxury property said it's not uncommon for a Chinese buyer to ask for a $180 rate for a room that otherwise sells for over $300. Considering that the cost of a four-star or better hotel room in Beijing is not much different from a similar property in a major U.S. city, she is baffled as to why Chinese buyers expect "Courtyard prices for a luxury room." And yet, hoteliers are finding that Chinese travelers are not necessarily obsessed about traveling on the cheap.

Nyna Cox who represents the Inn Above Tide in Sausalito says one Hong Kong guest "spent over $100,000 at the hotel, last year. He always books the most expensive suite and often a second or third room for family members, colleagues and assistants. He rarely stays less than five days and has stayed as long as two weeks." Ms. Cox says her marketing communications agency (Grace Marketing) actively pursued Asian journalists and TV crews for the 29-room inn during the past three years, the result of which "speaks to us very clearly that Asian PR efforts pay off." Of note in Ms. Cox's comment was that her Hong Kong guest often books additional rooms for family members.

California found that the Chinese "leisure" groups are more likely than any other nationality, to include children (40%). That occurs, in part because four in ten Chinese travelers come to California is to visit friends and family. As a result, just 50% of all Chinese visitors to California stay in hotels, compared to 84% for the British. Other than business or convention travelers, group travel dominates the market. F.I.T. is still in its infancy though some predict it will expand within five years as 20 to 30-year-olds earn the disposable income to travel abroad. One of the most popular group trips among Chinese leisure travelers, surprisingly, is by car. "The Chinese love to drive our roads," says Ms. Lee. "Chinese highways are not as developed as ours are with rest stops, service stations, convenience stores and restaurants, so driving here gives a great sense of freedom and service, and provides opportunities to see our cities and landscape. On these tours, four people ride in each car, each having opportunities to drive. There could be up to 20 cars in one of these group tours. It's very trendy."

Fly/bus tours to famous sights are still the most popular among Chinese travelers over 40. "It's like us going to see the Great Wall. It's where the Japanese were 20 years ago... traveling to San Francisco, Los Angeles, New York, Washington, DC, Las Vegas and Honolulu and a couple of the most famous national parks (Yosemite and Grand Canyon)," says Ms. Lee. It is the 20 to 30-somethings who are the most adventurous and willing to stay a week to explore a destination, but they also lack the resources to travel outside of China. Younger travelers are more likely to book online, using Chinese online travel agencies. Increasingly, older Chinese travelers are using the Internet to book their trips, so having a relationship with a Chinese online travel agency is important.

Chinese business and frequent travelers have come to understand the value of brand and know the differences between Westin, The Four Seasons, Marriott, Sofitel and others. Ms. Lee expects a shift to higher end properties, as Chinese travelers become more familiar with the values they deliver. She recommends these steps to becoming known as a hotel company that welcomes Chinese travelers. Put slippers and hot drinking water with green and other teas in rooms; these are expectations in China. Have a Mandarin-speaking person on staff to ease communications difficulties. A nicety would be to offer bathroom amenities, such as a dental care kit (toothbrush, toothpaste, mouthwash, floss), often placed in Chinese hotel rooms. The Chinese are not accustomed to tipping, so it's helpful to include a welcome pamphlet in Chinese that explains such expectations and necessities, such as how and where to use western toilets. Do these and you'll become known as welcoming Chinese visitors.

One of the best ways to get your hotel or destination on a Chinese must-stay/see list is to be written about in one of the two dozen or so travel publications distributed throughout China. In Beijing, National Geographic, Travel & Leisure and Voyage are the top three, with license agreements with their U.S. counterparts. Properties like the Hotel Palomar in Arlington, Virginia, across the Potomac from Washington, DC's famous monuments and museums, have stories to tell in these publications, as will Angel Island State Park in San Francisco Bay on the President's Day weekend in 2009, when Chinese travelers (led by friends and relatives) begin visiting the location where their ancestors first landed in America. On that weekend, the United States Immigration Station on Angel Island will reopen, after years of restoration. Visitors to this "Ellis Island of the West" will move from station to station, experiencing what Chinese immigrants faced upon arriving in America. Through interactive exhibits, they will follow the path those immigrants took to enter the U.S.

This time, the experience will not be of exclusion, but of inclusion, as Americans and Chinese travel together, better understanding what happened and what we can take from it.

John Poimiroo has had a 30-years in travel and tourism marketing and public policy. He directed marketing and public relations programs at ski areas, attractions, national and state parks, hotel companies and destinations. He was California's tourism director in the 1990s. He is credited for conceiving the California Tourism Marketing Act and helping shape the law authorizing California Welcome Centers. He assisted the chair of the President's Advisory Council on Historic Preservation in establishing the California Cultural Heritage Tourism Council and continues as an advisor. Mr. Poimiroo can be contacted at 916-933-8860 or john@poimiroo.com Extended Bio...

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