Category Archives: California

Chinese tourists spend more than $1Billion in Los Angeles last year.

Shanghai Travelers Club magazine - March 2016 coverChinese tourists have been making their presence felt around the world but one place they can’t seem to get enough of is Los Angeles, California.

780,000 Chinese tourists visited L.A. last year, spending more than $1.1 billion. Last year also marked the first year that China overtook Canada as the city’s second-largest source of international tourists.

Los Angeles has long promoted itself as a tourist destination in China, and was the first city in the world to open a tourism office in the country in 2006. At the time, China was not even in the top 10 of international visitors to Los Angeles.

“Chinese visitors are spending more money than others, and they are staying longer,” said Ernest Wooden Jr, president and CEO of the Los Angeles Tourism and Convention Board. “They are one of our best visitors, and that’s why we have such a focus on our marketing efforts in China.”

To that end, aggressive marketing efforts called “China Ready” and “Nihao China” are currently targeting cities like Beijing, Shanghai, and Guangzhou in order to boost numbers even more.

Lisa Pisaturo, director of international and domestic tourism sales at Universal Studios Hollywood, said she expects the number of Chinese tourists to continue to grow.

“We experienced double-digit growth over the last year, so that’s an indication to us that it hasn’t really affected the groups that are traveling,” she said. “The middle class and affluent Chinese families may spend less on shopping, but it sounds like, from everything we hear, that there are still big groups that will be traveling.”

In 2014, about 7,000 Chinese tourists visited Orange County in an eight day trip, breaking records at the time. The event was estimated to have earned $85 million for the Anaheim area in which the 7,000 attendees had filled 13,000 to 14,000 hotel room at some 30 area hotels.

Even Los Angeles fashion brands like Sharpe have now Chinese fans: The Cover of the prestigious Shanghai Travelers’ Club magazine of this month’s issue (March 2016) is about Sharpe and features a full story about this brand created by Leon Wu in Los Angeles.

Source: Charles Liu, The Nanfang & China Daily / Chinese tourists blog

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More Chinese buyers for California Real Estate

Chinese family invest in US real estateIn January 2015, President Obama announced a new plan to further open the American door to the Chinese and predicted that this new visa agreement could inject billions of dollars into the U.S. economy. “Under the current arrangement, visas between our two countries last for only one year. Under the new arrangement, student and exchange visas will be extended to five years; business and tourist visas will be extended to ten years,” said President Obama at the Asia-Pacific Economic Cooperation summit in Beijing.
Prior to this agreement, Chinese citizens had to renew their American business, tourist, and student visas annually. This visa regulation for travel from China to the U.S. was “one of the biggest stumbling blocks” for Chinese buyers of U.S. real estate, said Simon Henry, co-chief executive of www. juwai.com, China’s largest international real estate website. According to the White House, 1.8 million Chinese tourists visited the U.S. in 2013, generating $21.1 billion to the U.S. economy, and with this new visa law, up to 7.3 million Chinese visitors are projected to visit America in 2021, contributing roughly $85 billion per year to the U.S. economy, predicts U.S. Secretary of Commerce Penny Pritzker.
But what impact will this new visa law have on the real estate market here in Silicon Valley? We predict the local real estate market will receive a further boost as a result of the new U.S./China visa agreement. The new business and tourist visas will encourage more Chinese to travel to the U.S. and stay for longer periods of time. Likewise, with the extension of student visas, more Chinese parents will consider sending their children to U.S. schools. For these Chinese, having a permanent place to live while working or studying will be important.
GERVOIS magazine Advertising and sponsored content opportunitiesFor years, many affluent Chinese looked to U.S. real estate due to its stability and diversification. The new visa agreement will encourage those on the fence to consider taking the plunge and investing in U.S. properties. Not only will it be easier for them to come to the U.S., but it will also be easier for their friends and family to make frequent visits. Given our thriving local economy, appreciating real estate market, excellent schools, and great weather, Silicon Valley properties will be serious considerations for these folks. Moreover, Silicon Valley properties are considered reasonable compared to those in Shanghai or Beijing. “International buyers…are often surprised at how reasonable our prices appear,” says Ken DeLeon, founder of DeLeon Realty.
While the new visa agreement will likely contribute greater investment into the U.S. market, China’s strict currency regulations remain in effect, and we have seen enhanced enforcement by the Chinese central government over the past six months. These regulations prevent large amounts of currency from moving out of China. For example, Chinese nationals are allowed to transfer the equivalent of U.S. $50,000 per year into a foreign bank account. Given the hot, all-cash, non-contingent real estate market in Silicon Valley, buyers from China looking to purchase properties in this area should plan ahead and care should be given to ensure compliance with all U.S. and foreign laws. Additionally, these buyers should be prepared to provide proof to sellers that the funds are available. Along the same vein, sellers and agents should request for proof of funds with the offer letter to ensure that the buyers have the ability to close on time. Furthermore, when verifying funds, listing agents must understand the significant differences between the rules that apply to mainland China and to Hong Kong, which is classified separately as a special administrative region.
Gervois magazine - Marriott Hotels“California Realtors must also be aware that most of Mainland Chinese investors interested to buy U.S. properties over $5M will use funds coming from Caribbean banks or Switzerland banks, to avoid the Chinese regulations on currency control”, said Pierre Gervois, CEO of China Elite Focus Magazines LLC, the publishing company of the Shanghai Travelers’ Club magazine, a publication for the wealthy Chinese.
The market for Chinese investors in the U.S. is therefore much bigger than “official” forecasts. It’s time for Realtors to be proactive with Chinese buyers and increase their presence in Chinese media.

References:
1. Kenneth Rapoza, “Obama’s New Visa Law Seen Helping Chinese Buy U.S. Real Estate,” http://www.forbes.com, November 14, 2014.
2. E. Scott Reckard, Andrew Khouri, Hugo Martin, “New Visa Rules Expected To Boost U.S.-China Tourism, Investment,” http://www.latimes. com, November 13, 2014.
3. Ken DeLeon, “Worldwide Real Estate Impact On Silicon Valley,” DeLeon Insight, September 2014.
4. Pierre Gervois, “How U.S. Retail, Travel, and Hospitality Industries Can Attract Affluent Chinese Tourists” , June 2012, China Elite Focus Editions. ASIN: B008L98Q3U

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Average Chinese Tourist Spends $6,000 per California Visit

wealthy Chinese - Shanghai Travelers ClubAccording to the California Travel and Tourism Commission, Chinese tourists’ average spending of $6,000 per person during a trip to the US is the highest in the world. Wide selections of designer’s bags and shoes drive Chinese to California on shopping sprees. A 7,000-member Chinese tour group traveled to California last summer, and each member spent $10,000 on average during their one-week stay.
The biggest driver of this growth appears to have been the visa policy approved by Chinese President Xi Jinping and U.S. President Barack Obama in 2009. At the Asia-Pacific Economic Cooperation meeting in November 2014, the two leaders agreed to extend tourist visas to 10 years and student visas to five years.
Following the November agreement, U.S. consulates in China have recorded a 68 percent increase in visa issuance, indicating a spectacular increase in the plans for Chinese to visit the U.S. in the future, with most coming at least initially to California.
At the fall 2014 “Visit California Outlook Forum” attended by over 500 California tourism industry professionals at La Quinta Resort in Palm Springs, experts predicted that Chinese visitors will spend $2.2 billion in California in 2015 and 2016.
The China Daily reported that Kathryn Smits of International Tourism at the Los Angeles Tourism and Convention Board told the Forum that airline service between China and California major gateways of Los Angeles and San Francisco has increased 44 percent.
Chinese airlines have added new direct flights from Los Angeles to cities in China or plan to add flights due to the availability of Chinese-language services to assist travelers. In July, Air China will add a third daily direct flight from Los-Angeles and Beijing and China Eastern Airlines will start direct service to Hefei, in southeast China. Both airlines credit the relaxed visa policy for accelerating growth. Famous Chinese luxury travel magazines, such as the Shanghai Travelers’ Club magazine, publish more content about California as it’s seen as a U.S. “premium” destination for wealthy Chinese.
Gervois magazine - The new travel magazine for millennials travelers in the United StatesThe Beverly Hills Visitor Center commented that more than half of the premier stores in Beverly Hills now employ Mandarin Chinese-speaking salespersons. Most stores in Beverly Hills stores accept China’s Union Pay credit card. Five-star Beverly Hills hotels now feature Chinese-style breakfasts and house slippers year round. The Visitor Center also provides shopping maps and discount coupons printed in Chinese.
Well-heeled Chinese tourists seem to like what they have seen on their visits to the Golden State. Southern California real estate agent Le Yuan told the China Daily that he had seen a double-digit increase in clients this January. Many Chinese clients can fly here to see the houses and neighborhood,” Le said. “Travel is just so easy.”

Source: Breitbart

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Beverly Hills rolls out red carpet for Chinese tourists

Julie Wagner -Beverly Hills - Shanghai Travelers Club

Chinese New Year is coming to Tinseltown, again. But this time in an even bigger way.

The Beverly Hills Conference & Visitors Bureau (BHCVB) announced Thursday that the city is going to stage a month-long celebration of Chinese New Year starting Feb 1.

It will be the fourth annual Chinese New Year celebration in Beverly Hills. This year, through a partnership with China International Culture Association, Beverly Hills will feature internationally acclaimed entertainment from Beijing in a special one-night event on Feb 1 at Saban Theatre, which will serve as a kick-off of Happy Chinese New Year – Beijing Culture Month.

The program will feature notable acts from the Beijing Performance & Arts Group, including acrobats from the China National Acrobatic Troupe and a Peking Opera piece performed by renowned artist Chen Junhua.

Musical acts will include a pipa solo by Zhou Hui, an erhu performance by Song Fei, known as China’s “Queen of the Erhu”, and a performance by China’s violin master Lu Siqing, among others.

Che Zhaohe, culture consul of China’s Consulate General in Los Angeles, announced that a photography exhibition entitled Charming Beijing, Passionate Winter Olympics will be on display at the same time at the Saban Theatre, featuring 60 images captured in Beijing by world-renowned photographers, including American photographer Joe McNally.

Che also said that China’s intangible cultural heritage will be represented by Tu’er Ye figures, Zhang clay sculptures, Yu family kites, cloth paste paintings and ancient Chinese toys such as the Mao Hou, a tiny monkey shaped toy made with plants and cicada shells.

“It is an honor to have such remarkable talent travel all the way from Beijing to share their inspiring performances and art as we celebrate Chinese New Year 2015 and the Year of the Sheep,” said Julie Wagner, CEO of BHCVB.

GERVOIS magazine Advertising and sponsored content opportunitiesAs the new visa policy applies, Wagner expects to host more tourists from China during this Chinese New Year holiday. She said participating hotels in Beverly Hills will offer special packages to Chinese guests throughout the month of February. The packages will welcome guests with popular Chinese amenities such as in-room hot water kettles with Chinese tea, Chinese newspapers, slippers and Chinese breakfasts.

In addition, most Beverly Hills hotels and stores will have Mandarin-speaking staff on-site and the visitors’ center will provide walking maps and directories in Chinese. The city’s website has a Chinese version and most stores accept Union Pay.

“We want Chinese tourists and local Chinese residents to feel at home during this family-oriented and most important holiday of the year,” said Wagner. “This is just one of the ways to show our appreciation to the Chinese people who bring business to Beverly Hills. We also want to take this opportunity to enhance our friendship with China as always.”

“The new visa policy will help to promote cultural exchange,” she said.

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California expecting more affluent Chinese shoppers

Chinese shoppers - Luxury Hotels of AmericaCalifornia’s No. 1 market for overseas visitors is China, said Caroline Beteta, president and CEO of Visit California, a non-profit geared toward maintaining and developing tourism marketing programs in the state.  She said Chinese tourists spent more than $1.6 billion in 2012, and spending levels are expected to increase, with China’s growing middle class and the easier access to visas for U.S. travel.
“We’re seeing a trajectory on China that is once in a career or lifetime,” Beteta said.
And it’s that growth that many tourist attractions and venues want to capture in sales.
Beteta’s non-profit hosted a forum at the Langham Huntington hotel in Pasadena on Wednesday, where more than 460 people gathered to discuss tourism issues, including how to better cater to Chinese travelers.
The tourists are coming from large metropolitan Chinese cities like Shanghai and Beijing, as well as second-tier cities like Qingdao, Hangzhou or Chengdu.
Reports  show a growing interest from affluent Chinese nationals to invest in American real estate, business and send their children to the U.S. for study. Additionally, Chinese millionaires tend to be on the younger side. The average age of a millionaire in China is around 37, compared to 57 in the U.S.
One key factor is also how much money tourists from China spend – an average $170 a day in L.A., which compares with tourists from other locales spending an average $163 in L.A.

But how to convince affluent Chinese tourists to choose a U.S. destination versus another? Chinese travelers have their secret weapon in their iPad. Several digital travel magazines entirely in Chinese mandarin are now published for the famous Apple tablet, and have a tremendous impact on how Chinese tourists plan their trip to America. Publications like Luxury Hotels of America, Niuyue Mag, or the Shanghai Travelers’ Club have gained tens of thousands of new readers over the last year. According to Sam Wang, a Shanghai businessman traveling three to four times a year to the U.S. “I read Luxury Hotels of America before choosing a hotel because they have a high quality editorial content about hotels that I can’t find in regular travel websites or booking engines in China.” He also said ” I want the top hotels where American famous people go, not the hotels for tourists that are advertised by cheap travel agencies”.
Businesses are hoping to give tourists more reasons to come to their attractions by pulling out all the stops. Hotels like the Hilton are offering Chinese breakfast, with dishes that include rice porridge. And stores like Macy’s are offering a 10 percent discount that can be used on some luxury brands.
Gervois magazine - The new travel magazine for millennials travelers in the United States“We’ve done a number of promotions to make it very easy and appealing for the consumers to shop at Macy’s,” said Brian Chuan, director of tourism marketing and development at Macy’s. “We have the products that they want. We carry all the American designer brands that they are looking for.”
He said Chinese tourists spend the most money at Macy’s compared to any other international group. Macy’s tracks the sales by how much the tourists spend on their international credit cards. He said it’s cheaper for Chinese tourists to buy the American brands here, because in some cases it might cost three times more in China.
“We see them leaving with an extra luggage filled with things they want to bring home,” Chuan said.
Chuan also said Macy’s accepts the China UnionPay card, which is a payment card associated with network of banks in China. That makes it convenient for shoppers who don’t want to pay in all cash.

Spending from international visitors make up just 3 percent of Macy’s overall sales at its 800 stores nationwide, Chuan said. But he pointed out that at some locations, spending from international tourists could make up 20 to 50 percent of a store’s total sales, he said.
Chuan travels to China to market Macy’s to groups such as tour operators and banks. Macy’s doesn’t have any locations in China, but Chuan said people there are familiar with the brand.
Macy’s has 13 stores with visitor centers, that allows customers to check in their bags. Centers in Southern California include one in San Diego and Downtown L.A., for its close proximity to the convention center and Staples Center. At key stores, Macy’s may have Mandarin speaking staff.
It appears to be working. Just one day last week in New York, buses dropped off about 1,500 Chinese travelers at the Macy’s, he said.

Source: Southern California Public Radio / W. Lee

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Chinese tourists have become the highest-spending overseas visitors to the U.S. and valued customers for U.S. shopping centers and travel industries

Chinese tourists - Chanel store- China Elite FocusMinutes after arriving by bus at an outlet mall in Cabazon, a dozen or so Chinese tourists hustled out to buy luggage that they planned to stuff with high-end clothes, shoes and bags.
But not Guoshing Cui, a Samsung supervisor from Guangzhou. He made a beeline for the Coach store, where he picked out three expensive handbags. He paid more than $800 from a wad of $100 bills.
The bags were gifts for family and friends in China, where Coach goods sell for two to three times the price in the U.S. “It’s a smart move,” he said of his purchases.
That kind of power shopping has made the Chinese tourist the highest-spending overseas visitor to the U.S. and one of the most valued customers for U.S. outlet malls, shopping centers and tour bus operators.
Chinese tourists spend an average of $2,932 per visit to California, compared with $1,883 for other overseas visitors, according to the latest statistics by the U.S. Office of Travel and Tourism Industries. A big chunk of their spending — about 33% — goes for gifts and souvenirs.
“What we know about Chinese visitors is they don’t like to lay on the beaches,” said Ernest Wooden Jr., president of the Los Angeles Tourism and Convention Board. “What they do like is shopping.”
The outpouring of Chinese money helped set a record for spending by foreign visitors to the U.S. — $168.1 billion in 2012, according to federal officials. Los Angeles is getting its share of the Chinese spending: Nearly 1 in 3 Chinese travelers to the U.S. makes a stop in the City of Angels.
“The Chinese middle class is growing and their No. 1 destination is L.A.,” said Los Angeles Mayor Antonio Villaraigosa, who has made two trips to China and will be in Beijing this week to promote trade and travel with L.A.

“Our magazine has featured many articles about California in 2013, due to the high demand from our readers, very affluent independent Chinese travelers who carefully plan their trip to the U.S. and don’t trust much the official group tours travel agencies” said Pierre Gervois, Publisher of Luxury Hotels of America, a mandarin-only luxury travel publication about the United States. Pierre Gervois added “There is often this misconception that Chinese travelers are interested only in cheap hotels: It might have been true five years ago, but the new generation of Chinese travelers are perfectly aware of the quality of U.S. hotels and shopping malls. The South Coast Plaza (Orange County), for instance, has perfectly understood how to welcome Chinese shoppers. It’s an example to be followed by the entire luxury retail industry”
China’s relatively strong economy and its growing middle class means more Chinese citizens have money to travel and spend, according to tourism experts. The middle class in China numbered 247 million people in 2011, or 18% of the population, and is projected to grow to more than 600 million by 2020.
Visitors to California from China are typically professionals, executives or managers, with an average annual income of $66,900 — compared with an annual per capita income of about $5,000 for all Chinese residents, according to statistics from the U.S. and Chinese governments.
To draw in more Chinese spending, store owners, hotel managers and tour guides in Southern California are going out of their way to welcome Chinese tourists.
At the Desert Hills Premium Outlets in Cabazon, 20 of the 130 stores employ Mandarin-speaking salesclerks such as Jeffrey Hsu, who works at the mall’s Ugg Australia store.

“I think we understand their customs,” Hsu said. “When someone comes to a foreign country they want to bring back gifts for their family and friends.”
Spending by Chinese travelers has grown so fast in the last few years that it has surpassed the per capita outlays of other high-spending visitors, including travelers from Japan, Australia, Brazil and South Korea.
The customs and unique characteristics of the local economy shape how foreign visitors spend their time and money when visiting the U.S.
Australians, for example, share a similar culture with the U.S. and are more likely than other overseas travelers to visit museums, art galleries and historical sites.
“We are fascinated by peoples of different cultures,” said James McKay, an engineer from Melbourne, whose recent visit to the U.S. included tours of Alcatraz island in San Francisco, the Pearl Harbor memorial in Hawaii and ground zero in New York. He also took a historic tour of Disneyland with his wife, Karen.
Japanese tourists, according to travel surveys, spend heavily at restaurants because certain foods, particularly red meat, are much more expensive in the island nation.
That may explain why Morton’s steakhouse in Beverly Hills has become hugely popular among Japanese tourists.
“Don’t even put fish or chicken in front of them,” Joanna Sanchez, a spokeswoman for the restaurant, said of Japanese visitors. “They come for steak.”
But Chinese tourists tend not to shop for themselves. Most of their purchases — usually high-end clothes and accessories featured in American movies and magazines — are gifts for friends and family.
Chinese tourists in the U.S. target brands such as Coach, Ugg, Polo, Nike, Tommy Hilfiger, Neiman Marcus and L’Occitane. Steep Chinese taxes make such brands two to three times more expensive in China, said Helen Koo, president of America Asia tours in Monterey Park.
“Many tourists feel that the savings more than pay for the entire trip,” she said.

Source: Los Angeles Times / Hugo Martin

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Orange County buffs image for tourists

Luxury Hotels of America Summer 2013 CoverAlthough some found it hard to distinguish between a traditional lion dance and Shaolin kung fu, representatives of California’s tourism hotbed of Orange County gathered for the common purpose of tackling China’s lucrative travel market.
Many Chinese might be equally unfamiliar with Southern California’s geography, it was noted at the fifth annual countywide tourism conference in Anaheim on Wednesday.
“Chinese people always think Disneyland and South Coast Plaza are in Los Angeles,” said Cherrie Yang, travel trade marketing manager in the Shanghai office of the Orange County Visitors Association.
The office, which opened in January, is the product of the China Tourism Initiative, which involves tourism officials in the cities of Orange County as well as representatives of tourist draws like the upscale South Coast Plaza – California’s biggest shopping mall.
“China is the single best opportunity for us,” said Gary Sherwin, chairman of the Orange County Visitors Association.
Pointing out that popular attractions such as Universal Studios and San Diego’s Sea World are, respectively, an hour north and two hours’ south of Los Angeles International Airport, Orange County represents a nice midpoint for travelers to Southern California, said Ann Gallaugher, vice-president of tourism development for the Anaheim/Orange County Visitors and Convention Bureau.
Its fledgling effort to target Chinese tourists will enable the county to tap state and federal resources in tourism promotion.
In 2007, the United States received approved destination status from China upon completion of a bilateral tourism agreement. Three years later, President Barack Obama signed the Travel Promotion Act, establishing Brand USA, a public-private partnership to promote international tourism to the US.
Caroline Beteta, president and CEO of the statewide promotion agency Visit California and chairwoman of Brand USA, said 42 million people from outside the US visited California last year. The goal is to welcome 100 million international visitors annually by 2021.
“California is a very popular destination for the very affluent Chinese travelers. They want not only to stay in five star hotels, but also have an appointment with their realtor and visit properties for investment”, said Pierre Gervois, CEO of China Elite Focus Magazines and publisher of the magazine Luxury Hotels of America, a publication in Chinese language for affluent Chinese travelers planning their leisure trip to the United States.  Gervois added “We feature a growing part of our content about California, and our readers ask for more”.
The travel industry is an engine of US economic growth. It employs 7.7 million people nationwide and 917,000 in California.
This year, Beteta said, the number of foreign tourists is expected to increase by 2.2 percent from 2012 while their spending rises 5.1 percent.
For the US, growth in tourism from China is up nearly 900 percent over the past decade. The country is sixth on the list of countries from which US-bound tourists arrive.
“But China will quickly move up with its exponential growth,” said Beteta, who recently accompanied Governor Jerry Brown on a trip to China to promote California businesses.
“The Chinese media no longer asked visa questions anymore,” she said, indicating that US efforts to increase access to foreign tourists are paying off.
During Brown’s trip, Chinese actress Gao Yuanyuan was chosen be California’s travel ambassador to her home country. Gao has 20 million followers on her Sina Weibo microblogging account. Officials hope she can help the state reach its goal of attracting 1.1 million Chinese visitors by 2015.

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Chinese tourists in California

Chinese tourists in californiaHalfway between Las Vegas and Los Angeles, the Tanger outlet mall appeared in the distance, its towering sign beckoning like an oasis. The people on our bus started to titter with excitement. I was sitting with 52 Chinese tourists, mostly elderly retirees from Shanghai, and very few of them spoke English. But as we pulled into the mall’s parking lot, they leaned up against the windows and called out familiar words: “Polo! Tommy! Reebok!”
We were supposed to stop for lunch at a nearby Panda Express, but the group unanimously vetoed a sit-down meal, fearing it would cut into shopping time. The outdoor mall was packed with Chinese tourists; buses from Sino Coach, Lion Express, and Eagle Tours were parked outside. As our motor coach lurched to a stop, everyone sprang up. I struggled to keep up with an older couple, Zhong Dao and Di Ping, as they bolted toward Polo Ralph Lauren .
As soon as we arrived, Zhong Dao, a retired teacher with a haircut like Liza Minnelli’s, began riffling through a rack of polo shirts. She plucked a lavender one and pulled out a scrap of paper with her daughter-in-law’s measurements. “We had great expectations for this,” she told a staffer from our tour company, who translated her remarks for me. She asked him if it was possible to bargain down the price. He shook his head ruefully.
The couple, both 66, bought 12 polo shirts — a relatively modest haul. Outside, dozens of tourists rested on benches surrounded by mountains of shopping bags. Zhong Dao told me that this was her and her husband’s first visit to the U.S. Before, they had only witnessed America in the movies. “We wanted to come see it with our own eyes,” she said.
Until a few years ago Chinese tour groups were forbidden from traveling to the U.S. Then, in 2007, the two countries signed a memorandum that reversed this restriction — and unleashed a tidal wave of tourism. More than 1 million Chinese visitors came to the U.S. in 2011, up from 493,000 in 2008. The Commerce Department expects arrivals to rise 259% between 2011 and 2017. As more Chinese people join the middle class, they are embracing the concept of leisure travel. Tour groups from China are now ubiquitous in major cities, supplanting Japanese travelers as the world’s most sought-after big spenders.
Advanced economies are reaping the benefits. Chinese tourists in America spend about $6,000 per trip, more than visitors from any other country. Because their expenditures are technically exports, the U.S. ran a whopping $4.4 billion surplus in travel and tourism with China in 2011, up from a $687 million deficit in 2006.
The surge in tourist spending offers an elegant solution to one of the economy’s structural problems — a way for the U.S. to tap into the growth in emerging markets while exploiting its own strengths, including its popular culture, its safety, and its large service workforce. More than 5.4 million Americans work in travel and tourism, and their jobs cannot be easily outsourced. Tourism is one of the few areas in which mature economies are still outperforming emerging ones, mainly because people from Third World countries want to visit First World ones.
And yet America’s share of global tourism spending has declined since 2000, from 17.5% to 11.2%, according to the World Tourism Organization. The U.S. may be luring more visitors from China, but it takes in just a sliver of that country’s tourist expenditures, which hit $73 billion in 2011. More Chinese tourists preferred France, the world’s leading destination, that year. Many foreigners view the U.S. as unwelcoming, citing its stringent security measures. “Don’t invite people here and then make them wait two hours to get in,” says Bill Talbert, the head of the Greater Miami Convention and Visitors Bureau.
Beyond that, U.S. businesses have been slow to embrace the phenomenon. “There hasn’t been enough foresight to tailor infrastructure and products to emerging tourists,” says Vincent Lui, a managing director at Boston Consulting Group. While the benefits of Chinese tourism have long been understood in Europe, where hotel chains and luxury brands derive most of their sales from overseas travelers, U.S. companies are only beginning to grasp the opportunity. “So far there are no clear winners among the companies that have already entered the market,” Lui wrote in a recent report. “But that window won’t remain open forever.”
A few hours before we arrived at the outlet mall in Barstow, Calif., I met my tour group in Las Vegas. They had been on the road for 17 days. Their trip — AmericanTours International’s (ATI’s) Broadway to Hollywood package, which costs about $5,000 — had begun in New York City. They had seen Washington, D.C., and Chicago and had driven across the Great Plains (Iowa, which Chinese Communist Party chief Xi Jinping visited as a young man, is especially popular with Chinese tourists). Their journey would end in Los Angeles.
After three hours at the mall, we trudged back to the bus. Our driver, a big Texan named Roy, eyed the group warily as they attempted to wedge their shopping bags into the vehicle’s underbelly, which was already brimming with suitcases. “A lot of them are engineers,” he told me. “Every morning they have to re-engineer it.”
I sat next to Junchao Zhang, a 36-year-old businessman who was traveling with his wife, Chanwen, on their honeymoon. Because the Broadway to Hollywood trip is so long, few working-age Chinese can take enough time off for it; older newlyweds, however, receive extra vacation days. I asked Junchao why they chose to visit America. “The U.S. has had a big influence on China, both economically and culturally,” he said. “I wanted to see the prototype.”
We spent a few minutes silently watching a motorcycle gang flank the bus, speeding ahead into the desert. Junchao told me that he was impressed by the diversity — and kindness — he had encountered in Americans. “The people here are quite outgoing,” he said. “Every time we got lost, we asked somebody and they were very friendly.”
Chinese travelers buy U.S. tour packages from Chinese travel agencies, which purchase them wholesale from American companies called “receptives.” In addition to designing tours, receptives coordinate them; their staffers intercept groups as soon as they hit the ground. ATI, one of the biggest receptives, brings several hundred thousand people to the U.S. each year.
Receptives package tours with specific clienteles in mind. Japanese tourists, many of whom are big Anne of Green Gables fans, flock to Prince Edward Island; Chinese travelers prefer Gone With the Wind (ATI offers a tour of the South based on the novel). Most itineraries include shopping days. It’s “a must for the Chinese,” says Daniel Shen, owner of Lion Tours in Los Angeles. “They want to give things to their families, their kids, their grandsons — they want to impress them.” Because Western brands are heavily taxed in China, they are often cheaper in the U.S.
Most Chinese tour groups cram as many destinations as possible into a single trip. As a result, some buses dash in and out of cities, according to Noel Hentschel, the CEO of ATI. “There is a whole underground of tour operators that operate that way,” she says. “[The tourists] think they’re going to New York, and they never see Manhattan — they put them in New Jersey. In L.A. they put them in Compton.”
Our trip, by comparison, was a meandering stroll. In addition to hitting the big cities, my group visited Yellowstone and Bryce Canyon. Everyone raved about the national parks. “In the U.S., everything you see is very natural. It’s too commercial in China,” Junchao said. “Usually at the entrance of the scene, you’ll find a lot of stores.”
As we rolled up a hill, our tour guide, Roger Ho, passed out pieces of candy. “Equalizes the pressure,” he explained, pointing at his head. Junchao nodded and popped one into his mouth. I asked him what he found surprising about the U.S. “Buffets,” he replied. “You have a lot of products.” Though the group had mainly eaten at Chinese restaurants, they had tried a few Western meals: steak, beef soup, and hamburgers. Both Junchao and his wife vowed to lose weight as soon as they returned home.
As our bus coasted through Los Angeles, Roger stood next to the driver and pointed out the sights. An engineer with a physics Ph.D., Roger has worked in tourism since the 1980s. Short, with a wide stance and an omnipresent fanny pack, he barked into a microphone while we inched along in traffic.
Roger spoke Chinese, but every now and then he dropped an English phrase. When we passed the University of Southern California, he cried out, “University for Spoiled Children!” Outside the Staples Center he made a stapling motion with his hand. Chinese tourists, he later told me, enjoy learning about American universities and companies. “I have to make sure it is of interest to them,” Roger said. He recalled that, in Salt Lake City, the group was fascinated to see people carrying plastic bags to pick up after their dogs.

Zhong Dao, a retired teacher, took a crosscountry group tour with stops at (from left) New York’s East River, Niagara Falls, Buckingham Fountain in Chicago and Badlands National Park
Our driver pulled over near Hollywood Boulevard. Roger led us to the sidewalk of stars, waving a floral scarf like a matador so we wouldn’t lose him. He pointed out names that are well known in China: Jackie Chan, Arnold Schwarzenegger, Marilyn Monroe. We stopped next to Zsa Zsa Gabor and practiced saying her name; when said quickly, it sounds a little like Chinese.
Los Angeles is the second most popular destination for Chinese tourists. The first is New York City, which drew nearly 40% of the country’s Chinese visitors last year. George Fertitta, who heads NYC & Co., the city’s marketing operation, launched a Shanghai outpost in 2007. “Our job is to fully understand where the best fishing is, and then fish,” explains Fertitta. Between 2009 and 2011, Chinese visitors to New York nearly tripled.
Cities and states compete fiercely for Chinese tourists. California recently launched a training program for tourism companies called “China Ready”; Miami works with a hospitality school in Tianjin. At international trade shows, local tourism bureaus set up lavish booths and pitch themselves to receptives (Las Vegas has been known to bring an Elvis impersonator).
Tourism companies say these rivalries put the U.S. as a whole at a disadvantage. “Here, everyone does their own thing: The airlines do their own thing; Disney (DIS) does its own thing; the states do their own thing,” says ATI’s Hentschel. “They compete with each other instead of uniting as one country.” Most industrialized countries have national tourism offices. India bills itself as “Incredible India”; New Zealand is “100% pure.” Australia insists “There’s nothing like Australia” (the motto replaced the controversial “So where the bloody hell are you?”).
The Obama administration has started to build a coherent tourism strategy. In 2010 the President signed a bill creating a public-private partnership, Brand USA, tasked with devising a national marketing campaign (its first commercial aired overseas last year). This past January, Obama issued an executive order requiring that 80% of temporary visa applicants had to be interviewed in three weeks or less. It worked: Consulates boosted staffing in China, and the waiting times for interviews there, which once averaged nearly two months, are now five days, according to the White House. Still, the U.S. has only five consulates in China that offer visa services (France has six). Many Chinese travelers have to trek hundreds of miles to interview for a visa.
Customs is another roadblock. According to a survey conducted a few years ago on behalf of the U.S. Travel Association, the industry’s trade group, 54% of international travelers said they were treated rudely by U.S. Customs and Border Protection agents (the government disputed the survey, calling it “bogus”). Waiting times at airports have declined a bit this year, but heavily trafficked terminals still struggle to manage the crush of international tourists.
As Pierre Gervois wrote in his book “How U.S. Retail, Travel and Hospitality Industries Can Attract Affluent Chinese Tourists”, “The Obama Administration’s decision to speed up the visa process for Chinese leisure travelers will have a major impact in all sectors of America’s economy, in particular for retailers, who will be the big winners”
Given the massive economic upside of Chinese tourism, one wonders why the U.S. isn’t doing everything in its power to facilitate travel. National security experts don’t regard China as a significant terrorism threat. Some critics say loosening visa restrictions might encourage illegal immigration, but there’s little evidence that the rise in Chinese tourism has led to increased overstays. When I asked Roger, our tour guide, whether he thought visitors from China might be tempted to remain in the U.S. after their vacations, he scoffed. “Their life is so good now,” he said. “They come here, and then they feel that it’s better to stay in China.”
On my group’s final day in the U.S., we met at 7:30 a.m. to drive to Universal Studios Hollywood. It was 100 degrees outside, but even our oldest member, a man in his early eighties, walked briskly through the theme park. The first stop was a 3-D ride based on the latest Transformers movie. As we buckled in, everyone hoisted iPads to film the ride.
Though the guide on the Universal tram tour spoke only English, my group enjoyed seeing the icons: the shark from Jaws, King Kong. When we drove through Wisteria Lane, everyone hooted. (Desperate Housewives is popular in China.) As we watched scenes from old movies, the guide joked that half the people on the tram tour were too young to remember the films. “The other half of you don’t speak English,” he said snarkily.
I cringed. It wasn’t the first time our group had been poorly received. At sightseeing spots and restaurants I overheard workers complaining about our size and habits; several ignored my travel companions’ requests. Waiters were befuddled when we asked for hot, not cold, water.
Lui, the BCG expert, says U.S. companies are unprepared for the Chinese tourism boom. He recalls dining at a Cuban restaurant in Miami that was popular with Chinese tour groups but didn’t have menus in Chinese. “I don’t think many foreign brands — hotels, airlines, travel agencies — really tailor their products for Chinese people,” he says.
Retailers have been quicker to jump on the trend. Stores at outlet malls accept UnionPay bank cards, which are commonly used in China. Simon Property Group , one of the country’s biggest mall operators, celebrates Chinese New Year (a Las Vegas outlet center even featured a dragon dance). Coach , the handbag purveyor, has hired more than 100 Mandarin-speaking salespeople since 2010. The company, whose flagship Manhattan store now derives 20% of its sales from Chinese tourists, curates goods with travelers in mind. Victor Luis, the president of Coach’s international group, says certain outlets carry wallets sized for Chinese currency.
The most affluent part of Chinese tourists also rely on their own magazines to guide them: Luxury Hotels of America is the first luxury travel magazine in Chinese about high end hotels in the U.S.. Available on the iPad, it’s the subtle sign of recognition of the most affluent of Chinese travelers in the U.S. in airport VIP lounges or hotel lobbies.
American hotels are also getting better at enticing Chinese travelers. In L.A. my group stayed at the Hilton LAX, one of the country’s biggest airport hotels. In 2011, Hilton launched a program called Huanying — “welcome” in Chinese. Huanying-designated hotels offer amenities like teapots, slippers, and congee for breakfast . Our group appreciated these gestures; when Roger told us we could keep the slippers, everybody cheered. But we skipped breakfast, which cost $22. I didn’t see any Chinese guests in the dining area.
On the group’s last night in the U.S., we dined at Bubba Gump Shrimp Co. in Santa Monica, which sits on a pier overlooking the beach. It was a set menu: dreary-looking house salads and fried fish and chips. Dessert was a small piece of chocolate cake. Zhong Dao took one bite and pushed it aside, her face contorting with displeasure. “Too sweet,” she told me.
As we watched the sunset, I asked Zhong Dao and Di Ping what they liked about the U.S. “Americans are very honest, hard working, open, and friendly,” said Zhong Dao. She added: “The restrooms are beautiful.”
Di Ping nodded emphatically. “Very clean. They have sensors.”
Zhong Dao told me that the couple plans to return next year. They want to see Hawaii. Many of her friends, she added, are interested in touring America. “This is just the beginning,” she said. “Most tourists coming now are from Beijing or Shanghai — the major cities. Compared with all of China, that is nothing. A lot of people will come, and when they come, they will see something they could not find in China.”

This story is from the February 25, 2013 issue of Fortune.

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Chinese New Year brings more Chinese tourists to the U.S.

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