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Marketing to Chinese Outbound Tourists: Towards Normalization.

By Pierre Gervois, Founder & Publisher of the STC magazine, CEO of China Elite Focus Magazines LLC (New York), keynote speaker and expert about marketing to outbound Chinese tourists.

In 2005, I had the first conversations with executives in luxury hospitality groups about the importance of improving the welcome for their first Chinese guests. I knew they used to receive a very poor quality of service, in large part because of the ignorance of the Chinese culture from the staff of luxury hotels, and also because of the persistence of stereotypes about Chinese travelers.

The General Managers of five star hotels I talked to from 2005 to 2007 told me more or less the same thing “Chinese tourists don’t stay in five star hotels”, and, as a consequence, they did not see the point of investing resources to improve the service for their Chinese guests.

Today, these same hotels advertise in the STC magazine and ask us to define their marketing strategy to attract more of high-spending Chinese guests and offer them the best possible service.

Things have obviously changed over the last ten years.

To better understand the way Chinese outbound tourism has dramatically changed over the last decade, let’s go back fifteen years ago, in the early 2000’s.

I would define three periods to describe the evolution of Chinese outbound tourism:

From 2000 and 2005, most of Chinese outbound travelers were business travelers traveling in official delegations to attend to trade shows and official business meetings in Western Europe and in The United States. At that time, it was nearly impossible for individual Chinese leisure travelers to obtain an independent leisure visa for Europe or the U.S., and the only way to have holidays overseas was to travel in the famous (or infamous) group tours organized by Chinese State-owned outbound travel agencies, in partnership with selected destination management companies in their country of destinations.  Basically, their passports were confiscated by travel agencies during their trip in coaches and low quality hotels, which is not a very enticing way to travel.

Gervois magazine - The new travel magazine for millennials travelers in the United StatesI talked with many of these first Chinese leisure travelers between 2000 and 2005, and they told me how displeased they were by the very poor quality of their travel experience, and how their feelings were hurt by the stereotypes who were widely spread within the travel industry: Chinese tourists were supposed to love to travel in coaches, were allegedly obsessed with discounts, and would prefer to stay in one star hotels. In fact, my Chinese friends were at that time willing to be free to explore a country on their own, were searching high quality – and expensive- travel experiences, and were particularly fond of nice suites in five star hotels. Basically, like a lot of affluent western travelers.  But not of a lot of travel and tourism professional understood and even listened to them at that time.  You were a Chinese tourist?  Then you had to fit in a certain category of negatively stereotyped traveler. Period. In some cases, that was very close to segregation, and surprisingly, very few western travel & tourism professionals realized how painful and sometimes humiliating it was for Chinese leisure travelers.

From 2005 and 2010, The travel and tourism industry started – slowly – to give up on stereotypes concerning Chinese travelers, and at a slower pace to gradually improve the service for Chinese travelers.  Some hotel chains started to offer in-room Chinese tea (It took several years of studies and commissioned researches for hoteliers to take such a simple and inexpensive step), or started to recruit a few Chinese speaking staff members.  But the industry did not yet understood where the core problem was: the structural inability of both the outbound travel agencies (OTA’s) and destination management companies (DMC’s) to understand this massive change in international outbound tourism.  In less than ten years, faster than in any other country in the history of international leisure tourism, a group of outbound travelers was growing at an impressive and never seen rate, from 5 million in 2000 to 57 million in 2010. With old fashioned organizations, Chinese OTA’s could not offer the kind of service that the new generation of Chinese travelers wanted from them: a good understanding of international travel opportunities.  On the other hand, DMC’s in Europe and the U.S. were still stuck in their preconceptions about Chinese leisure travelers and kept offering the same standardized programs (Traveling in coaches from a discount shopping mall to another and sleeping in very low quality hotels), that were by the way never favored by the Chinese travelers themselves.  But their advice was never solicited.  That was before the social media era.

Around 2008, the first social media networks started to become popular in China.  And yes, I remember the time (somewhere in 2008), where Facebook and Twitter were freely accessible in China. With the launch of Weibo in 2009 and dozens of other Chinese social media networks, Chinese outbound travelers started to post stories about their experiences about their overseas travel, and make comments about hotels (since 2008 with the launch of DaoDao, the Chinese version of TripAdvisor). I frequently read translations in English of comments written in Chinese Mandarin about famous luxury hotels in New York, London or Paris, and the first comments and reviews were incredibly negative. Most of them expressed how the staff of these famous hotels lacked of respect with their first Chinese guests, and did clearly offer them a second-class experience compared to other guests from western countries. I was also surprised to see that nobody in these hotels made the effort to request a translation of comments made by their Chinese guests and analyze them.

From 2008 to 2010, the first travel destinations, travel agencies and hotels started to realize that they needed to communicate properly with Chinese outbound travelers, but very few marketing options existed. China Elite Focus was historically the first digital marketing agency (founded in june 2008 in Shanghai) who was exclusively specialized on digital travel marketing for affluent Chinese outbound travelers, with a unique focus on luxury destinations.  The launch of China Elite Focus was followed by a flurry of creation of other independent digital marketing agencies in China, Europe and the US, and defined all together an entire new marketing category: digital marketing to Chinese outbound travelers. The quick development and the popularity of Chinese social media networks as well as the first digital campaigns to promote international travel to Chinese potential travelers contributed critically to a better connection between travel operators worldwide and the emerging category of young and affluent Chinese first-time outbound travelers.

But access to the information was still a big issue, specifically for high spending travelers: From China, how to know what is the best hotel in New York you absolutely want to stay in? What is the best exclusive golf course in Scotland? How to book a table in the Paris’ finest restaurants?  No curated information was available at that time in Chinese Mandarin.  The existing travel magazines published in China did not had such sophisticated informations, and no website existed. That is the main reason we launched the Shanghai Travelers’ Club magazine (or the STC magazine) in 2009 as an electronic newsletter and since 2012 as an iPad & iPhone digital publication.

From 2010 to 2015, all the elements of the complex puzzle were in place: a dynamic social media network environment in China, the emergence of digital only Chinese travel agencies using extensively social media, the growing desire of Chinese travelers to discover foreign countries, and the understanding by western travel, tourism and retail companies that, yes, this is it, Chinese travelers are the world’s biggest spenders and the #1 group of Chinese outbound travelers. This is an interesting period where we saw two different categories of Chinese travelers intersecting on different paths. Senior travelers, mostly top executives of large Chinese companies who reward themselves after a life of hard work with a once or twice a year luxury international travel experience, and their children, in their early twenties, who quickly become frequent global travelers (six to ten times a year), and end up spending more than their parents in travel and shopping.

One of the important reason for the exponential growth of Chinese outbound tourism (120 million in 2015) is luxury shopping, and in particular the desire to have a genuine shopping experience. Buying a Gucci bag in Milan, a Louis Vuitton suitcase in Paris or a Tiffany diamond in New York was seen in the early 2010’s as a necessary sign of social status for the young and affluent generation. International luxury brands understood too late this trend and hastily opened too many stores in China in this period, many of them with more sales associates than Chinese customers. (They are now closing stores and start to focus on improving the customer relations at their flagship stores in the US and in Europe for Chinese shoppers.)

GERVOIS magazine Advertising and sponsored content opportunitiesOn January 19, 2012, President Obama issued the “Executive Order #13597” who had a major impact in Chinese outbound travel.  This decision had to major consequences:
First, “to increase nonimmigrant (i.e. tourists) visa processing capacity in China by 40% over the coming year”, meaning allocate more human resources at U.S. consulates in China in order to be able to review and process more leisure visa requests.  Second, “to ensure that 80% of nonimmigrant visa applicants in China are interviewed within 3 weeks of receipt of application”, meaning to allow a much faster process for individual Chinese tourists planning holidays in the U.S..  This rather technical Executive Order created a psychological change in the perception the United States as a  luxury holidays destination by Chinese travelers.  Previously more considered as a business destination, the U.S. were seen as of the beginning of 2012 as a much more “tourist friendly” destination by the Chinese, and they started massively to consider to spend holidays in this country, who appeared as newly opened to them. We saw a surge in requests on Chinese search engines about “travel and holidays in the US” in the first half of 2012, and the U.S. travel and tourism industry operators started to feel the economical benefits of an increased influx of Chinese leisure visitors as early as the summer 2012. (1.5 million Chinese visitors came to the U.S. in 2012, 3.1 million are expected for 2019).

In november 2014, China and the United States negociated a reciprocal agreement to extend the validity of tourists visas up to ten years (multiple entries).  It means that since november 2014, a Chinese tourist with a valid tourist visa to the United States can keep this visa for up to ten years, with multiple entries. That is very close to the “Visa Waiver program” with european tourists, and has strongly encouraged Chinese travelers to choose the U.S. over Western Europe destinations, who do not offer tourists visas with such a long validity for Chinese visitors.

At the end of 2015, We could say that 80% of tourism offices, hotel chains, retailers, and airlines had in place elements for a marketing strategy focused on Chinese tourists, even a modest one. What a change if we compare to 2005, where virtually less than 5% of them had a strategy in place.

Today, what could be the trends for the years to come? The first world that comes to my mind is normalization. For the last fifteen years, travel and tourism marketers considered Chinese tourists as a kind of “exotic” category of international traveler, with all the stereotypes and preconceptions attached. Now that more than 100 million Chinese travelers discover the world every year in virtually every country on the planet, tourism and travel professionals have a much better understanding of what the most important group of tourists really want.  And it’s – how surprising – exactly what Americans and European travelers want when they travel abroad: A carefully curated travel experience, nice hotels, local cultural and food discoveries, and the possibility to choose, alone, what to do during the day. Before starting a marketing campaign focused on Chinese outbound travelers, it’s now time to have the exact same mindset that for a marketing campaign targeted at any other nationality of tourists. And, please, forget about the stereotype of the Chinese traveler allegedly only interested by discounts. They are not. They want quality, sophistication and authenticity.  And they know it doesn’t come cheap.

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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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In the first half of 2012, +46% of visa applications processed at U.S. Embassy for Chinese leisure travelers

President Barack Obama’s initiative to boost international tourism has pushed the US government to process a record 1 million visa applications from China so far during fiscal 2012.
“This extraordinary accomplishment represents visa processing growth of almost 43 percent over the same period last fiscal year, when we had processed just over 675,000 visa applications in China,” the State Department announced Thursday.
The US federal government’s fiscal year begins Oct 1 and ends Sept 30, so the department was referring to visa-processing totals through the end of the third quarter on June 30. As China Daily reported in April, through the first half of fiscal 2012, the State Department had processed 453,000 visa applications from Chinese citizens, up 46 percent from the first six months of fiscal 2011.
To reach the 1 million figure through the current fiscal year’s first nine months, department staff at the US Embassy in Beijing and the four consulates across China processed at least 547,000 visa applications from Chinese citizens in the three months from April 1 through June 30 – reflecting especially high demand for the busy summer travel season.
The State Department credited the opening of more windows for interviews, expansion of consular office space and better-maintained waiting areas for visa processing at the Beijing embassy and its consulates in Chengdu, Guangzhou, Shanghai and Shenyang. Furthermore, it said the average waiting time for a visa interview has been reduced to about a week from the several months it used to take to get an appointment.
According to Pierre Gervois, CEO of China Elite Focus and the author of the Book How U.S. Retail, Travel and Hospitality Industries Can Attract Affluent Chinese Tourists “This initiative is the direct result of a very successful lobbying campaign organized by the retail, travel, and hospitality industries that were the first-hand witnesses of the incredible purchasing power of Chinese tourists in the last few years. Roger Dow (president of the United States Travel Association) and Joe McInerney (president of the American Hotel & Lodging Association) have done a fantastic job of explaining to Washington the vital necessity to the American economy of finding ways to increase the number of Chinese leisure visitors.”
Dong Xue, a senior at Purdue University in Indiana, has just returned from China and it took her only a week to get a visa, even at the peak of summer. As a repeat traveler to the US, Dong was able to use a bank drop-off service to renew her visa. Without having to go for a personal interview, she submitted her paperwork through the bank and got her visa in five business days.
“As the Chengdu consulate (nearest to her hometown of Chongqing) was very busy then, their colleagues in Guangzhou processed my application,” Dong told China Daily. “It’s so fast. Usually it will take two weeks.”
The Obama administration, pointing out the value of travel and tourism to the US economy, introduced in January a strategy to make the United States the top destination for foreign visitors. More than 1 million jobs could be created over the next decade if the US increases its share of the international travel market, Obama has said.
In 2011, about 1.18 million Chinese visited the United States and the number is expected to reach 2 million in 2015, according to the National Tourism Administration of China.

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“Real America” opens its doors to big spending Chinese tourists

They’ve walked the Golden Gate bridge, snapped pictures of the Statue of Liberty and fed the slots in Sin City. Now what?
As the number of Chinese visiting the United States skyrockets — it’s expected to jump 15 percent to 556,000 this year and exceed 800,000 by 2013, according to the U.S. Department of Commerce — it’s not just the tried and true destinations of California, Las Vegas, Hawaii and New York that are welcoming the tour busses. Despite budget cuts, state tourism boards across the country are making an eager push to woo Chinese tourists, rolling out lists of initiatives to show these savvy travelers why their corners of the map deserve a visit.
Kevin Langston, deputy commissioner of the tourism division at the Georgia Department of Economic Development, says that while Chinese travelers often choose to see iconic U.S. landmarks on their first visit to the States, they also want a close-up view of Americana, the county fairs and the corner drug stores. “Our greatest opportunity in Georgia is that second or third trip when they want to see how real Americans live and gain a deeper understanding of a unique region of the country, like the American South,” Langston says.

To introduce Chinese travelers to the Peach State, department staff members have attended travel trade shows in China, led the Chinese Travel Channel on a two-week media tour and created a Georgia tourism website in Mandarin. They’re now hoping to promote Georgia through social media platforms, for instance, by having Chinese students blog about the state.
Other states are also luring Chinese travelers westward. The Vermont Chamber of Commerce brought over a television production crew from Shanghai to film a travel documentary on the northeastern state. The tourism bureaus of Illinois and Chicago have partnered with United Airlines and select tour operators to promote Chicago Month, which features special travel packages from Beijing, Shanghai and Guangzhou. The Greater Miami tourism bureau has led delegations of Chinese tourism directors on bus trips from Orlando to Miami.

For many states, it seems as though the efforts are paying off. In Salt Lake City’s Temple Square, mainland China tops its list for group tours.
“We may not be as well known as New York City or San Francisco, but the unexpected beauty and the solitary experience that you can get in our national parks is new and very interesting to Chinese visitors,” says Leigh von der Esch, managing director of the Utah Office of Tourism.
Jennifer Hobson, ecotourism director of the New Mexico Tourism Department, agrees that Chinese travelers are looking for activities and attractions they can’t find in their home country. When she attended Shanghai’s China International Travel Mart, a travel trade show, people were drawn to the unexpected sights in her small booth — a Native American man with long hair and some turquoise jewelry.
“The Chinese are just fascinated by the cowboy and Indian culture,” Hobson said. “When they see the pictures of the Wild West, they want to go.”
The hope is that these initiatives will translate into dollars for state tourism, convention and visitor bureaus, which have been slapped with budget cuts in recent years.

According to the UN World Tourism Organization, there will be 100 million Chinese international travelers by 2020. Chinese travelers spend more than their counterparts in any other country — about $7,200 per person per trip, according to the U.S. Commerce Department. This month, President Obama signed the Travel Promotion Act, which will establish a national tourism board to encourage foreigners to visit the United States.
In April, the National Tour Association will open a Visit USA Center in Shanghai. The center will provide information on travel tour packages, destinations and tour operators, and will offer a facility for U.S. companies to use when in Shanghai to expand travel and tourism business opportunities.

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