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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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More content about luxury travel to the United States in 2016 in the prestigious Shanghai Travelers’ Club magazine

Shanghai Travelers' Club magazine coversThe Shanghai Travelers’ Club magazine, the Chinese language publication read by China’s Elite global travelers has disclosed its much anticipated 2016 Editorial calendar yesterday. And clearly, Affluent Chinese travelers love the United States! According to Pierre Gervois, the New York City based Publisher and Editor-in-Chief of this publication “The new generation of Chinese business travelers have clearly chosen the United States as their strategic country for their business browth. We have seen in the past two years a very strong interest from Chinese corporations – and wealthy Chinese invividuals- to invest in the United States. The more they come to the U.S. for business, the more they tend to come back with their family for a U.S. luxury leisure experience”

It’s no more just about luxury shopping: Philanthropy and real estate investment are also hot topics. The January 2016 issue will have “Philanthropy in America” as its main feature. “Many Chinese CEO’s residing in the U.S. are willing to create their own philanthropic foundations in America, as they used to do in China. We’ll publish stories to help them to understand how to create a charity organization with all the necessary partners: banks, wealth management advisors & attorneys” added Pierre Gervois.

Driving a vintage 1960 Cadillac on Road 66 is also part of a true luxury American experience. (You can also rent a brand new Cadillac SUV). The march 2016 issue will feature a “Luxury road trip to America” story. Ralph Lauren ripped Jeans, Louis Vuitton beaten up keepall bag, vintage Rolex, Room 101 skull necklace, a motel with neon signs, this is America.

After the success of the September 2015 men’s fashion issue “The Gentleman Traveler”, The September 2016 issue will also feature a Men’s fashion special edition, with in depth stories about America’s best fashion designers. “Having a tailor made business suit made in USA makes a statement for Chinese global business executives” said Tyron Cutner, the Shanghai Travelers’ Club magazine Men’s Fashion Editor.

Real Estate is probably the hottest topic for Chinese travelers. They invested $22Billion in real estate last year (including the $2Billion Waldorf Astoria building and it’s growing fast. Very fast. The november 2016 issue will feature the most expensive houses and apartments in the United States ($15M+), as well as profiles of New York City best real estate attorneys  and U.S. interior architects.

“Winter Holidays in the American West” will introduce snow experiences in the American West: Colorado, Nevada or Arizona are beautiful in winter time and very desirable destinations for Chinese frequent travelers to the U.S. who had already visited New York and Los Angeles multiple times and want to experience a truly authentic American Christmas time.

Request the 2016 Editorial Calendar & Media Kit of the Shanghai Travelers’ Club magazine here.

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The Shanghai Travelers’ Club magazine goes monthly

Shanghai Travelers' Club Spring 2014 coverPublished by China Elite Focus Magazines LLC (New York City), the Shanghai Travelers’ Club magazine has been launched in 2012 as a quarterly magazine in Chinese Mandarin language, featuring a sophisticated content about luxury hotels, lifestyle, private aviation and profiles of famous entrepreneurs.
Considered to be one of the finest luxury travel publications, the Shanghai Travelers’ Club magazine has been a leader in introducing a vision of understated luxury travel for the new generation of high net worth Chinese world travelers.

Read and trusted by 50,000 Chinese frequent travelers, this magazine is considered by its readers as a trusted and independent voice, publishing stories of uncompromising quality about the finest international travel experiences.

Starting with the April 2015 issue, published on March 20, 2015, the Shanghai Travelers’ Club becomes a monthly publication. Featuring 40% content about the United States, #1 destination for wealthy Chinese travelers, this publication is the most influential travel magazine reaching Chinese frequent travelers.

“Going from quarterly to monthly is an amazing achievement for our editorial team” said Pierre Gervois, CEO of China Elite Focus Magazines and Publisher of the Shanghai Travelers’ Club magazine. “We have been working on this project for six months, due to the success of the magazine and the constant demands from our readers to have more content. We had to expand our editorial team at our Shanghai office, under the direction of Elaine Ke, our Senior Travel Editor” added Pierre Gervois.

With an office in Shanghai and in New York City, the now monthly Shanghai Travelers’ Club magazine will consolidate its position as a leading travel & lifestyle media, targeting the world’s most affluent consumers.

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American Philanthropy, new magazine for wealthy Chinese interested to donate to U.S. Philanthropies and Charities

American Philanthropy First Issue CoverChina Elite Focus Magazines LLC, the leading publisher in luxury travel and lifestyle magazines for affluent Chinese travelers, announces the official launch of its latest publication “American Philanthropy”.

“We know that a significant part of our readers of both publications, Shanghai Travelers’ Club and Luxury hotels of America are Chinese businessmen who are currently involved with philanthropies in China and that they are also interested to continue their involvement with charities and philanthropies in the United States,” said the CEO and publisher, Pierre Gervois. “That’s why we felt the need to launch a new publication, focused entirely on philanthropic issues along with curated lifestyle content about the United States.”

American Philanthropy magazine will feature exclusive articles about America’s most influential philanthropic organizations as well as profiles of American Philanthropists. The first issue introduces organizations such as New York Community Trust, National Philanthropic Trust, Bed Stuy’s Project Re-Generation and Graham Windham to highly affluent Chinese businessmen and donors. A renowned New York philanthropist – Nancy Heiser, also vice president of wealth management at UBS Bank, has the honors of the first cover story.

American Philanthropy magazine specifically caters to the new generation of international Chinese business executives doing business with the United States. This publication is available on all platforms such as iPad, web and on China’s most important social media network, Weibo.

“ Chinese business travelers coming to the United States want to have access to sophisticated information and this is not easily available in any Chinese publication or not available at all – until now,” said Pierre Gervois. “This magazine will give them insights on the crucial role of philanthropy in the United States, as well as its connections with politics and business.”

“American Philanthropy offers excellent advertising opportunities for U.S. companies interested in reaching to highly affluent Chinese businessmen planning or already doing business in the United States,” said Janavi Kothari, Advertising Sales Representative of American Philanthropy. “This publication is so far the most targeted magazine published in the U.S. with an unique readership of prominent business owners and top Chinese international executives.”

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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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