China-U.S. tourism is on a growth trajectory and can help promote closer people-to-people links between the two countries, CEO of China’s top online travel service provider Ctrip has said.
Ctrip sees huge growth potential for Chinese tourists traveling to the United States, Jane Sun said at Columbia University Business School’s Chazen Institute of Global Business.
Last year, a record of 1.3 million people booked air tickets to the United States on Ctrip, she said. The company served in 2016 more than 160,000 Chinese tourists who traveled to the U.S. by providing package tours and other tour products, she added.
“People are entrepreneurial in China and want to explore opportunities in other markets. That’s why there is a lot of demand for travel from China to Australia, Europe, New Zealand and the U.S. along with other areas,” said Sun, who was recently rated by Forbes China as one of China’s most powerful business women.
Ctrip made strategic investment in three U.S. tour operators to support the demand by Chinese for trips to the United States last year.
Sun said that there was still room for growth and that her company wanted to further expand its market share.
“I have lived in both the United States and China and I cherish the friends I have in both nations. Travel can be a bridge between the two countries,” she said.
Ctrip, which had an initial public offering on the Nasdaq in 2003, is an industry heavyweight with over 30,000 employees and market valuation of about 25 billion dollars.
Statistics showed that the number of Chinese tourists traveling to the U.S. jumped by 14.7 percent in the first three quarters of last year from a year earlier, while the number of American tourists traveling to China increased by 7.3 percent during the same period.
Pierre Gervois, Publisher of Luxury Hotels of America, New York, October 2014
As China’s outbound tourist market rapidly expands, high-end hotels and retailers across the world are vying for the business of this important group. In the United States, one company on the front lines of this trend is China Elite Focus, a New York-headquartered, Chinese-language publisher that has been producing luxury travel magazines for Chinese readers since 2008. With content focused on destinations, hotels, cuisine, retail, and philanthropy, the magazines were created to meet demand by moneyed Chinese travelers for content on authentic, upscale experiences.
In order to learn more about how China’s luxury outbound travel market has evolved over the past six years, we talked to China Elite Focus CEO and Publisher Pierre Gervois about the changes he’s seen in Chinese travelers’ taste. Read below to hear his thoughts on Chinese travelers’ interest in getting a taste of American culture, the decline of the Chinese “100 percent shopping trip,” and how this fall’s Golden Week fared for U.S. luxury businesses.
What inspired you to start China Elite Focus?
In 2008, after having served as the president of a consulting company specialized in foreign investments in China, I decided to start a new publishing company and to publish high quality luxury travel magazines in Chinese Mandarin. A lot of my Chinese friends complained to me that they could not find any publication in Chinese language with curated and sophisticated content for their outbound travels. So our mission, from the beginning, was to bring to them beautifully written travel stories about the world’s most spectacular and exclusive experiences. I’m very proud of the job we have done with our team of very talented travel editors, lead by our Senior Travel Editor, Elaine Ke. Today we publish there magazines: the Shanghai Travelers’ Club, Luxury Hotels of America, and American Philanthropy.
How is the content of your magazines tailored to a Chinese audience?
All the content of our publications is written at our Shanghai office by Chinese editors. We do not translate from English an existing article; we produce our own original content. We are in constant exchange with our readers through Weibo, and we know what kind of themes or destinations they want to read stories about. For example, we have noted a strong interest for travel to the United States over the past year, and we have increased the stories about luxury travel experiences in the United States.
We’ve been reading a lot about how wealthy Chinese travelers are becoming more interested in “experiential” travel rather than just basic shopping and sightseeing. Have you noticed this trend growing among your readers?
That is true. The time of the “100 percent shopping trips” is done. The new generation of affluent Chinese outbound travelers is now very mature, extremely well-informed, and wants to discover new experiences, off the beaten tracks. We have published stories about horseback riding experiences in the Nevada desert in Luxury Hotels of America which had great success with our readers. Chinese shoppers tend now to plan much more carefully and in a very sophisticated way their shopping plan abroad. They are looking for more limited-edition items of lesser-known brands they have discovered on social media networks, rather that already well-known global brands, who have saturated the market with products over-marketed to Chinese customers.
One of your magazines focuses exclusively on luxury hotels in the United States. Which U.S. hotels are the most popular with Chinese travelers at the moment?
Luxury Hotels of America features in particular historical hotels, or hotels with a connection to the American culture. The kind of U.S. hotels that Chinese travelers like are boutique hotels, lodges, and ranches with a connection to nature and wildlife. We have seen a significant shift from standardized, large-size hotel chains to much smaller hotels offering a personalized experience. In New York City, we have seen that hotels in Brooklyn, built in former factories, in “hip” neighborhoods were a great success with Chinese travelers, as well as properties in the American West, offering a genuine local experience.
How was this season’s Golden Week for luxury hoteliers and retailers in the United States?
We have recently discussed with several well-known retailers in the United States, and they have been surprised by the evolution of the shopping behavior of Chinese customers and their use of social media to compare brands and know exactly where to buy. It was not uncommon for them to see Chinese customers with their iPads and mobile phones texting to their friends about brands and retailers. The digital integration of the shopping experience is now extremely important and mobile payments such as the Apple Pay will definitely be very popular with Chinese shoppers in the United States. Since the beginning, we have integrated our content with social media, and we are very pleased with this trend.
What are some ways in which U.S. luxury businesses are doing a good job of reaching and serving Chinese tourists? What are some ways in which they can improve?
U.S. luxury brands and luxury hotels can do much better! They are doing all right, and have a big margin to improve their relations with Chinese travelers on the three following points:
-No more stereotypes about Chinese tourists. A lot of U.S. hospitality, tourism, and retail companies still create marketing campaigns with the stereotype in mind of group tourists traveling in coaches, staying in cheap hotels, with entirely pre-arranged shopping programs. Most Chinese travelers do not want to travel this way anymore and choose themselves their hotels and their shopping experiences, without the help of travel agencies.
-Chinese travelers to the United States are looking for a genuine American experience. Some U.S. hotel chains have developed programs specifically for Chinese travelers with rooms decorated in a Chinese style, offer Chinese food only, and entertainment programs linked with Chinese culture. This is exactly the opposite of what Chinese tourists really want. They write to our editors and complain with us that they want to find a real American experience in hotels, not a “fake” Chinese experience! They have traveled for thousands of miles to have a taste of American culture and civilization.
-A more sophisticated and thoughtful marketing strategy with Chinese customers. U.S. luxury brands must understand that, in order to sell to Chinese tourists in the United States, they must start to promote and do branding in China, with specialized digital media targeting Chinese travelers planning their trip to the United States. It’s too late and very little effective to promote their brands in printed magazines or tourist guides distributed in airports or hotel lobbies, because the purchase decisions have already been made several weeks ago, in China. Digital native advertisement (sponsored content) is also very effective to create brand awareness. Chinese customers are early adopters of the newest technologies, and old-school marketing does not work and looks “uncool” to them. Social media integration and sponsored content are the two pillars of a successful campaign with Chinese tourists coming to the United States.
For many in the tourism industry, the U.S. government’s partial shutdown could not come at a worse time. The week the United States closed its national parks, monuments and museums coincides with Golden Week, designated by the Chinese government as a time for its citizens to travel.
The United States was named the top “dream destination” for Chinese travelers, which make up the fastest-growing tourism market into the United States. But the dream vacation for many Chinese tourists has turned into a nightmare, according to Haybina Hao, director of international development for the National Tour Association, whose tour operators and other members focus on travel into and within North America.
“Many Chinese visitors have saved for years to take the trip of a lifetime to our country. They wanted to see Yellowstone, the Statue of Liberty and the Grand Canyon,” Hao said. “But they’re seeing none of it. They are extremely frustrated and confused by U.S. politics.”
While Chinese travelers are losing a golden opportunity, U.S. tour operators are losing money. “I had a group of 25 Chinese visitors who planned to visit Yellowstone this week, but they cannot get in,” said Sonny Sang of California-based ACC America China Connection, a member of NTA’s China Inbound Program. “I re-routed them to another destination, but I’ll lose $10,000 on this group. And I have another group of 22 arriving on Sunday to see Yellowstone. The financial consequences are unbearable for me as a small tour operator.”
More and more Chinese have been arriving since 2008, when China began to allow leisure travelers to visit the United States in group tours. Since then, China has become the fastest-growing source of visitors for U.S. hotels, restaurants and attractions. Last year Chinese visitation here increased 41 percent, and spending by Chinese travelers rose 19 percent, following 47 percent increases in both 2010 and 2011.
Pierre Gervois, CEO of China Elite Focus Magazines, LLC and Publisher of luxury travel magazines in Chinese language such as the Shanghai Travelers’ Club, Luxury Hotels of America or Niuyue Mag, said “ We have reports of very affluent Chinese tourists who have cancelled at the last minute their luxury shopping trip to the U.S. because of the shutdown. Knowing that they would have spent millions of dollars in shopping in the U.S., it’a direct and measurable loss for the U.S. economy”
Now they just need a place to spend it. “The tour operators I talked to are really scrambling to find alternative activities, including a tour operator who has more than 20 groups in the U.S. this week.” Hao said. “Compared to other countries that utilize creative ways to lure Chinese tourists, the U.S. shutdown will shatter the confidence of international travel companies.”
Many U.S. tour operators have become creative in salvaging their groups’ experiences, including Neil Amrine, owner of Guide Service of Washington (DC). “The biggest disappointment is the Smithsonian being closed, but we’re coming up with other solutions,” said Amrine, who revised the itinerary for a group of Chinese travelers this week, adding for-profit attractions and employing little-known pathways to view popular monuments. “They weren’t thrilled at first, but I think they’ll leave happy.”
The challenge for tour operators—and for the entire U.S. tourism industry—is to work with city and regional tourism organizations to develop alternatives to national parks and monuments that will satisfy travelers. Most are finding a wealth of options across the country, from California to Washington, D.C. At the same time, they’re keeping an eye on continuing closures and tourism roadblocks caused by the shutdown.
“We’re fielding calls nonstop and posing alternatives that are working,” Amrine said. “We’ve had only one group cancel, so we’ve been lucky… so far.”
As Gervois concluded” The purchasing power of Chinese inbound tourists in the United States is now so important for the country’s economy than it’s more than ever necessary to reach a bipartisan consensus to protect the travel and tourism industries’ interests”
Source: Global Travel Industry News