Transcript Document

Barbara Bryant
• 30 vet Asia/Pacific
• Former Director Hong
Kong Tourism-LA
• Co-Founder –
boutique rep firm of
• Establish HK Film Dpt
Bryant & Tripptree
• VP Sales/Marketing
• Firm appointed, PATA
Mandarin Oriental
Regional Director
Hotels
ATME EXECUTIVE CHINA THINK TANK
Barbara Bryant, PATA North America Regional
Director
Slide: 3
February 12-13, 2009
Ron Erdmann
Deputy Director
Office of Travel & Tourism Industries
Ron Erdmann
• Admin international travel
research
• Consults with clients on
use and application of
information
• Role is to create and
improve upon
international marketing
intelligence
• Prior nearly decade with
U. S. Travel & Tourism
Admin until closed
• Experienced in
developing and
promoting rural tourism
China Research
Presented to:
ATME:
Think Tank
Presented by:
Ron Erdmann
Office of Travel and Tourism Industries
International Trade Administration
U.S. Department of Commerce
February 2009
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
6
OTTI Resources on China
•
•
•
Visitor volume to U.S. from China (monthly from I-94 form)
U.S. resident travel to China (non-stop) (monthly)
Other Data collected on DHS I-94 form (monthly—port, visa type, age of travelers,
address in U.S., etc.)
•
Visitor volume forecast (semi-annual)
•
•
•
•
Visitor spending (annual)
Visitor profile (annual)
U.S. resident travel to China (annual)
Chinese visitation to all countries (annual)
•
•
China Outbound Study (one-time special study)
China Travel Trade Barometer (quarterly planned)
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
7
The China Outbound Travel Market
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
8
China Outbound Travel
Total Outbound Travel
Total Long-haul Travel
40,000
40,891.4
10,000
8,000
30,000
25,330.9
6,000
4,808.4
20,000
4,000
3,151.4
11,174.0
10,000
5,643.2
2,000
1,834.7
1,216.2
0
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007p
2008f
2009f
2010f
2011f
Data from China National Tourism Office and Global Insight – Global Travel Navigator May 2008
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
9
China Outbound Trends
(total outbound travelers)
Destination
GRAND TOTAL
2001
2002
2003
2004
2005
2006
2007f
2008f
2009f
2010f
2011f
06/01
11/06
11/01
11,170
15,097
15,711
21,536
22,753
25,120
28,299
31,585
34,775
38,183
41,789
13,949
16,670
30,619
Asia
9,346
12,695
13,521
18,914
19,920
22,066
24,986
27,929
30,784
33,816
37,019
12,720
14,953
27,673
Europe
1,398
1,963
1,831
2,164
2,270
2,387
2,588
2,850
3,108
3,395
3,717
989
1,330
2,319
319
322
234
304
387
465
508
568
625
690
745
146
280
426
Middle East
35
46
54
73
92
117
126
140
156
173
193
82
76
158
Latin America
32
33
32
41
43
44
49
54
59
64
70
12
25
37
Africa
33
33
33
33
33
33
33
33
33
33
33
0
0
0
7
6
6
7
7
8
9
10
11
12
13
0
5
6
Hong Kong
4,449
6,825
8,467
11,886
12,730
13,761
15,639
17,544
19,386
21,324
23,349
9,313
9,588
18,900
Macao
North America
Caribbean
1,309
1,726
1,431
2,191
2,370
2,627
2,986
3,350
3,701
4,071
4,458
1,319
1,831
3,149
Singapore
460
666
560
880
858
1,037
1,189
1,322
1,449
1,585
1,727
577
690
1,267
Thailand
801
798
607
779
762
914
993
1,104
1,222
1,361
1,524
113
610
723
Korea, Republic
482
539
513
627
710
897
1,019
1,113
1,202
1,298
1,402
415
505
920
Japan
391
452
449
616
653
812
906
998
1,089
1,187
1,295
421
484
904
Vietnam
625
660
693
778
753
791
883
982
1,078
1,183
1,295
166
504
670
Italy
394
531
480
728
725
758
815
897
977
1,063
1,157
365
399
763
Russia
461
725
680
661
691
722
791
871
953
1,050
1,164
261
442
703
Malaysia
453
558
351
550
352
439
504
560
614
671
732
-14
292
279
Germany
237
270
268
293
313
327
358
395
430
468
509
90
181
272
United States
232
226
157
203
270
320
353
394
433
479
516
88
195
283
Australia
158
190
176
251
285
309
344
376
407
441
478
150
170
320
Canada
87
96
76
102
117
145
155
174
192
210
229
58
84
142
Sw itzerland
49
69
63
100
137
144
154
170
185
201
219
94
75
170
Indonesia
32
37
41
51
112
117
134
149
164
179
195
85
78
163
Belgium
62
113
107
114
109
114
122
134
146
159
173
52
60
111
Netherlands
81
82
78
82
97
113
121
134
146
158
172
32
59
92
United Kingdom
58
64
68
95
92
99
109
120
131
142
155
41
56
97
Data from China National Tourism Office and Global Insight – Global Travel Navigator May 2008
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
10
U.S. Market Share of Long-haul Travel
U.S. Market Share of Long-haul Travel
22%
U.S. % share of long-haul
21%
18%
17%
Long-haul % share of outbound
16%
18%
14%
13%
16%
16%
14%
12%
1998
1999
2000
12%
9%
10%
2005
2006
13%
9%
1997
13%
2001
2002
7%
8%
2003
2004
12%
12%
12%
12%
12%
12%
12%
12%
12%
12%
2007p 2008f
2009f
2010f
2011f
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
11
What is Known about China Outbound Travel?
Total Outbound
• 25 million in 2006
• Only 12% to long-haul destinations; 70% to Hong Kong/Macau/Singapore.
• Strong growth across most top 20 destinations, especially Hong Kong,
•
•
•
Macau, Korea, Italy, Australia.
Tripling of travelers to Hong Kong from 2001-2006 (4.5M to 14M)
Top long-haul destinations in 2006: Italy (807K), Russia (720K), Germany
(442K), US (321K), & Australia (309K).
Total travel to all long-haul destinations was 3.2 million in 2006, forecast
to grow to 4.8 million by 2011.
Sources: Global Insights Inc. Global Travel Navigator; OTTI, UNWTO
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
12
Chinese Visitors to the U.S.
000s of visitors
16th
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
13
China Spending in the U.S.
Millions of Dollars
10th
$2,699
$3,000
$2,500
$2,071
$2,000
$1,500
$1,243 $1,291
$1,534
$1,326
$1,185
$947
$907
$1,000
$500
$1,424
$1,115
$858
$335 $378 $424
$0
93
94
95
96
97
98
99
00
01
02
03
04
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
05
06
07
14
What is Known about China Outbound Travel
to the U.S.?
•
Outbound to the U.S.:
–
–
–
•
397,000 visitors to the U.S. in 2007—near doubling in six years.
Flat visitor volume from 1993 to 2003.
25% growth through November 2008, but slowing considerably.
U.S. share of Chinese outbound travel has declined for two
reasons:
–
–
Long-haul travel has declined as a share of total outbound
U.S. share of long-haul had declined until four years ago. Share of long-haul
has increased.
Sources: Office of Travel & Tourism Industries (OTTI) & Global Insights Inc. Global Travel Navigator
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
15
What is Known about China Outbound Travel
to the U.S.?
•
Trip Characteristics:
–
–
–
–
–
–
Port of Entry: San Francisco (21%), Chicago (17%), LA (17%), NYC (10%).
Destinations: concentrated in a few states (CA-57%, NY-32%, followed by: NV,
DC, IL)
Main Purpose of Trip: Business -51%; Visiting Friends & Relatives (VFR) - 23%;
Convention - 11%; & Leisure/vacation 9%.
Accommodations: 83% stay in hotels.
Stay length: mean average of 28 nights, but is influenced by a few staying for
a very long period of time. Median is 11 nights.
Activities: Chinese are less active travelers than average travelers.
•
•
OTTI tracks 25 Activities
Top activities 2007: Shopping (88%), Dining in Restaurants (80%), Sightseeing in Cities (51%), Visit
Historical Places (47%), Visit National Parks (29%), Visit Amusement/theme parks (28%) …..
Source: OTTI , Survey of International Air Travelers, 2007.
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
16
What is Known about China Outbound Travel
to the U.S.?
•
Trip Characteristics
–
–
–
–
–
(continued):
Gender: 70% male. Female proportion is increasing.
Age: Males—41 mean / 39 median; Females—36 mean / 35 median.
Income: lower than most origin countries.
• $63,900 (mean)
• $36,700 (median)
Spending: highest spending per traveler of any country ($5,200 at destinations,
i.e., excluding airfares). High spending relative to income may reflect saving
for “dream vacation” and souvenir purchases made on behalf of
friends/relatives.
Looking ahead:
•
Trip characteristics will likely change if group leisure increases.
Source: OTTI , Survey of International Air Travelers, 2007.
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
17
U.S. China MOU on Group Leisure Travel
•
Under to U.S. law Chinese can visit so long as they receive a
visa.
•
Under Chinese law, Chinese travel agencies can only sell
packaged leisure tours to Chinese to countries with whom
they have a bilateral agreement or ADS
•
In December 2007 U.S. China Tourism MOU Signed
• MOU implemented in 2 phases
–
–
Phase 1: July 2008 covers 9 provinces (over 70 % of the market)
Phase 2: U.S. is ready to implement when China agrees
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
18
U.S. China MOU on Group Leisure Travel
Key Provisions
• China National Tourism Administration (CNTA) authorized
travel agencies may work with tour operators who are
vetted by associations with programs approved by CNTA
• U.S. travel destinations able to market their brand in
China
• To date NTA is the only U.S. association with a program
• In China the Government sets and monitors standards
• In the US the industry sets and monitors standards.
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
19
Supply Side Considerations
•
•
Liberalized restricted agreement (no open skies)
Non-stop current cap of 10 flights/day per “side”
–
–
–
–
U.S. at cap (based on January non-stop OAG schedule.
China at half the cap level.
Thus, based on current caps, short-term growth in non-stop flights must
come from Chinese carriers. Long-term growth must come from
upward-adjusted caps.
57% of all traffic between China and U.S. (inbound+outbound) is nonstop. Non-stop is growing as a share of all traffic.
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
20
Who’s Flying Whom?
•
Traffic Mix:
–
–
US Flag = 58%, & Foreign Flag = 42% of total air traffic
62% U.S. Citizens vs. 38% Non-Citizens
• Chinese to the U.S.:
–
–
40% fly foreign flag carriers
60% of U.S. carriers
• Americans to China:
–
–
57% fly U.S. carriers
43% of foreign flag carriers
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
21
China Outbound Travel Study
• Purpose: to develop a fuller understanding of the China outbound travel
market in support of increasing tourism exports to the U.S.
• Collaboration among:
–
–
–
–
Alfred P. Sloan Foundation, Travel & Tourism Industry Center, University South Carolina
U.S. Department of Commerce, Office of Travel & Tourism Industries (OTT)
U.S. Travel Association
Over 20 U.S. destination and travel-industry partners
• Multi-phase comprehensive project:
–
–
–
–
Qualitative and quantitative components
Methods: Telephone / focus-group / in-depth interviews
Surveys of long-haul travelers, U.S. visitors, Chinese government officials, Chinese travel
trade
Focuses on Chinese long-haul travelers outside of Asia
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
22
China Outbound Travel Study Phases and Elements
Phase 1
Phase 2
Phase 3
telephone survey
in 11 Chinese cities
(n= 7,000)
11 customer focus
groups in 11 Chinese
cities (n=8/session)
Secondary Source Review
(Demographics,
Economics, Politics)
travel trade
interviews
(n=30)
phone interviews
in China
(n=1600)
government
official interviews
(n=20)
in-person customer
interviews in the U.S.
(n=400)
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
23
Phase I Telephone Survey
Methodology
•
Purpose: gain better understanding of Chinese long-haul travel
market
–
–
Potential of U.S. destinations and businesses
Chinese views of the U.S.
• Focus: on Chinese who…
–
–
–
Have traveled outside of China
Are at least somewhat likely to travel outside of China
Are at least somewhat likely to/interested in visiting the United States
• Method:
–
–
–
Telephone interview
7000 randomly selected Chinese adults, ages 18 and older from 11 urban areas
3 “tier 1” cities; 8 “tier 2 cities” accounting for virtually all outbound travel
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
24
Cities Surveyed
3 Tier 1; 8 Tier II
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
25
Outbound Travel
•
Low outbound travel incidence
–
–
–
•
8% 1+ leisure trips outside mainland China past 3 years
10% 1+ leisure trips outside Asia past 3 years
21% are “at least somewhat” likely to travel outside of Asia in the next two years
Most travel to nearby Asian countries
–
–
U.S. top non-Asian country (9%)
Most visitations connected to Landmark/Sightseeing cities and cities with China towns
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
26
Possible future travel
• 21% of Chinese “at least” somewhat likely to travel outside of China in
next two years
–
–
–
Most likely destinations are Asian
France ranked third (12%)
America ranked sixth (10%)
• 35% are “at least somewhat” Interested in traveling to America
–
A significant amount would like to but are unlikely to travel to America
• When asked to pick one dream destination
–
–
–
America was number one
Only two Asian countries made top ten
Difference between desire and perception of possible or likely
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
27
Chinese attitudes
• America is…
–
Dominant; Exciting; Successful
–
Friendly; Safe; Familiar
–
–
–
Learning and Discovery
Experiencing a different culture
Seeing something new and different
–
–
–
–
Seeing and experiencing something new and different important to Chinese tourist
Sightseeing cities, landmarks, and tourist attractions scored high
Rest and relaxation--scored moderately high.
Interest in traditional vacations to resorts & beaches was low. Chinese tourist has a
different ideas on rest & relaxation or how to facilitate it
• America isn’t
• Want to come to America to…
• Interests
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
28
Dream Destinations
The United States is the most frequently cited dream destination
for Chinese citizens, followed by France.
“Europe has a deep cultural
background and is full of historical
attractions. In addition, each
historical attraction has its own
style and this enables each
different country in Europe to
present a different culture.”
Traveler, Chongqing
“You can go to see the glaciers
and national parks in Canada –
such natural sceneries are the
most famous attractions of
Canada.”
Traveler, Wuhan
(n=7,000)
United States
13%
France
10%
Australia
7%
Japan
5%
United Kingdom
4%
Canada
4%
Singapore
4%
“The statue of Liberty is so famous
as a national symbol – I would be
eager to see it. The USA’s
advanced economy is another
attraction for me, as I want to
experience this in-person.“
Traveler, Xian
“Hollywood in LA and Disneyland –
such modern developments attract
me to the U.S. very much.”
Traveler, Wuhan
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
29
Activity Importance vs. U.S. Perception
44%
Historic/Heritage sites
35%
38%
Beach/Waterfront
34%
City sightseeing
National parks
Art galleries/Museums
Small
towns/Countryside
Extremely Important (5)
Chinese communities
U.S. Offers a lot (5)
“The performance by the native
37% Hawaiians was fantastic – it
34%
gave history and drama to us
tourists.”
Traveler, Guangzhou
31%
32%
“The buildings’ architecture in
New York was unique – every
31%
building had its own design and
27%
structure.”
Traveler, Wuhan
31%
28%
“The most impressive sight I
saw is the Grand Canyon – it is
really a miracle.”
28%
Traveler, Shenzhen
28%
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
30
Phase II Focus Groups
Methodology
•
Purpose: Qualitative assessment of…
–
–
–
–
•
views of the U.S. as a country and leisure destination
competing destinations
destination choice process
marketing insights for U.S. business and destinations to promote travel exports
Method:
–
–
8 participants per group
• 4 previous leisure travelers to the U.S. (or business trip with leisure component) in
past 3 years
• 4 previous leisure travelers to other long-haul destinations (or business trip with
leisure component) in past 3 years
One focus group in each of same 11 tier 1 and tier 2 cities from Phase I phone survey
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
31
Common Themes
• Desire and affinity to experience the outdoors and natural wonders
• Taking lots of pictures/ having ample time at sightseeing locations to take
lots of pictures
• Fear of violence in America/ wide spread gun owner ship
• The need to have mandarin translations/ uncomfortable with not knowing
what is said or is going on
• The feeling that Americans are nice but do not respect them or believe
they have money to spend and make our hospitality worth while
• Mandarin Hotline to contact incase of emergency
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
32
China Study Phase III
Traveler Segments
• USA Focus
Have visited the U.S. - 400 in person Interviews
• China Traveler Market
Phone Interviews with 1,600 Identified Chinese Travelers
– Outside Asia
Have traveled outside of Asia, but have not visited the U.S.
–
Within Asia
Have not traveled outside of Asia, but plan to (but not U.S.)
–
Potential
Have not traveled outside of Asia, but plan to (including the U.S.)
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
33
China Study Phase III
Focus of Questions
• Images of the U.S. as a Leisure Travel Destination
• Atmosphere or Mood of US Expected to Experience
• Distinctive Tourist Cities & States in U.S.
• Distinctive Tourist Attractions in the U.S.
• Activity Participation & Comparison of US to others
• Factors when deciding on a leisure destination, with
comparisons of the US to other destinations
•
Use of Media & MORE…………………….
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
34
Some Additional Sources of Information on China
• USTravel – China Study Phases I – III, see US Travel Website
• U.S. Department of Commerce
• Office of Travel & Tourism Industries – www.tinet.ita.doc.gov
–
–
–
–
Monthly Arrival Figures
Monthly Air Traffic Data to and from China
Annual Survey of Chinese Travelers to US & U.S. to China
Inbound Forecasts (2 per year) & Annual Spending Estimates
• U.S. Commercial Service Offices in China
–
–
See Website - http://trade.gov/cs/
Also Offering China Webinar February 18th - See OTTI TInews
Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce (February 2009)
35
Heather Hardwick
Vice President
Menlo Consulting
Heather Hardwick
• Specialty is marketing
analysis, strategic
planning, branding and
product development
• Strong expertise in
educational travel,
adventure travel, group
travel and cruising
• Frequent speaker
Examining the Outbound
Travel Market from China
Heather Hardwick
Vice President
Menlo Consulting Group
February 12, 2009
MENLO CONSULTING GROUP, INC.
China Market Overview
Most populous country in the
world
World’s fourth largest economy
World’s third largest country by
area
Key cities and gateways include
Beijing (15M), Shanghai (17.5M)
and Guangzhou (10M)
World’s #1 Internet users and
mobile communications users
MENLO CONSULTING GROUP, INC.
Most populous nation and growing
Population of China
1,400
1,360
Persons (Millions)
1,307
1,300
1,263
1,200
1,200
1,134
1,100
981
1,000
900
1980
1990
1995
2000
2006
2010p
Source: World Bank World Development Indicators; Chinese State Population and Family Planning Commission
MENLO CONSULTING GROUP, INC.
China’s Growing Middle Class
Number of Chinese Households in Middle Class
Households (Millions)
150
Lower Middle Class
(HHI ~USD 3K-5K)
125
100
75
Upper Middle Class
(HHI ~USD 5K-12.5K)
50
25
0
2005
2007
2009
2011
2015
Source: McKinsey Quarterly
MENLO CONSULTING GROUP, INC.
GDP is expected to continue to grow,
albeit at a somewhat slower rate
Year over Year Growth Rates (%)
Actual and Projected China GDP Growth Rates
12%
10.4% 11.1%
10.1%
11.4%
9.1%
10%
8.6%
8%
8.2%
8.5%
7.2%
6%
6.0%
4%
2%
0%
2004
2005
2006
2007
2008p
2009p
2010p 2011p
2012p
2013p
Sources: China National Bureau of Statistics; The Economist
MENLO CONSULTING GROUP, INC.
Chinese outbound travel is booming
Outbound travel from China and Hong Kong
41.0
Persons (millions)
40
34.5
28.9
30
31.0
20.2
20
10
16.6
8.4
9.2
10.5
1998
1999
2000
12.1
0
2001
2002
2003
2004
2005
2006
2007
Source: CNTA, compiled by Pacific Asia Travel Association (PATA)
MENLO CONSULTING GROUP, INC.
Double digit growth has become the norm
Growth rates in outbound travel from China and Hong Kong
Year over Year % Change
50%
42.8%
36.8%
40%
30%
20%
18.6%
15.9%
21.7%
7.5%
10%
0%
2001
2002
2003
2004
2005
11.3%
2006
12.3%
2007
2008
Sources: CNTA, PATA
MENLO CONSULTING GROUP, INC.
China’s growing travel spending
International Tourism Expenditures
29.8
30
24.3
USD (Billions)
21.8
19.1
20
13.1
13.9
2000
2001
15.4
15.2
2002
2003
10
0
2004
2005
2006
2007
Sources: UNWTO, China State Foreign Exchange Administration
MENLO CONSULTING GROUP, INC.
Most outbound travel is within Asia
Top Asia Pacific destinations for travelers from China
1,200,000
Travelers
1,000,000
Singapore
Vietnam
Thailand
Korea
Japan
Malaysia
Australia
USA
800,000
600,000
400,000
200,000
0
2004
2006
2007
Source: relevant NTOs, compiled by Pacific Asia Travel Association (PATA)
MENLO CONSULTING GROUP, INC.
Chinese travel to North America is
taking off
Arrivals to North America from China PRC
USA
400,000
Travelers
300,000
200,000
Canada
100,000
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
19
97
0
Source: Pacific Asia Travel Association (PATA)
MENLO CONSULTING GROUP, INC.
California has seen substantial
growth from China in recent years
Number of Visitors from China to CA, 1998-2007
(in 000s)
400
300
227
197
200
134
149
158
146
120
109
101
71
100
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: International Trade Administration, Office of Travel and Tourism Industries.
MENLO CONSULTING GROUP, INC.
California is making a move in the
market
California opened an office in China in January 2009
All (100%) Chinese view a Chinese Web site as the most
important way for them to learn about California.
Only 1% Chinese consumers and a handful of tour
operators and media reps have been to California.
Almost all Chinese know of Los Angeles and San Francisco.
They also have special ties to China as sister cities to
Guangzhou and Shanghai. One-third recognize San Diego.
Motivations for visiting California include nature/parks,
theme parks, and sunshine
Source: California Travel and Tourism Commission (CTTC)
MENLO CONSULTING GROUP, INC.
What drives Chinese tourists to
California?
Events/Activities
Consumer
Media
Tour Operator
Theme Parks
2
1
1
National Parks & World Heritage
1
2
2
Shopping
3
3
4
Entertainment & Nightlife
4
4
6
Art & Culture
2
5
5
Wine & Food
5
6
3
Source: California Travel and Tourism Commission (CTTC)
MENLO CONSULTING GROUP, INC.
Outlook for China
Continuing, albeit slowed, economic growth
Growth in outbound travel is expected to continue
Increasing linkages to international destinations and
organizations
Competition for the Chinese traveler intensifying
With the MOU, and increased marketing in China,
the USA stands to benefit from strong inbound traffic
MENLO CONSULTING GROUP, INC.
mCG
MENLO CONSULTING GROUP
PALO ALTO, CALIFORNIA
www.menloconsulting.com
MENLO CONSULTING GROUP, INC.
Frank Haas
Assistant Dean
University of Hawaii
School of Travel Industry
Management
Frank Haas
• Teaches courses in
marketing and Executive
Development in Tourism
Program
• Undertaken planning
projects for tourism,
government and nonprofit corporations
• Formerly VP Marketing
Hawaii Tourist Authority
• $50 million dollar budget
The Chinese Travel Market:
Open Carefully
Frank Haas
University of Hawai‘i at Mānoa
School of Travel Industry Management
In China …
Everything is possible –
Nothing is easy
In China …
Negotiation starts
After the contract is
signed
Bottom Line
Huge potential … but developing
the potential will take work
Responsible Development
• Hysteria … or irrational exuberance
– 100 million outbound tourists by 2020
– 25 million outbound overnight trips in 2006 … 350%
increase since 1997
• Reality …
– A significant and growing market, but …
– 16.3 million of the 25.3M travelled to Hong Kong or
Macau (64%)
– 392.6 U.S. arrivals in 2007 – projected to 578.5 in
2011 (rank = 20)
Good News: Time for Orderly
Development
Motivation for Hong Kong and
Macau Travel
What We Can Learn from the
Development of the Japan
Market in Hawai‘i
To cover …
• Be prepared for culture shock …
– Learn from experience
• The China market we’ve seen recently
probably isn’t the market post MOA
• Relationships matter
• What we’ve seen with our 56,000 Chinese
visitors
Total
Domestic
International
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
19
73
19
71
19
69
19
67
19
65
19
63
19
61
19
59
19
57
19
55
19
53
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
19
51
Thousands
Historical Trends (arrivals)
International Arrivals Percent
40%
35%
30%
25%
20%
15%
10%
5%
19
51
19
54
19
57
19
60
19
63
19
66
19
69
19
72
19
75
19
78
19
81
19
84
19
87
0%
International Arrivals Percent
40%
35%
Early 70s – Hawai‘i
Gets Serious
30%
25%
20%
15%
10%
5%
19
51
19
54
19
57
19
60
19
63
19
66
19
69
19
72
19
75
19
78
19
81
19
84
19
87
0%
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
Chinese Arrivals in Hawai‘i
60,000
50,000
40,000
30,000
20,000
10,000
0
Chinese Arrivals % of Total
0.9%
0.8%
0.7%
0.6%
0.5%
0.4%
0.3%
0.2%
0.1%
20
07
20
05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
0.0%
Opening a huge new market
means dealing with first time
travelers … and first time
encounters with Western culture
Culture Shock
Problem: Destination Was Focused
on Domestic Visitors
• Limited staff possessing multiple language
skills
– Japanese visitors were dependent on
Japanese speaking guides
– Confusion in accommodations
• Hotel amenities weren’t culturally
appropriate; fixtures were “foreign”
• Lack of appropriate experiences –
especially food
Language Limitations
• Visitors were dependent on their guides
• Guides were often driven by commission
• Result: visitors didn’t always get an ideal
experience … and satisfaction suffered
• Guided tours caused large groups to visit
attractions, restaurants, etc. en masse,
overwhelming capacity
Confusion in Accommodations
• As the Japan market developed, first time
visitors encountered strange/unexpected
features and fixtures …
– How to work the plumbing?? Electrical
appliances?? Call the front desk and no one
speaks Japanese
– No green tea/teapots in the room
– No drains in the bathroom floor
Lack of Appropriate Experiences
• Japanese were consumers of mass
tourism as westerners were becoming
more independent
• Japanese wanted quality Japanese food
… breakfast, lunch and dinner
• No tipping
Cultural Differences
• Visitors carried large amounts of cash …
vulnerable to robberies and purse
snatchings
• Prevalence of smoking
• Golf
What we were selling …
The Retail Experience
What they wanted to buy …
Solutions Came with Critical
Mass
The French Festival
Chinese visitors … so far … have
not mimicked the early Japan
visitor
Because of lack of Approved
Destination Status and entry
restrictions …
Chinese visitors to date
have been senior
government and business
officials
Visitor Spending
$US Per Person Per Day
US West
$155.90
US East
$192.80
Japan
$268.80
China
$377.20
Some Emerging Issues
(2003 Hawai‘i Post Arrival Survey)
• Chinese food (especially good Chinese
food) is a driver of satisfaction
• Language barriers were linked to
perceived cultural discrimination
• Negatives …
– Service quality (knowledgeable in Chinese
service expectations)
– Time constraints (guides pushing too many
activities)
If Chinese tourism booms …
there will be a change in
character as class goes to mass
What We Think We’ll See
• Shopping will include “authentic” luxury items …
and …
• Gifts and souvenirs for family and friends at
home … and
• Vitamins, supplements and other “safe” products
• Chinatowns and China connections are a draw
• Need for acceptance of Chinese credit (China
Union Pay)
• More Chinese speaking staff … through
training or new hires
– HTA contract with the Community College
system
• Developing retail, food and beverage and
hotel amenities that appeal to the Chinese
• Learn to manage diverse cultures in the
visitor mix
• Political events pose a risk
• Over time, we’ll see the market evolve
from GIT PITFIT
– The market to Hawai‘i is about 30% FIT at the
moment, but that will change with volume
• Satisfaction may be sub-par until language
and product are aligned … feeling of
cultural discrimination
• Prepare for cultural differences – i.e.
tipping, smoking, group mentality
Relationships Count
Titles and Official Status
Matter
Understand that we have
competition … regional Asian
travel
Mahalo … Arigato … Xie Xie
谢谢