Americantours International Chairman/ CEO Noel Hentschel with China’s ‘big five’ tour operators
China Traveller
May 2009
Next month will be the one year anniversary of the United States receiving Approved Destination Status (ADS) from the China National Tourism Authority, an approval that allows for group tourist travel to the US. But for all the hype that has been following China for some time now, is this really a market that can live up to expectations?
It is no secret that the US remains one of the most attractive destinations on earth for aspiring Chinese travellers, for a number of reasons. Home to countless international icons made famous through Hollywood, there is genuine hype surrounding brand America in China. In addition to the tourist spots many local consumers simply wish to visit the US out of curiosity as the world’s most powerful nation, something not easily missed on the citizens of an aspiring super power.
A further advantage for brand America as a tourist destination is its international economic and educational prowess. Most countries attracting Chinese tourists started off initially with ADS and since then have migrated to sharpen their FIT strategies in the current maturing of the market to attract non-group individual travellers. For the US the opposite holds true. The US has attracted significant numbers of Chinese travellers to date for various purposes but under business and/or student visas. Due to its experience in attracting these independent travellers, the US will have little difficulty in rolling out holistic promotional campaigns targeting both groups as well as independents.
Official Chinese statistics indicate that 46 million of its citizens travelled abroad in 2008 (Hong Kong & Macau included in outbound category) whilst the United States received around half a million mainland travellers meaning that a mere 1% of China’s total outbound travellers arrived on US shores for the year. Impressive growth is clearly evident already however as the city of Los Angeles has seen a growth in Chinese arrivals of 20-30% since ADS as opposed to an average of 10% growth before.
The past year has seen a flurry of activity on both sides of the Pacific to ensure that this untapped market receives its due attention. Tour operators have been leading the charge, the vehicle for unlocking the considerable market, evident recently at a press conference launch of the Trust Travel Alliance (TTA), an alliance comprising Americantours International, and the big five Chinese tour operators CITS, CTS, CYTS, China Comfort Travel and CITIC Travel in Beijing. TTA officially launched three tour packages at the press conference with departures to start within a matter of months.
For all its potential however, the US remains a destination with too many attractions to choose from. While on the whole all US states and cities will benefit from the growth of Chinese tourist arrivals, the current market environment will punish complacency and reward the proactive. Case in point, the LA Convention & Visitor’s Bureau was the first city level US tourism office to be approved by CNTA and embarked on promotions in China from 2006. As can be seen in our interview with LA INC in this edition, the bureau is already reaping the rewards. According to a recent LA Times article the California Travel & Tourism Commission also recently established a presence in China’s 1st tier cities of Beijing, Shanghai and Guangzhou. Most of the state/city tourism bureaus are visible at the industry trade shows in China but standard China business practice dictates that a transitory presence is no presence at all.
The recession in the US with the accompanied budget cuts does not help matters and understandably many tourism bureaus have their hands tied in promoting themselves in China. The current global economic downturn is cyclical however and there are a number of bureau’s preparing the ground for when the crisis lifts in order to take full advantage of a new bullish market. While promotions of any type are never free of cost, there are creative alternatives (co-branding, Web 2.0 etc.) to spending money in an efficient and effective manner (Heightened Competition with Dwindling Resources Requires a Strategic Shift) that would be more appropriate to bureaus operating on a shoestring.
Encouraging signs of significant growth in Chinese travel arrivals to the US are already evident. LA reported strong growth in the month of January while ADS teething problems seem to have been overcome with the launch of the Trust Travel Alliance and other similar initiatives. With Chinese consumers’ keen interest in travelling to the US coupled with the limited effects of the financial crisis on the local market, the only question which remains is how market share is going to be carved up between competing US states and cities.
