Advice to U.S. tourism and hospitality industry: Learn some Mandarin

As China's economy grows and stringent travel restrictions are relaxed, urban middle- to upper-class Chinese are increasing looking beyond their borders for travel. While a staggering 31 million Chinese traveled abroad in 2005, only 100,000 visited the United States. One reason is political — the U.S. has yet to apply to the Chinese government for "approved destinations status," a bilateral agreement allowing Chinese tourists to bypass consular formalities by allowing travel agents to handle all visa applications. Another reason is cultural: U.S. hotel, airline, and tourism industries should prepare for the new wave of Chinese tourists by studying up on their preferences — or risk losing out on the 50 million Chinese tourists expected to be traveling abroad annually by 2010.

As China's economy grows and stringent travel restrictions are relaxed, urban middle- to-upper-class Chinese are increasingly looking beyond their borders for travel. A staggering 31 million Chinese traveled abroad in 2005, up from 8.4 million in 1998. According to industry experts, this number will increase exponentially over the next few years. These mainland tourists represent an enormous source of revenue for the countries that can attract them over the coming decade.

Speaking in Shanghai at Third Annual Executive Forum in Shanghai hosted by the W. P. Carey School of Business and the Shanghai National Accounting Institute, Roger Dow, president and CEO of the Travel Industry of America said, "We know with all the research that we do that right here in China there are 250 million people who have the finances to travel anywhere in the world. I look at that 250 million and I say that is 250 million opportunities."

Many countries are already reporting swelling numbers of Chinese tourists, but the numbers visiting the United States over the last five years have steadily declined. Only 100,000 mainland Chinese tourists landed in the U.S. in 2005, down from the 200,000 in 2004 and 250,000 in 2000. The reasons are in part political.

The United States has yet to apply to the Chinese government for "approved destinations status" (ADS), a bilateral agreement that allows Chinese tourists to bypass consular formalities by allowing travel agents authorized by the China National Tourism Administration to handle all visa applications.

China has already established such agreements with over 100 countries, which already are reaping the benefits of Chinese tourist traffic. The United States successfully responded to a similar travel explosion from the East in the 1980s. Buoyed by their booming economy, thousands of camera-wielding Japanese began visiting America, mainly traveling to New York City and California.

The U.S. hospitality and travel industries rushed to accommodate the new guests. Japanese slippers and bathrobes appeared in hotel rooms while Japanese-speaking tour guides and hotel staff found themselves a hot commodity — all part of the attempt to attract a portion of the 17 million Japanese traveling abroad each year — a number that Chinese travelers have already nearly doubled.

Time to study up

Dow sees his country's late start as a chance to get ready. While awaiting the inevitable policy changes, he recommends that the U.S. hotel, airline, and tourism industries prepare for the new wave of Chinese tourists by studying up on their preferences — or risk losing out on the 50 million Chinese tourists expected to be traveling abroad annually by 2010. And 10 years after that, the number is expected to double. Changing Chinese perceptions of the United States may be the first step to bolstering its overall sexiness as a tourist destination.

To the Chinese, the United States has long been a professional and educational mecca. Popular Chinese soap operas often feature characters moving to U.S. cities for work (for example, in the recent popular drama "Beijinger in New York") or returning home triumphantly, Harvard degree in hand. Few characters, however, rave to their friends about the beaches of Miami or the breathtaking beauty of the Grand Canyon. Such accolades are almost exclusively reserved for European countries.

An understanding of what Chinese travelers like can be translated into a marketing campaign. The walls of Chinese travel agencies are papered with the lush landscapes of Asian countries like Indonesia and Thailand or the cobblestoned streets of European capitals. And while Westerners tend to visit Southeast Asian countries like Thailand for their beautiful sandy beaches and lush resorts, the Chinese often spend 10 days in Thailand without ever touching sand.

For cultural reasons, a majority of Chinese don't like to tan and many can't swim. Chinese tour groups in Thailand prefer to take pictures of deserted islands on daylong boat trips or drive through jungles on scenic bus tours. The challenge for the American travel industry is to understand these preferences in order to cater to Chinese visitors. Chinese-language guides at the country's national parks, multi-destination package tours, and Chinese-friendly maps and guidebooks of major cities all would facilitate Chinese travel in the U.S.

Chinese conceptions of the outside world are nebulous at best, so a good marketing campaign can do wonders. New television campaigns for Australia, Vietnam and Malaysia attract Chinese travelers with the promise of beautiful natural scenery and exotic lifestyles. These ads are crucial for planting the images and ideas that Chinese tourists will use to guide their future travel spending, says Dow. In 2004, Bavaria's tourist board invited a Shanghai television station to film a series about the region.

The board then launched a Chinese-language Web site. Following the series' debut, 110,000 Chinese visited the region — 64 percent more than in the previous year. For now, however, the majority of Chinese travelers are staying relatively close to home. Japan, Vietnam, South Korea, Russia, and Thailand were the most popular destinations for Chinese travelers last year.

Make way for shoppers

Besides enjoying good views, Chinese travelers also love to shop, even more so than their notoriously shopaholic Japanese counterparts. Industry research found that while Japanese tourists spend more on their accommodation than on souvenirs, a Chinese tourist in a developed nation scrimps on hotel costs in order to spend an average of $175 a day on merchandise. This presents both a great opportunity to retailers who can catch the Chinese eye and a challenge to American hotels that wish to entice them to increase their lodging budget.

Hotels in Europe, for example, are already making concessions for Chinese tourists. In Paris, a city that attracts a growing number of Chinese, all major hotels have Chinese speaking staff, breakfast menus now feature congee — a Chinese rice porridge — and rooms have Chinese-language TV channels. The United States has not yet made corresponding adjustments, analysts say. And these are only minor adjustments; you need only experience a Chinese hotel to recognize the vast difference in expectations.

Chinese hotels often act as entertainment centers, with hair salons, bowling alleys, Karaoke bars, and "game rooms" (casinos are illegal in China, but Chinese nationals lost over $72 billion in overseas casinos last year). Inside their rooms, Chinese expect a thermos of hot water for tea and cooler air temperatures. Recognizing and accommodating such differences will pay off for the American hotel industry.

For retailers, the problem is slightly more complicated. Because of the language barrier, Chinese tourists generally travel in tour groups on whirlwind multi-destination tours. How can retailers attract Chinese tourists as they zip from site to site, stopping only briefly and normally at prearranged shops and restaurants? Again, Europe provides examples of retail targeting.

On a side street off the Grande Place in Brussels, Chinese tourists perpetually crowd around the famous Mannequin Pis, a fountain of a little boy urinating. The site has proved so popular with Chinese tourists that over the last two years, all of the knickknack stores that once lined either side of the street have been replaced by shops that cater directly to the Chinese — the signs and prices are written in Chinese, and the store attendants are all native Chinese speakers.

Research shows that Chinese travelers are more likely to spend in a commercial environment that resembles home. Language aids in hotels, restaurants and other places that tourists frequent are thus important for attracting Chinese travelers. Analysts agree that consistent PR campaigns, tailored hotel experiences, and friendly retail environments will ensure a steady stream of Chinese tourists to American shores. Otherwise, the Chinese will easily take their tourist dollars elsewhere and the United States will miss out on an important economic and cultural exchange.

Bottom line:

• The United States is already lagging behind Europe and the rest of Asia in attracting Chinese tourists, a significant and expanding source of potential revenue.
• The U.S. travel and tourism industry needs to lobby the U.S. government to establish an "approved destination status" for Chinese tour groups with the Chinese government.
• Though Chinese consider the U.S. a great place to work or pursue higher education, few consider it a tourist destination. A well-planned marketing campaign could change Chinese perceptions and encourage tourism.
• Chinese expectations when traveling are very different from those of other tourists, including other Asians.
• In order to attract Chinese tourists, American hotels, museums, restaurants, and other tourist attractions should anticipate and accommodate Chinese travelers' needs.