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Kish Rajan Headshot

China's Important Role in California's Tourism Industry

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This week as part of his first trip abroad since taking office, President Xi of China left Beijing, came to the United States and met with President Obama. It was an important visit between the leaders of the two biggest economies in the world on a range of important issues.

But unlike other official visits of this kind, the meeting with President Obama and President Xi didn't take place in Washington D.C. The first official visit of the Chinese president abroad took place here, in California.

While the location of the meeting might be a little unusual, the visit itself is unsurprising. California and China have strong economic, cultural and historic ties. And when it comes to seeing the visit from a tourism perspective, the Chinese President is following the lead of his nation.

It's no secret that the California travel and tourism industry is one of the economic powerhouses of our state. For the first time in 2011, our tourism economy broke the $100 billion mark in annual business revenue. That's not just tops in the nation, but the 10th largest tourism economy in the world.

What might not be known is the role China plays in our tourism economy.

China is California's fastest growing and most lucrative inbound tourism market with over 718,000 visitors in 2012. That's nearly three quarters of a million Chinese visitors visiting our cities and national parks and shopping destinations - and spending money as they go. That's almost 50 percent of the total U.S. tourism market share of Chinese visitors. It's an impressive number. That is until you hear how MUCH those visitors actually spend.

Then it's a lot more impressive.

The average visitor from China spends over $2,900 on their trip -- significantly more than the average overseas tourist. Their spending power generates more than $2 billion in revenue for California accommodation, transportation, attractions, entertainment, restaurants and retail sectors across California. That's 718,000 visitors from China every year, spending an average of almost $3,000 each and contributing directly into California communities they're a part of. If you can visit somewhere in California to enjoy it, there's a job that goes with your trip. Like I said, it's an impressive number for California.

But let me make it a little better.

Chinese visitors to California are expected to increase another 53 percent by 2015. That means, in the next two years we will be welcoming more than one million visitors from China annually. Over a million visitors that traditionally stay longer and spend more than the average overseas tourists.

This benefits every corner of California. The report released by Visit California details the economic impacts of travel to and through California from 1992 to 2012 shows rural counties gain as much from foreign and out-of-state travelers as urban areas, with the benefits being seen from Alameda to Yuba counties. The study shows that in 2011 in the less populated counties of Mariposa and Mono, visitor-generated state sales tax receipts account for more than half of the taxes -- 57.5 percent and 54.8 percent respectively, collected for each county. Larger counties benefit from tourism as well. Also in 2011, tourists spent more than $22 billion in Los Angeles, more than $12 billion in San Diego, and more than $11 billion in San Francisco.

All this is to point out, that, when it comes to the tourism relationship with China, California not only benefits from Chinese visitors today but stands to benefit even more tomorrow. Future tourism development -- from expansion of air routes to direct Chinese tourism investment to coordinated marketing opportunities -- are all efforts that have a direct benefit on California's economy and must be a priority.

But what's important today is showing some Golden State hospitality to Chinese President Xi for his visit. The leaders of China and the Chinese people were gracious, warm and welcoming during our trade mission in April. We owe their President the same kind of welcome for our reputation, our relationship and our economy.

Going by the thousands of Chinese tourists that enjoy California's hotels, restaurants and beaches every day, I'm sure you'll do just fine.