Last fall, a former Chinese employee of mine who goes by the Western name Marc, suddenly called me after more than a decade hiatus in our correspondence. He told me that he was now running his own travel company in Shanghai, and was in New York City leading a group of mid-level Chinese business managers on an incentive tour of the U.S. They had spent two weeks traveling across the country to major tourist destinations, and were now on the final day of their tour. Marc wanted to get together during a few hours of free time he had while his tour members did some last minute-shopping on Fifth Avenue before their scheduled to return to Shanghai the following morning.
After meeting for a beer in midtown, I walked with Marc to the corner of Fifth Avenue and 43rd Street -- the agreed rendezvous point for his group members. At the appointed time, nine Chinese tourists arrived, each laden with multiple shopping bags: Saks Fifth Avenue, Coach, Louis Vuitton, Tiffany, and other luxury brands. When I commented knowingly on the volume of their purchases, Marc reminded me that there was actually much more I could not see tucked away inside each tour member's travel bag: luxury watches, jewelry, cosmetics, and other small-sized, high-end purchases. Before leaving, Marc asked me to point him towards Second Avenue where the group had been given a restaurant address for an "authentic American steak dinner." "Why walk over there when you can get a great steak just two blocks away on 45th Street just off Fifth," I asked. Marc agreed, so I escorted them up the street to Morton's Steakhouse, and then stayed briefly to get them seated and interpret for the waiter as they placed their order. "It'll be up to $100 per person," I cautioned Mark. "Mei wenti!" ("No problem!") he enthusiastically answered in Mandarin, without even the slightest hint of sticker-shock.
As yet another manifestation of China's well-documented "rise," Chinese travelers are now taking the world by storm. Nowhere is that more evident than in the top tourist cities and surrounding suburban areas in North America -- all the more so this week during the Chinese New Year holiday when Chinese tourism to the U.S. traditionally spikes. According to statistics from the U.S. Department of Homeland Security, Chinese tourist and business travelers exceeded 1 million in 2011 -- almost double the figure from 2007. That same year, annual Chinese visitor expenditures in the U.S. reached $7.7 billion, ranking China sixth among all nations for visitor expenditures and, for the first time, ahead of Germany. In Canada, Chinese tourists numbered almost 250,000 in 2011 -- a 50% increase over 2009. That year, Chinese aggregate tourist expenditures in the country were reported at $408 million.
Yet, as impressive as these numbers already are, they are still only the proverbial "tip of the iceberg." Three important forces will combine to produce a Chinese visitor profile in the coming years which will make current statistics appear modest by comparison:
- First, the continued pace of personal wealth accumulation in China will ensure that there will be a rapidly-expanding class of people with enough disposable income to start traveling abroad. Even as Chinese travelers are increasingly extending their personal interests, and share-of-visits, to many regions of the world, North America remains a key, aspirational, must-see destination.
- Secondly, a 2012 U.S. government-mandated increase in both the number of, and speed-of-processing for, non-immigrant visas granted to specifically to Chinese will facilitate even stronger growth in Chinese arrivals than has been seen in the last several years.
- Finally, the nascent push by some marketers in North America to both communicate with travelers prior to their departure from China, while more directly catering to them upon their arrival here in the form of culturally and linguistically relevant services and amenities, will result in stimulating even stronger "front end" demand for North American travel, as well as "back-end" traveler satisfaction, repeat visit, and referral. To date, early-movers in this arena include state, provincial (in Canada), and urban tourist authorities, some top hotel chains, and global luxury retailers.
For a much wider range of both big and small businesses in the U.S. and Canada, though, a huge opportunity waits. Capitalizing on this opportunity requires both developing a basic understanding of what Chinese travelers seek during their visits, and then taking concrete steps to become visible to them, and competently serve their needs.
Whether here on business or for pleasure, Chinese want to experience North America to the full extent possible -- for themselves, and also often as an important "badge" within their professional and social spheres back home. An ideal itinerary includes stops at world-famous destinations and sites, all with requisite photos to validate the visit. But a trip may also may include certain quintessentially North American experiences -- ranging from theater (e.g. Broadway musical), to certain spectator sports (e.g. basketball -- the NBA already has an ardent following in China), to various types of participatory recreation (casinos, theme parks, and others). And although Chinese are known to strongly adhere to their own cuisine even when they travel, they are still willing to venture out in the food realm to obtain "typical" experiences -- thus the "authentic American steak dinner."
Chinese are even more widely known for their shopping, and there is probably no more experienced "mission shopper." This is particularly true with respect to shopping for globally-branded luxury goods which, although available in China, are much more expensive there due to the imposition of double-to-triple digit taxes on such items. So, when visitors arrive from China to New York, Toronto, San Francisco, or Vancouver, they will actually save money at Coach, Louis Vuitton, Cartier, Rolex -- so much so that they often have a shopping list not just for themselves, but also for several family members and/or close friends. Although China is known for producing high-quality fake luxury goods, Chinese themselves typically want none of that. Only the real thing will do as a personal symbol, or gift, that conveys true status.
Of course, luxury items are not the only things Chinese would buy. In principle, they will be receptive a very wide range of other products, goods, and services that may not be globally known, but are considered "special," "high quality," "typically American," or "typically Canadian." All it takes is some carefully targeted promotion.
There are a variety of ways for businesses to engage Chinese travelers, ranging from fairly simple actions to more involved programming. To tap the Chinese tourist market which is, today, still dominated by organized tour groups, direct outreach to the largely Chinese-American and Chinese-Canadian inbound tour operators which manage such tourists can put a business "on the map." Such operators decide where the groups stay, where they eat, where they stop to shop, and what selection of leisure/entertainment activities they will engaged in. Alliances with such operators, including promotional information and/or incentives offered to their local U.S. and Canadian tour guides, can ease a business into this growing market.
Tour groups are inevitably given free time in central shopping districts of the cities they visit (or in nearby outlet malls), and businesses in such areas want to appeal to these tourists, as well as to the many Chinese business travelers that also frequent these locales. So, beyond the pre-planned sales stops that partnership with tour operators may bring, individual businesses need to be poised on their own to garner attention from Chinese travelers. To accomplish this, a series of fairly simple steps can go far: a welcome sign in Chinese characters on a store front or restaurant window, indoor signage and merchandising communications in Chinese. Where Chinese foot traffic has the potential to be the strongest (e.g., main shopping street, most famous tourist site), staffing at least one Mandarin-speaking service or sales associate can enhance the Chinese traveler experience and facilitate sales. When such staffing is not feasible, investing in a well-planned, Chinese-language brochure, menu, or other sales-oriented collateral materials can bridge linguistic and cultural barriers, while still conveying recognition and respect.
Chinese travelers are also very web-savvy, and are heavy users of social media -- not Facebook and Twitter but, rather, the largest social media sites in China: Sina Weibo, Tencent WeChat (http://www.wechat.com/en/), Tencent Weibo, Renren, and others. As is the growing practice of global brands seeking to engage Chinese consumers in China, businesses in North America which want to build their brands with Chinese travelers prior to their arrival can establish their identities and activity on such sites to create a "pull" for sales. Adding a Chinese-language landing page or microsite to an existing English language website would further allow Chinese travelers who encounter a business online to easily access more information, including product/service details, promotions, reservation mechanisms, etc.
North American businesses that recognize Chinese travelers now, and take some proactive steps to connect with them, will be ahead of the curve in tapping a still, relatively uncluttered opportunity. However, given the accelerated growth in this travel segment, it won't be long before everyone will want a piece of the action.