After two days with dozens of U.S. and Chinese travel experts at the 11th annual Brand USA U.S. – China Tourism Leadership Summit, here’s what I learned about the most massive travel market on the planet.
Last month, I was honored to be invited as a moderator to the 11th annual Brand USA U.S. – China Tourism Leadership Summit in Atlanta, Georgia.
The summit was an opportunity to build and strengthen the relationships between the U.S. and Chinese travel industries and provide a platform for discussion between tourism industry leaders and government officials from both countries.
My panel, titled “Tourism Development, Promotion and City Engagement,” focused on China’s rollout of its new “all-for-one” tourism demonstration zones to encourage local governments to integrate tourism resources to improve destination competitiveness internationally. In a national tourism industry that has long operated in silos (not surprising given the size, diversity and a scattered population of almost 1.4 billion people), the Chinese government, led by the China National Tourism Administration, is working to standardize best practices.
I was moved by Yu Ningning, president of the China International Travel Service Head Office, speaking about the importance of domestic travel in China and the role it plays in productivity and stress relief from increasingly kinetic urban life. Attendees heard Huang Xiaoping, Deputy General Secretary, Sichuan Government, poetically speak about the fresh water, lakes and rivers of his home, and the exciting preservation efforts underway. “To Sichuan, water is everything and needs to be ecologically improved,” he said. “We know there is work to be done. We don’t want to harm our Motherland here.”
Chen Xiaoping, Deputy Director General, Jiangxi Province Tourism Development Commission, reiterated a common theme over the two days: that to most Chinese, travel is a form of social currency that can enrich their lives by sharing it with their families and friends. The more exclusive and rare the story, the better the teller’s standing. This oral tradition, of course, applies perfectly to social media.
My panel also featured San Francisco EVP and CMO Howard Pickett, Travel Oregon CEO Todd Davidson, and NYC & Company President and CEO Fred Dixon. The North American experience discussed was one of tourism’s role in a city’s economic development.
All three leaders spoke about the importance of dispersing their increasingly growing tourism numbers around their destinations. Dixon spoke about NYC & Company’s plans to promote New York’s outer boroughs like Staten Island and its St. George development (the one with the New York Ferris wheel) that opens next year. “Typically tourists would get on the free Staten Island commuter ferry for the views, then get back on again and return to Manhattan,” he said. “Now they’ll stay on Staten Island for several hours.”
Dixon, a board member of Tourism Cares, the charitable community of the travel and tourism industry, also spoke at length about the need for sustained tourism development and investment in areas affected by natural disasters. “You can help a place dealing with the ravages of a hurricane, or earthquake, or wildfire by heading down when it’s safe to do so and help their economy get back on track,” he said while Caribbean hurricane alerts buzzed on attendee phones.
Needless to say it was an illuminating two days in Atlanta. Here are other takeaways about the opportunity presented by increasingly curious and empowered Chinese travelers into the U.S. and globally.
CHINESE TRAVELERS LOVE THE U.S.
The stat that was repeated over and over again used the U.S. – China Tourism Leadership Summit as a benchmark: When the Summit launched 11 years ago in 2006, there were 300,000 Chinese travelers visiting the U.S. A decade later, the number exploded to 3 million.
BUT THERE ARE HEADWINDS
According to Brand USA numbers cited at the summit, Chinese visitors shrunk by 1% in the first half of 2017 and outbound tourism from the country grew only 4% according to the most recent figures. Officials cited perceived barriers for foreign visitors under the current U.S. administration as one of the reasons for the visitor dip.
STILL, THE POTENTIAL IS STAGGERING
China will become the top overseas global tourism market for the U.S. by 2025, overtaking the UK. Only 220 million Chinese currently have passports, which is only approximately 16% of the country. That is less than half of U.S. totals. According to the State Department’s 2016 figures, 36% of Americans hold a passport. Imagine the global impact when more Chinese see travel as a worthwhile endeavour. The summit was peppered with predictions that China’s “Tier 2 Markets” are going to emerge fast, creating a second wave of first-time global tourists from the country.
INCREASINGLY, CHINESE TRAVELERS, NOT TOURISTS
FIT trips are among the fastest growing segments for Chinese tourism in the U.S. The so-called Fly and Drive market is the thin wedge in the push for new, fresh aspects of traditional destinations, according to Chinese officials in attendance. “We want to build on our first trips to New York and San Francisco,” said Yu Ningning, of the CITS Head Office. Brand USA is projecting that by 2018, almost half of Chinese travelers to the U.S. will be FIT (versus the more traditional group tours). To harness the demand, Brand USA is creating road trip itineraries and cinematic videos to seed Chinese social media. And speaking of which…
According to fascinating research presented by Alex Cheng, VP and GM of Baidu USA, 60% of the planet’s sharing economy is Chinese. “Word of mouth, recommendations and inspiration to emulate the adventures of your friends and family is a fundamental driver in China,” he says. He noted that key opinion leaders (KOLs) resonate more among the mainstream in China than in the U.S. Chinese influencers are also able to sell directly from their feeds, essentially closing the gap between recommendations and conversions in a way that doesn’t yet exist in the U.S.
Another gap—and opportunity for global vendors catering to Chinese travelers—is payment. We were told on multiple occasions how “the Chinese don’t use cash or credit.” Their payment method? Their phones, usually by way of Alipay and WechatPay. And Chinese travelers are consuming—and sharing—with their phones overwhelmingly. Entire travel platforms are dominating. Mafengwo, for example, is a Chinese travel social media site that enables users to share travel experiences with each other. “We are the new TripAdvisor,” said co-founder and COO Gang Lv. “In fact we’re superior due to our domination in China and mobile convenience.”
WANT MORE? GET IT AT THIS BRAND USA WEBINAR
The Atlanta event may have been invite only, but educating the marketplace about marketing to and receiving the Chinese traveler is part of Brand USA’s mandate. Their series of webinars is just one example. The next webinar is Thursday at 1 p.m. EST and covers SEO marketing in China. Best of all, it’s free and doesn’t require the risk of a middle seat to get there.