Travel Marketers Aren’t Prepared for Flood of Affluent Chinese Tourists
Hotels, Airlines and Retailers Need to Cater to Language, Cuisine and Cultural Needs, Experts Tell ‘Thoughtful China’
Global hotel chains, airlines and luxury retailers can expect tens of millions of new customers from China in the coming years, but few Western companies are prepared for this influx or have a clear understanding of exactly what Chinese tourists require and expect for their yuan.
The growing number of affluent Chinese travelers “will completely change the face of tourism,” especially in hot destinations such as New York, Las Vegas, London and Paris, said Pierre Gervois, president-CEO of China Elite Focus, which specializes in affluent Chinese outbound tourism. “There will be an influx of wealthy travelers.”
China will overtake Japan as the world’s second-biggest tourism market by 2013. Sixty-six million Chinese will travel overseas this year — a 15% increase over 2010 — and that number is expected to reach 100 million by 2020, according to the World Tourism Organization.
Just a few years ago, few Chinese went further than shopping excursions to Hong Kong or gambling junkets to Macau organized by budget tour group operators. Today, Chinese tourists are more likely to be affluent independent travelers looking for customized experiences along with the comforts of home.
“Everyone stands to benefit because the Chinese market is growing so fast,” said Bruce Ryde, general manager of InterContinental Hotels’ Hotel Indigo Shanghai on the Bund, who appeared on this week’s episode of “Thoughtful China,” a video program produced in China.
But the global travel and tourism industry doesn’t understand these travelers yet. “The biggest issue is language,” Mr. Ryde said. “The Chinese traveler appreciates and needs a certain amount of translation [when] it comes to menus, hotel information and just general conversation. There needs to be some preparation.”
“The most important thing the hotels need to be thinking about is understanding and tapping into the cultural differences, and ensuring they understand what’s important to Chinese travelers,” said Gary Rosen, who recently resigned as senior VP and head of global operations for InterContinental Hotels Group.
Some hotel and retail chains have started to tap into this market. This summer both Hilton and Starwood introduced touches aimed at Chinese travelers such as stocking instant noodles, Chinese teas and tea kettles in mini-bars, offering Chinese TV channels and slippers in guest rooms, and serving congee (hot rice porridge) and dim sum at breakfast.
Food is especially important. Don’t be surprised, Mr. Gervois said, if Chinese tourists, both rich and poor, prefer instant noodles in the room over local cuisine.
Hilton and Starwood have also translated corporate websites, welcome letters and local sightseeing information into Chinese and hired dedicated front desk staff fluent in Mandarin.
The goal is to make them feel at home the same way Western hotel chains cater to Western travelers in Asia, said P.T. Black, “Thoughtful China’s” senior creative director in Shanghai. “If a hotel can provide Americans with a hamburger in Hanoi, then Chinese should get noodles in Nice.”
Luxury retailers and top tourism destinations such as the Louvre in Paris have followed suit. Many Chinese still don’t have Western credit cards, for example, so Harrods in London brought in 75 UnionPay machines “so Chinese can use their own local cards to get money out,” said Chloe Reuter, a luxury retail specialist based in Shanghai.
While Western companies struggle to adapt to Chinese travelers, Asian firms are trying to expand, such as Hong Kong-based Shangri-la Hotels & Resorts, which recently opened a five-star property in Paris.
“All the luxury hotels in Paris are really scared,” Mr. Gervois said. Their owners realize Shangri-la “knows exactly how to talk to wealthy Chinese travelers, what kind of food they expect, what kind of service they expect. I think Chinese bands with a lot of quality and content will really have big success expanding abroad.”
Foreign companies should also be working harder to provide online product information and reservation options in China, which has over 400 million internet users, Ms. Reuter said. There’s a missed opportunity for a global travel portal that curates news and information, she said. “Chinese spend hours, if not days, searching for information about where they want to go [but] no one is telling people, here’s your Chinese-language app for where you need to go shopping in Paris.”
| Leave a comment
The Obama administration has advocated for small businesses to push into global markets, and has set the goal of doubling U.S. exports by 2014. Today, only about one percent of small businesses export overseas. One of the biggest challenges for small companies wanting to export is communication, says Marc Meyer, a professor of entrepreneurship at Northeastern University. This is especially true in emerging markets like China where little is known about marketing and consumer culture. “These countries are fundamentally different from Western Europe and you need to go there and do your homework—learning the local selling culture, how your product will be sold and merchandised,” he says.
Interesting short video about how Tesco (Home Plus) is marketing online and offline in Korea. Creative marketing to grow international business. I think it is great to see the competitive nature where localization and innovation create huge results.
http://wimp.com/marketingcampaign/.
| Leave a comment
Yesterday marked a very important day for the State of Hawaii. It was the inaugural flight for China Eastern’s direct flight finally connecting Hawaii and China. Hawaii has numerous direct flights to Japan, Korea, Taiwan, but this is the first regularly scheduled flight to and from China. The HTA estimates more than 91,000 visitors from China will come to the State this year. This amounts to more than 60 million in spending for the state. With APEC right around the corner, a direct flight is a wonderful way to bridge the connection between our two lands. The Chinese are going to fall in love with this special place. I hope we can all seize the opportunity for a win win relationship.  I see Hawaii being a wonderful gateway to the mainland as well as an opportunity to find the country’s great products for export to China.
| Leave a commentWhile the US is the largest economy in the world (for now), it is also the most mature. Most would agree that the growth potential beyond our borders represents a far larger opportunity than what currently resides at home. Many companies, like Kraft Foods, are focusing on the greater opportunities for growth overseas. For example, China overtook the US as the largest Internet market in 2008. A year later, the largest country in the world became the largest automobile market.  The recent economic stagnation of the US economy have prompted many of the larger companies to look to new markets to stay competitive. Is your company doing the same?
| Leave a commentOur company was recently invited to join the White House Business Council’s roundtable discussion with local Hawaiian business leaders to discuss the state of American business and its relation to growing US exports. It was surprising to hear that less than 1% of American companies export. This means that of the 30 million US companies, only 280,000 are exporters. Of these 280,000 companies exporting, 58% of these companies only export to 1 market.  With the President’s new National Export Initiative to double exports in the next 5 years, what has to be done to achieve this? Over the next several months, we will be publishing articles looking at what US companies can do to expand exports. Also, as APEC is in November, and is only in the US, once every 21 years, we will be looking at some key APEC countries and what opportunities exist in these markets.
| Leave a commentLast week Tradewinds Global debuted its new website. The new site offers more resources and information for its existing customer base and new marketing tools to attract new clients. Please check back often as we have some exciting things planned for the website.
| 1 CommentAs of June 1st, Tradewinds Global is now located at 1088 Bishop Street #1128, Honolulu, Hawaii 96813. For a map and parking suggestions, please visit our contact page on our website.  If you are in the neighborhood please drop in and see our new offices.
| Leave a comment
