The China Inbound Market: Opportunities and Challenges

by Barbara Peterson
The China Inbound Market: Opportunities and Challenges

Travel to the U.S. from China is booming --- with the number of annual visitors expected to double to nearly five million in the next four years.

For U.S. tour operators and travel agencies who work with--or tap into inbound tourism—this market presents both significant opportunities and challenges.

The National Tour Association (NTA), in fact, recently sent a delegation to China to meet with travel business leaders and other officials to discuss ways of further developing this business – which really took off with the easing of U.S. visa restrictions two  years ago.

The wait for a Chinese citizen to obtain a U.S. tourist visa dropped from one to two months to three to five days, and late last year the U.S. expanded the validity of such visas from one to ten years.  

Third largest?
China is soon expected to become the third largest inbound tourism market in the U.S. after Canada and Mexico. It would supplant the U.K. which is currently third.

As another sign of change, NTA’s China Inbound Program, which provides networking and training support, topped 200 tour operator members this year.

NTA President Pam Inman, who led the mission to Beijing earlier this month, said that “the opportunities for more business in the U.S. are enormous,” given the spending power of the rising middle class in the world’s most populous country.

“One of the company leaders we met with did a billion dollars of outbound business last year,” Inman added.  

Chinese tourists spend an average of $6,000 per person in the U.S., the highest of any country they visit, according to Brand USA.

Being prepared
But while those kinds of numbers are impressive, not any U.S. company can just jump in.  

Haybina Hao, NTA’s director of international development, said that part of the purpose of the recent mission was that “we want to really help our members to be educated about this market’s potential.”

But it’s critical to understand the market and that means, most importantly, having someone bilingual on staff,” said Hao.

“It’s a scary market for some because it’s so complex, culturally, politically and the way the Chinese do business, ” said Hao.
The majority of operators in NTA’s China inbound program are Chinese-American companies, according to Hao.

“They have the contacts but may not be as well-versed with the U.S. market.”

Mainstream tour ops
But the small number of “mainstream” operators who have tapped into this business shows that it can be done, Hao added.

One example she cited is Passage Tours of Winona Minn., which has a Beijing representative and arranges student groups to the U.S.

The first thing to do is “to have someone on the reception side who is fluent in Chinese,” she explained.  “Most Chinese tourists don’t speak English, and the entire tour process needs to be handled in Mandarin.”

The Chinese tourist
A typical first trip for Chinese tourists is a conventional two-week itinerary including major cities on the two coasts and points in between like a national park or Las Vegas, according to Hao.

Harry Chen, NTA board member and owner of Joy Holidays in Milbrae, Calif. noted that interest is broadening beyond the requisite sites.

“Besides the iconic cities like New York, Los Angeles and San Francisco, rapidly developing destinations are second tier cities like Miami, Chicago and Boston,” said Chen, who was also part of the recent trip to China.

FIT travel is also on the rise, said Chen.

That’s because many Chinese visitors to the U.S. are already familiar with the country, having studied or done business here. Many also have relatives who are studying or living in the U.S.  

Second or third time visitors often have moderate to fluent English skills, which ultimately could open up more opportunities for travel companies here, Chen said.

And while the majority of Chinese tourists take an organized tour, more are going further afield.

Chen said a recent trend is the rapid rise in RV travel, especially to national park campgrounds.  

“Yellowstone is rapidly gaining popularity in China, and other less visited parks are getting more FIT visitors.”  

Cultural differences
Then there’s the matter of what might politely be described as cultural differences.  

The Chinese government recently took the unusual step of issuing a strict guide to etiquette for its citizens traveling abroad in response to accounts of tour groups behaving boorishly.  

According to news reports, the government will develop a “national database on misbehaving tourists”  with records of infractions being kept up to two years  - during which time the offender could conceivably be barred from flying abroad.

The edict specifically warns against “causing disturbances on public transport, damaging cultural relics, ignoring social customs and engaging in gambling or prostitution.”

No word on whether that’ll rule out playing the slot machines at Las Vegas.

  2
  0
Tip of the Day

Believe it or not if you're not packaging events and selling them, your customers are likely doing it for themselves.

Lynn Fuhler

Daily Top List

The World’s Top 5 Airports

1. Changi Airport, Singapore

2. Hong Kong International Airport, Hong Kong

3. Zurich Airport, Switzerland

4. Hamad International Airport, Doha

5. Schiphol Airport, Amsterdam, The Netherlands

Source: Wanderlust

TMR Recommendations
Top Stories
Festivals and Events Hold the Key to Growing Travel Agents’ Bottom Line
Festivals and Events Hold the Key to Growing Travel Agents’ Bottom Line

A former tourism director, who consults on festivals and events, offers agents a way to build their group business.

Headquarter Happenings: NEST’s Home-Based Travel Agents Gather in Orlando
Headquarter Happenings: NEST’s Home-Based Travel Agents Gather in Orlando

Experts talk about the importance of setting goals to help home-based agents build their businesses.

Where Do Travel Agents' Responsibilities to Clients Begin and End?
Where Do Travel Agents' Responsibilities to Clients Begin and End?

Modern legal thinking says the agent-client relationship begins with the first contact and only ends when the trip is concluded.

Travel Agents Can Attract Customers in the 'Consideration Phase' for Bigger Sales
Travel Agents Can Attract Customers in the 'Consideration Phase' for Bigger Sales

Travel industry experts advise targeting consumers during the “consideration phase” by having a brand that sells less and inspires people to travel more.

Advising the Wealthy: Travel Agents Need to Save Clients From Themselves
Advising the Wealthy: Travel Agents Need to Save Clients From Themselves

Successful travel advisors give tips on how to establish trust and become the travel confidant to the top 1-percenters.

As REAL ID Deadline Approaches, Having a Passport More Important than Ever
As REAL ID Deadline Approaches, Having a Passport More Important than Ever

As diplomatic relations toughen in the Trump White House, the REAL ID Act deadline may yet get some teeth—and travelers in many states may be required to show a passport for even domestic travel.

News Briefs
Advertiser's Voice
Advertiser's Voice: Royal Caribbean International