How American luxury hotels should communicate in 2018 to stay relevant

How to define the new trends in luxury travel? A new generation of wealthy individuals is evolving the concept of luxury travel. Luxury hotel marketing strategies must stay aligned with their customer base and think “outside the suite.”
Filip Boyen, CEO of Small Luxury Hotels of the World, comments: “Luxury travel used to be all about visiting certain destinations, being seen in the right place by the right people, and generally enjoying the high life in a more ostentatious manner, all while getting the exact same experience as everyone else. Luxury hotels reflected this, they were grand and provided people with a platform to enjoy themselves.”

A recent shift away from the hotel stay and towards the actual experience itself has caused luxury hotel marketing strategies to evolve quickly to meet the needs and expectations of their wealthy clientele.
Philippe Brown, founder at bespoke travel planners Brown and Hudson, explains, “With ideas like ‘Luxpedition’ we make challenging grand expeditions to the world’s most remote corners accessible to people who might otherwise be put off by arduous conditions. This has opened up a whole new market of mid-life crisis sufferers who would like to be Bear Grylls but want their comforts and moments of specific luxury.”
How then can the concept of luxury hotel marketing be adjusted accordingly to capture a market that still wants the luxury but also wants the unique experience too? The answer lies in staying true to the key luxury brand values of authenticity and quality, while also adding in the experience element as part of the holistic package.

Pierre Gervois, Founder of Gervois Hotel Rating, the New York based luxury hotel rating system for U.S. hotels added “ The new generation of wealthy travelers and guests are not like their parents, who were attracted by flashy hotels made to display the arrival in a new social status, but now are attentive to sophistication, refinement, and all the discreet details and signs of recognition of the new elite”

Albert Herrera, SVP of Global Product Partnerships at Virtuoso, says, “Authenticity has become a buzzword. It really does reflect the current trend of giving the guest something that is unique to that particular destination. Hotels started down the path of authenticity by offering a greater sense of place, especially with new builds. First it was apparent in the architecture and design, then with the furnishings and styling. From there, the concept has expanded to fully integrate local customs and cuisine, and provide the ability to fully explore or celebrate the culture.”
Herrera comments: “Hotels have done a great job of developing and partnering with their local communities to create experiences that highlight the destination. Whether it’s a morning run with the General Manager, sourcing the fresh catch of the day with the executive chef or even being an English teacher for a day to local schoolchildren, ‘living like a local’ is a trend that will continue.”
Another key feature of luxury hotel marketing is offering the ability to totally switch off from everyday life. Being immersed in a local culture and experiencing that life is one way to do this, but offering an out of this world experience is another.

Brown says: “We are regularly approached by clients who want to join our missions to explore the wreck of the Titanic and others looking to invest in a longer stay at the International Space Station, or to do something shorter with Virgin Galactic or with some of the other more interesting options.” Here the role of luxury hotel marketing is to offer the accommodation that supports the experience, maintaining the luxury while supporting the immersive element.
Personalization adds a great deal to this ethos. Today’s guests want their hotels to respond to them in a personalized and tailored way; they want to be recognized as an individual.

Gervois explains: “One of the issues in luxury hospitality in the last twenty years was the arrogance of staff, and the discriminatory practices on race, nationality, religion or gender identity, that went largely out of scrutiny and were tolerated by luxury hotel groups”.
“These unacceptable practices slowly start to be addressed, but we hear oftenly complaints from travelers who feel discriminated in the luxury hotel segment, and Gervois Hotel Rating fights to improve this issue with the industry.”, Gervois added.
However, this point applies both ways. Luxury hotel marketing should also take into consideration how the personality of the owners, management, and their staff contributes to the overall feel and experience of the hotel. This ties in well with the desire for authenticity and having a real experience.
Boyen explains: “Hotels are becoming more aware that their offerings need to go beyond that of the suites, butler, concierge – the hardware. Hotels just need to be themselves. They need to be mindful of the things that make them interesting to guests – be it their location, history, owner or vision – and not try to conform to fit in with any expectations of what a luxury hotel ‘should’ be.”
Ultimately, the way a wealthy traveller defines their ideal experience remains highly personal. Accordingly, best practice for today’s luxury hotel marketing experts is to leverage market research on their target clientele, as well as individual research on high-spending VIP guests, in order to understand their preferences and create a memorable experience–  both inside and outside the suite.

Pierre Gervois will speak at the UNFOLD BRICS luxury hospitality event in Dubai on March 20th, 2018

Conjoining the world of Art with Architecture and Culture, UNFOLD Art XChange entices the world’s premier private bankers, financial institutions, government authorities, public art agencies, spatial designers, real estate and hospitality professionals with insights, opportunities and new partnerships as well as attracts corporate collectors, private and public institutions worldwide through a series of Art Talks that will run from the 19th to 22nd of March to coincide with Dubai Art Week.

Pierre Gervois, Founder and President of Gervois Hotel Rating, the disruptive hotel rating system that makes Forbes stars and AAA diamonds look old fashioned, will deliver a speech about the importance of re-assessing the standards of hotel rating, in particular for the new generation of sophisticated travelers who are not impressed anymore by the mere lobby’s size or a 24h room service, but rather by elegance in decoration, truly warm service, and sustainability.

Currently rating 120 U.S. properties, highly curated and selected for the quality of their interior decoration and service, Gervois Hotel Rating is the new player in the hotel rating system field that has gone unchallenged for the past 50 years.

GERVOIS magazine now distributed to wealthy Chinese travelers members of the Shanghai Travelers’ Club

Wealthy Chinese travelers place the United States as their #1 travel & real estate investment destination.

GERVOIS magazine, a New York City based magazine, has been selected to be the new preferred global travel publication of the prestigious Shanghai Travelers’ Club, and is now distributed to its members.

GERVOIS magazine is proud to follow the steps of the iconic STC magazine, the Club’s own iconic travel magazine that has been published from 2008 to 2017.

Founded in Shanghai in 2008, the Shanghai Travelers’ Club is China’s most exclusive international luxury travel club for discerning Chinese global entrepreneurs and executives seeking experiential & authentic travel discoveries.

Its 12,000+ members have an average annual income of US$580K, travel overseas on average four times per year, and spend on average US$63,500 per year during their travels. 23% of them have invested in real estate internationally. Excluding their real estate investment abroad, they collectively spend & invest more than US$700M per year in travel related expenses.

As the vast majority of Chinese high net worth individuals who travel frequently overseas is now speaking Engligh fluently, the Shanghai Travelers’ Club members felt the need to partner with an English language luxury travel magazine.

The club has selected GERVOIS magazine for its acclaimed editorial content, featuring exceptional hotels, men’s fashion styling ideas, art investment, real estate investment, and their iconic travel photoshoots made by the New York based famous travel photographer EFDLT studio, Director of Photography.

Starting with the Spring 2018 issue, released on March 16th, GERVOIS magazine will proudly partner for the years to come with the Shanghai Travelers’ Club and invite its Chinese members to travel and discover the United States and the World in style.

GERVOIS magazine is produced by Legit Productions, NYC.

More informations about GERVOIS magazine:
http://www.gervoisrating.com/shanghai-travelers-club/

More informations about EFDLT studio, Director of Photography:

http://www.efdltstudio.com/

https://www.instagram.com/efdltstudio/

The Broadmoor hotel (CO), still rated #1 U.S. hotel by the just released influential Gervois Hotel Ratings 2018

The Gervois rating system is a hotel rating system created in 2016 by Pierre Gervois, the Founder of the prestigious Shanghai Travelers’ Club and frequent traveler in the United States. As Pierre has a following of wealthy Chinese travelers who trust him to choose their luxury holidays in the United States, no doubt the release of the 2018 Gervois Hotel Rating has more impact than the Forbes ratings for the Chinese Elite.

“Over the years, I have been disappointed by the numerous existing hotel rating systems” said Pierre Gervois. “Too often, there is a tendency to give too generous ratings to hotels members of luxury hotels chains, and to underrate independent boutique hotels”, he added.

Based on these facts, Pierre Gervois has created an entirely new hotel rating system, purely based on the sole merits of each property, considered alone, regardless of its association to a hotel chain, an affiliation program, other rating systems, or online reviews. Every hotel is rated professionally and independently, without any preconception about the property.

With 117 rated properties (33 new properties have joined in 2018 the prestigious ranks of the Gervois rated properties), this year’s ratings put a focus on the traveler’s experience rather than on old fashioned luxury.

The Broadmoor (Colorado Springs) is still #1 hotel, with 93pts, in recognition of the exceptional quality of service and dining, both unmatched at this level in any other property.

Four hotels make a remarked entry in the 2018 Gervois ratings with above 90pts ratings: The Ritz-Carlton Philadelphia (91pts), the Langham Boston (90pts), The Blackstone Chicago (90pts) and the Montana Paws-Up Ranch (90pts).

Independent properties with an incredible charm and authenticity make also the cut for the 2018 ratings. Amongst our favorites are Inn at Cuckolds Lighthouse (89pts), The High Lonesome Ranch (88pts), El Cosmico (87pts), Pioneertown Motel (86pts), and Casa Hudson (84pts).

As the Gervois Hotel Ratings are famous for their blunt and brutally honest ratings, some hotels get searing and hilarious reviews in 2018, in particular for uninspired decoration and failed interior design.

But on a more serious side, some high end hotels are reminded that disrespectful or discriminatory behavior with guests -Chinese or not- is unacceptable and must be quickly corrected through appropriate staff training.

For hoteliers, receiving the reviews like “The service is cold and sometimes condescending with guests who do not look affluent enough to the taste of the hotel’s employees” or “The training of the front desk staff should be seriously improved as the customer service sometimes reaches unacceptably low levels” must definitely trigger additional staff training sessions…

“Gervois Hotel Rating is on the discerning, multicultural and sophisticated traveler’s side, not on the hotel booking business’ side” concluded Mr Gervois.

The Gervois Hotel Rating rate hotels according to five essential criteria: Location, Building, Atmosphere, Dining and Service, each rated on a 20 points scale. The addition of the points give the final rating, on a 100 points scale.

The 2018 Gervois Hotel Ratings are available on www.gervoisrating.com

Also available on
Twitter: https://twitter.com/GervoisRating
Instagram: https://www.instagram.com/gervoisrating/
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GERVOIS magazine is a Legit Productions publications.

Chinese tourists don’t just duty-free shop in the U.S.: They also invest in real estate ($100 billion in 2016). Why do U.S. real estate companies communicate so poorly with them?

The number of Chinese tourists traveling the globe has increased significantly for the last ten years, making them the largest group of travelers in the world. Now, thanks in part to a recent agreement between the U.S. and China to extend visas for short-term business travelers, tourists and students, the U.S. could see an increase in Chinese travelers in the near future.

This trend is supported by research from the latest Chinese International Travel Monitor (CITM) from Hotels.com which reveals the U.S. is the second most popular destination for Chinese travelers to visit in the next 12 months (behind France), with popular U.S. landmarks like the Grand Canyon and the Statue of Liberty topping travel wish lists.
The CITM research also identifies that, while cities in Asia Pacific remain the most popular (82 percent of Chinese travelers have visited in the past 12 months), visitors to Europe and America have increased with a year over year growth of 25 percent and 11 percent, respectively. These destinations were particularly popular with millennial travelers, with 42 percent visiting Europe and 29 percent visiting America in the past 12 months.

“The CITM reveals that the United States is one of the top five countries Chinese travelers visit the most,” said Josh Belkin, vice president and GM of the Hotels.com brand. “With tens of thousands of places to stay across the U.S., like distinctive boutiques, spacious vacation rentals and familiar chains, our site and mobile app have the perfect places for Chinese travelers of all ages and lifestyles.”

In 2016, there were 122 million outbound Chinese tourists – four percent more than in 2015 and a massive 74 percent more than in 2011, when the first CITM was published. China is already the largest source of international travelers for many countries – despite the fact only 10 percent of the population had passports in 2016.

“Chinese travelers in the United States tend to be more affluent than those who choose other destinations”, said Pierre Gervois, CEO of China Elite Focus Magazines LLC and Publisher of the STC magazine, a luxury travel digital publication in Chinese Mandarin. “Real Estate investment in the United States is now the #1 real reason – and rarely stated in surveys – for affluent and wealthy Chinese outbound travelers, as they have acquired for $100 billion in U.S. Real Estate in 2016”

Source: CITM, hotels.com, STC magazine, Chinese Tourists Blog

U.S. Hotels & destinations should now communicate in English with Millennial Chinese Travelers

They speak English now (Just in case you didn’t notice).

They are the millennial Chinese travelers in the United States.

They are the Chinese tourists coming to discover the United States of America and to buy high quality Made in USA products.

They are the Chinese businessmen and businesswomen coming to invest in American companies and create U.S. jobs.

They are the smart Chinese millennial entrepreneurs coming to America to create start ups and contribute to America’s leadership in future technologies.

They are the Chinese guests fed up to be disrespected in luxury hotels when asking if they really can afford to pay for a suite when they ask for one and are offered first the cheapest room available.

They are the Chinese businessmen walking into a bespoke suit company in New York City and asking for a hand made in America suit because they also deserve to wear the finest clothes. (No, they are not only interested in “I Love NY” Made in China T-shirts)

They are the Chinese travelers annoyed to be depicted by U.S. marketing agencies as using only Chinese social media networks such as Weibo and WeChat, when they are actually using Instagram, Twitter and Facebook to stay in touch with their U.S. friends and freely discover the world.

They are the tourists who have spent $40Billion in the U.S. in 2016

They are the LGBTQ+ Chinese travelers wanting to be as respected as any other tourist and find safe places to just be who they are.

They are the Chinese shoppers who find utterly ridiculous when Western luxury brands add a dragon or a Chinese symbol on a watch or a handbag and expect that they’ll specifically want to buy this model.

They are the Chinese tourists who are grateful for the warm welcome they have received by American people when they were doing horseback riding or cowboy shooting. (Yes, they are not only obsessed by shopping in large shopping malls but want to discover the various aspects of America’s culture and heritage).

They are the Chinese travelers who are proud of their Chinese cultural heritage and Chinese language, but who also speak English and prefer to read in English original stories about the United States.

They are the Chinese travelers who are fluent in English and understand exactly what some people say about them when they are traveling overseas.

Actually, they are exactly the same as any other traveler in America.

By Pierre Gervois, Founder of Gervois Hotel Rating, Publisher of Gervois Magazine, Hospitality & tourism keynote speaker and expert about marketing to outbound Chinese tourists.

How Bloomingdale’s get it right with Chinese shoppers in NYC: They focus on the emotional connection, not on payment methods

The growing purchasing power of affluent Chinese travelers is making it more important than ever for luxury brands and luxury retail brands to adopt marketing strategies to target them. With Chinese third-party mobile payment systems like Alipay and WeChat Pay beginning to set up shop in popular global tourist destinations, catering to this traveling consumer is becoming easier to do, but it’s not a brand’s only option.

Digital intelligence firm L2’s recent report “Cross-Border and Travel Retail: Connecting Digitally with China’s Shoppers” discusses ways brands can be targeting consumers online both during their journey overseas and before they set off.

“[Luxury brands] are under-serving the traveling Chinese consumer, whether it’s through their own brand site and its functionality and capability, their WeChat account, or from leveraging things like WeChat Pay and Alipay,” said Danielle Bailey, head of Asia Pacific Research at L2. “It’s a huge missed opportunity for them to not engage on these platforms that Chinese consumers are using all the time. Their phone is their number one travel accessory.”

Brands that do engage consumers digitally abroad with an omnichannel approach are using platforms like Alipay’s “Overseas Travel Channel (支付宝境外游)” to give travelers exclusive gifts, better exchange rates, or let them find deals near where they’re going, all within the app on their mobile device. WeChat’s website within an app feature gives consumers the opportunity to reserve a product online to pick up in a store and access store locators in their own language that they can hand to a taxi driver en route.
But about half of Chinese travelers are doing research on what they want to buy abroad before they leave, and luxury brands have been adopting strategies to target these consumers, according to L2.

In a dissent opinion, Pierre Gervois, Publisher of the STC magazine, a digital travel media in Chinese Mandarin, said “The most important for retailers is not the way Chinese shoppers are going to pay. It’s a technicality. Chinese Customers who want to make a purchase have plenty of options: Cash, credit Cards or WeChat Pay.  The really important thing to do is to convince them to choose a particular retailer”
“Too oftenly, we see U.S. retailers being obsessed by Chinese mobile payment systems when their strategy should be focused on branding their image to Chinese millennial travelers, and create an emotional connection with their future customers, based on their brand values”, Gervois added.

A good starting point is to provide an international store locator on their official online store in China, a strategy about 72 percent of brands employ. However, brands can also take it a step further by adding a Chinese-language travel retail site that let shoppers research the products, compare prices, read reviews, view maps that direct them to duty free shops, and even let them purchase the product online in advance so that they can simply pick it up at the airport if they’re in a hurry.
To help consumers find these pages, brands are paying for search term generated Baidu ads. L2 lists the efforts of beauty brands as an example—many brands pay for cosmetics-related key words, while others, like Lancôme, are taking a more travel-centric approach, targeting consumers researching phrases like “South Korean vacation.”

Some high end retailers, such as Bloomingdale’s, choose a more qualitative approach, and advertise in luxury digital travel publications about the U.S., like the STC magazine, available for mobile but also in digital inflight entertainment.

With a very creative advertising campaign created by China Elite Focus Magazines in New York, they organized interviews of actual Mainland Chinese customers while shopping at their Third avenue flagship store.  The story of six actual Chinese Bloomingdale’s customers has been published in the digital edition of the STC magazine: It has much more impact than buying keywords on Chinese search engines and directly talked to the heart of Chinese consumers.

While maintaining an engaging physical presence in airports and shopping malls is always important for marketing to the Chinese shopper abroad, brands that understand how to make the most of China’s digital sphere are likely going to more efficiently connect with Chinese travelers who are in the process of creating their luxury goods shopping list for their next overseas vacation.

Source: Jing Daily / Skift / Chinese Tourists Blog

Luxury brands might have forgotten that wealthy Chinese customers needed a good in-store service.

Kering, the French luxury group, is adapting its sales approach to better cater for increasingly sophisticated Chinese customers, according to group managing director Jean-François Palus.
“We’ve changed the way we conduct our business in China and the way we address Chinese clients when they’re abroad,” said Mr Palus at the Financial Times luxury conference in Lisbon on Tuesday.
“We learnt that a very serious risk is to become complacent, to think that it’s an easy business, an easy customer base, easy to open stores with good products and then people will come in. That was true for a moment but Chinese customers have become sophisticated and highly demanding and we need to adapt.”
Chinese consumers account for more than 30 per cent of global luxury consumption, according to consultant Bain, which is forecast to increase to 35 per cent by 2020.
How much of global luxury consumption Chinese consumers account for, according to Bain, a figured set to rise to 35% by 2020
In the past, luxury houses relied on rapidly opening up stores in China to fuel growth amid rampant Asian demand for their products, but this approach has been undermined by an economic slowdown in China.
In the final quarter of last year, Chinese consumers showed signs of returning, although notably shopping more in mainland China, while tourism in Europe has slowed in part owing to recent terrorist attacks.
In China, Kering is retraining shop assistants and replacing email communication with WeChat, China’s most popular social media platform with more than 800m daily users.
Mr Palus said: “The way the Chinese treat very important clients is different — they have a very candid approach to wealth.”
He pointed to a recent visit to a Gucci store in Beijing where the store manager told him he had hired the daughter of a billionaire to work with clients in the shop “because to talk to wealthy people in China, you need to be wealthy”. He added that bad feng shui in a shop can hurt client traffic.
According to Pierre Gervois, the Founder and Publisher of the STC magazine, a luxury travel publication for High Net Worth Chinese global travelers “HNWI Chinese clearly signaled about  five years ago that they wanted to purchase luxury goods outside China, to enjoy the full experience of the iconic flagship stores in London, Paris or New York”
“This new trend has not been immediately recognized by luxury conglomerates such as LVMH and Kering, that led to an inflation of store openings in China in the years 2010/2015, with little customer traffic, insufficient staff training, and in some cases damaging consequences in terms of brand image.”, Mr Gervois added.
Kering posted a 31.2 per cent rise in revenues to €3.57bn in the first three months of 2017, lifted by a 34 per cent jump in sales from luxury activities.
Among its brands, Gucci led the way, posting record revenue growth of 51.4 per cent for the three months — the latest sign of improvement under creative director Alessandro Michele. Other Kering brands such as Brioni and Bottega Veneta were doing less well than the likes of Saint Laurent.
Mr Palus said: “The market has become more difficult and the pace of growth has slowed down. In this environment you need to take market share from the competition.”
Kering was not looking at acquisitions, added Mr Palus. “We have so much on our plate with helping our existing brands tap their potential . . . we don’t have enough time to think about M&A.”
He said that Kering was also still adapting to digital platforms. “We need to open ourselves to what’s happening in other industries and other countries. Our industry needs to become less product-centric and become more customer-centric.”

Chinese tourists have become the highest-spending overseas visitors to the U.S. and valued customers for U.S. shopping centers and travel industries

Minutes after arriving by bus at an outlet mall in Cabazon, a dozen or so Chinese tourists hustled out to buy luggage that they planned to stuff with high-end clothes, shoes and bags.
But not Guoshing Cui, a Samsung supervisor from Guangzhou. He made a beeline for the Coach store, where he picked out three expensive handbags. He paid more than $800 from a wad of $100 bills.
The bags were gifts for family and friends in China, where Coach goods sell for two to three times the price in the U.S. “It’s a smart move,” he said of his purchases.
That kind of power shopping has made the Chinese tourist the highest-spending overseas visitor to the U.S. and one of the most valued customers for U.S. outlet malls, shopping centers and tour bus operators.
Chinese tourists spend an average of $2,932 per visit to California, compared with $1,883 for other overseas visitors, according to the latest statistics by the U.S. Office of Travel and Tourism Industries. A big chunk of their spending — about 33% — goes for gifts and souvenirs.
“What we know about Chinese visitors is they don’t like to lay on the beaches,” said Ernest Wooden Jr., president of the Los Angeles Tourism and Convention Board. “What they do like is shopping.”
The outpouring of Chinese money helped set a record for spending by foreign visitors to the U.S. — $168.1 billion in 2012, according to federal officials. Los Angeles is getting its share of the Chinese spending: Nearly 1 in 3 Chinese travelers to the U.S. makes a stop in the City of Angels.

“The Chinese middle class is growing and their No. 1 destination is L.A.,” said Los Angeles Mayor Antonio Villaraigosa, who has made two trips to China and will be in Beijing this week to promote trade and travel with L.A.

“Our magazine has featured many articles about California in 2013, due to the high demand from our readers, very affluent independent Chinese travelers who carefully plan their trip to the U.S. and don’t trust much the official group tours travel agencies” said Pierre Gervois, Publisher of Luxury Hotels of America, a mandarin-only luxury travel publication about the United States. Pierre Gervois added “There is often this misconception that Chinese travelers are interested only in cheap hotels: It might have been true five years ago, but the new generation of Chinese travelers are perfectly aware of the quality of U.S. hotels and shopping malls. The South Coast Plaza (Orange County), for instance, has perfectly understood how to welcome Chinese shoppers. It’s an example to be followed by the entire luxury retail industry”
China’s relatively strong economy and its growing middle class means more Chinese citizens have money to travel and spend, according to tourism experts. The middle class in China numbered 247 million people in 2011, or 18% of the population, and is projected to grow to more than 600 million by 2020.
Visitors to California from China are typically professionals, executives or managers, with an average annual income of $66,900 — compared with an annual per capita income of about $5,000 for all Chinese residents, according to statistics from the U.S. and Chinese governments.
To draw in more Chinese spending, store owners, hotel managers and tour guides in Southern California are going out of their way to welcome Chinese tourists.
At the Desert Hills Premium Outlets in Cabazon, 20 of the 130 stores employ Mandarin-speaking salesclerks such as Jeffrey Hsu, who works at the mall’s Ugg Australia store.

“I think we understand their customs,” Hsu said. “When someone comes to a foreign country they want to bring back gifts for their family and friends.”
Spending by Chinese travelers has grown so fast in the last few years that it has surpassed the per capita outlays of other high-spending visitors, including travelers from Japan, Australia, Brazil and South Korea.
The customs and unique characteristics of the local economy shape how foreign visitors spend their time and money when visiting the U.S.
Australians, for example, share a similar culture with the U.S. and are more likely than other overseas travelers to visit museums, art galleries and historical sites.
“We are fascinated by peoples of different cultures,” said James McKay, an engineer from Melbourne, whose recent visit to the U.S. included tours of Alcatraz island in San Francisco, the Pearl Harbor memorial in Hawaii and ground zero in New York. He also took a historic tour of Disneyland with his wife, Karen.
Japanese tourists, according to travel surveys, spend heavily at restaurants because certain foods, particularly red meat, are much more expensive in the island nation.
That may explain why Morton’s steakhouse in Beverly Hills has become hugely popular among Japanese tourists.
“Don’t even put fish or chicken in front of them,” Joanna Sanchez, a spokeswoman for the restaurant, said of Japanese visitors. “They come for steak.”
But Chinese tourists tend not to shop for themselves. Most of their purchases — usually high-end clothes and accessories featured in American movies and magazines — are gifts for friends and family.
Chinese tourists in the U.S. target brands such as Coach, Ugg, Polo, Nike, Tommy Hilfiger, Neiman Marcus and L’Occitane. Steep Chinese taxes make such brands two to three times more expensive in China, said Helen Koo, president of America Asia tours in Monterey Park.
“Many tourists feel that the savings more than pay for the entire trip,” she said.

Source: Los Angeles Times / Hugo Martin

Chinese investors turn to US commercial realty

Chinese investors, the second-biggest overseas buyers of US residential real estate, are building up portfolios of US commercial property as they look for new avenues of diversification. Chinese entities announced more than $5.89 billion in projects in January-October, nearly six times the $996 million for all of 2011 and 2012 combined, data from New York-based consultancy Rhodium Group show.
“There is a lot of upside,” said Thilo Hanemann, Rhodium’s research director. “We are at the beginning of a structural increase of Chinese investment in US commercial real estate.”
Greenland Holding Group Co completed a deal that will give the Shanghai-based developer a 70 per cent stake in Forest City Enterprises Inc’s Atlantic Yards, a 22-acre commercial and residential project in Brooklyn, New York. The deal, which is expected to require $4.8 billion worth of investment over eight years, is the largest property transaction by a Chinese company in the US.
China’s push into US property is underpinned by declining investment returns at home, a growing desire by wealthy individuals and developers to diversify their holdings overseas, and property companies looking to capitalize on offshore migration.
“Some investors want to diversify their assets, and some are looking for different growth opportunities,” said Julien Zhang, international director in Beijing for property consultancy Jones Lang Lasalle, which is advising three Chinese conglomerates on property deals. “Others want to learn how to enter mature and developed markets.”
A rebound in US real estate pricing, tight inventory in major cities, and continued low interest rates also are attracting Chinese buyers, said Gary Locke, the US ambassador to China. Locke was speaking at a forum in Beijing sponsored by the US Embassy to promote Chinese investment in US property. Chinese investment in the US has surged to $18.5 billion over the last two years, more than the combined total of the previous 11 years, Locke said.

“Chinese investors are now looking to purchase entire luxury shopping malls in Los Angeles, Las Vegas and New York City”, said Pierre Gervois, Publisher of the Shanghai Travelers’ Club magazine. “As the new generation of affluent Chinese consumers prefer to buy luxury goods overseas, Chinese investors know that it’s now better to invest in luxury retail in the U.S. rather than in China, where foreign brands have opened too many deserted outlets” Gervois added.
Chinese nationals bought more than $8.1 billion worth of real estate in the year ended March 31, representing 12 per cent of the estimated $68.2 billion of domestic property purchased by overseas nationals and second only to Canadians, according to a survey by the National Association of Realtors.
“Real estate is finally becoming a global industry and you will see capital flows on a cross-border basis, just like every other investment class,” said Rob Speyer, co-chief executive of Tishman Speyer Properties LP, which partnered in February with China Vanke Co Ltd to build a $620 million apartment project in San Francisco.
Speyer, whose company is also developing commercial, residential and retail projects in the Chinese cities of Shanghai, Chengdu and Tianjin, said he courted Vanke’s Chairman Wang Shi for more than two years, and inked their deal only 45 days after first introducing the project to him.
Not everyone is convinced that Chinese investment in the US property market will continue uninterrupted. Other options for expansion include Europe, Australia and Singapore, which account for about two-thirds of offshore Chinese real estate investment, according to Jones Lang Lasalle.
Zhang Xin, chief executive of Soho China Ltd, who paid $700 million through her family trust to buy a stake in the General Motors Building in Manhattan, said that while the US regulatory and legal environment remained attractive, valuations were getting expensive. “I would not feel as comfortable today putting in money as I did a few years ago,” Zhang said.

Niuyue Mag, #1 magazine about New York in Chinese language

Niuyue Mag, the publication in Chinese Mandarin about what’s cool in New York is now the #1 travel magazine and social media network in Chinese about the Big Apple. With more than 200,000 Chinese fans after two years of existence, Niuyue Mag has been recognized by Chinese tourists as the leading publication with the most informative and independent content about NYC’s best boutique hotels, feshion designers stores, restaurants, art galleries and real estate opportunities. Available on the iPad (App Store), this urban and stylish magazine is the must read magazine for affluent Chinese tourists in their 20’s and 30’s who don’t want to travel in group tours like their parents did ten years ago. As Pierre Gervois, CEO of China Elite Focus and Niuyue Mag’s Publisher, said “The new generation of free, independent Chinese travelers coming to New York City want to have the same experiences in NYC than the Newyorkers. They don’t even want to visit the Statue of Liberty, but prefer to discover new fashion designers stores in Brooklyn, or contemporary art galleries in SoHo.”  Mr Gervois added “Most of existing travel guides about New York with a content translated in Chinese look pretty boring for this new audience. they want to have the truth about what’s really cool in NYC, and what’s not. The mission of Niuyue Mag is to give them access to this information.”

China’s new national tourism strategy set to increase outbound tourism: a chance for the U.S.

The Chinese government has announced a series of initiatives aimed at increasing travel among its citizens. In a recently released document, the government emphasized the importance of travel as an avenue to enhance both the nation’s economy as well as individuals’ quality of life.“Outlines of the Chinese Citizens’ Travel Initiatives 2013–2020,” released only in Chinese, details plans for improving China’s travel and tourism infrastructure and offering incentives to travel. Among the specific steps the government will take are:

building or expanding airports, highways, hotels and attractions.
increasing the amount of paid leave for workers.
increasing tax deductions for company incentive and conference travel.
allowing schools to expand current travel windows beyond summer and winter breaks.

Through October of last year, the number of Chinese visitors to the United States was up 37 percent from 2011. In light of this surge, the prospect of more Chinese travelers is compelling for tourism professionals.

“This news has extraordinary implications for the North American travel industry,” said Lisa Simon, president of NTA. “China’s U.S. arrivals have increased dramatically since 2008, so the projection of even more visitors confirms what NTA has been saying to its members: Take steps now to capitalize on this wave of tourists.”

The Chinese government is making travel a clear priority, said Haybina Hao, NTA’s director of international development. “Chinese leaders recognize that travel expands the horizons of its citizens, and when people see more of the world, they can return to China inspired and better prepared to be creative entrepreneurs,” Hao said.

“The NTA has done a remarkable work with Chinese travel agents to help them to better understand the U.S. destinations.” said Pierre Gervois, CEO of China Elite Focus, who publishes magazines in Chinese language for affluent Chinese travelers to the United States such as Luxury Hotels of America or VIP Golf USA.  Pierre Gervois added “Don’t forget that the most affluent segment of Chinese travelers to the U.S. don’t rely on their travel agents to build their leisure trip to the U.S., but more on influential luxury travel publications and recommendations of VIP travel clubs. It’s important for U.S. destinations and hotels to talk directly to their future Chinese guests through these selected channels”

The plan calls for a 10 percent increase in domestic and international travel during 2013. It also emphasizes sustainable tourism.

Hao predicts an upsurge in many types of outbound travelers to the United States. “We’ll see student groups coming not just for summer camps or winter holidays but during the regular school year,” she said. “We’ll also see more travelers coming to attend business conventions and study tours, as well as more families and seniors groups.”

NTA has been heavily involved in the China outbound market since 2008, when the governments of the United States and China signed a memorandum of understanding allowing Chinese leisure travelers to visit the United States in group tours. NTA launched its China Inbound Program that year and has since maintained a list of U.S. tour operators registered to handle inbound Chinese group travelers. And next month, Hao will be in Beijing for the China Outbound Travel & Tourism Market, where NTA is partnering with Brand USA to present the USA Pavilion.

China’s latest plan to further increase travel is a call to action, said Hao. “These initiatives will change China and will reshape our industry if we can grab the opportunity,” she said. “Chinese travel agencies are working now to identify more products and American partners, so this is a perfect time to attend COTTM to present the Chinese trade what the U.S. has to offer.”

This summer, NTA will conduct the second China Market Forum during Contact, the association’s tour operator event, which will be held on Hawai‘i, the Big Island, Aug. 15–17. NTA and Hao also provide customized workshops and strategy sessions for destination marketing organizations and tourism professionals interested in exploring the Chinese market.

Big success for U.S. destinations at Luxury Travel Awards 2013, organized by the Shanghai Travelers’ Club

The Shanghai Travelers‘ Club has the pleasure to announce the results of the Luxury Travel Awards 2013. The results come after a vote by the 3,400 Chinese members of the Shanghai Travelers‘ Club, who distinguished the very best luxury hotels, travel agencies, destinations and luxury lifestyle experiences all over the World according to the taste of affluent Chinese outbound travelers.
Awards have been presented in three categories: World’s Best Luxury Travel Experiences, Asia-Pacific Best Luxury Travel Experiences and USA Best Luxury Travel Experiences.

New Zealand has been awarded the most coveted title of “ World’s Best Luxury Destination 2013”, as well as three other New Zealand winners: Auckland Airport (World’s Best Airport), Whare Kea Lodge (Best Asia-Pacific Boutique Hotel), and Millbrooks Golf resort (Best Asia-Pacific Golf Course).

The U.S. is also a very popular luxury travel destination for affluent Chinese tourists, who distinguished great luxury shopping experiences (South Coast Plaza, Best USA Luxury Shopping Mall), historical hotels (Waldorf-Astoria, Best USA hotel), luxury lifestyle exeriences (Crowds on Demand, World’s Best Luxury Lifestyle Experience), or travel agencies (Luxe Travel Hawaii, Best USA Luxury Travel Agency), to quote a few.

The Trump National Golf, D.C., won the “Best USA Golf course” Award, and the NoMad hotel (NYC) won the “Best USA hotel” Award.

As said Pierre Gervois, CEO of China Elite Focus Magazines LLC and President of the Shanghai Travelers‘ Club: “The new generation of affluent Chinese outbound travelers have demonstrated in their vote that they are now very mature and experienced World travelers, far from the clichés of the “Group tours”.”

Mr Gervois added: “It’s time for the luxury travel industry in Europe and in the United States to realize that their future Chinese guests are now no more looking for discounted trips, but expect a high quality of service in the very best hotels and luxury retailers. They enjoy travelling independently, making their own itineraries, and trying more sophisticated luxury lifestyle experiences.”

In the first half of 2012, +46% of visa applications processed at U.S. Embassy for Chinese leisure travelers

President Barack Obama’s initiative to boost international tourism has pushed the US government to process a record 1 million visa applications from China so far during fiscal 2012.
“This extraordinary accomplishment represents visa processing growth of almost 43 percent over the same period last fiscal year, when we had processed just over 675,000 visa applications in China,” the State Department announced Thursday.
The US federal government’s fiscal year begins Oct 1 and ends Sept 30, so the department was referring to visa-processing totals through the end of the third quarter on June 30. As China Daily reported in April, through the first half of fiscal 2012, the State Department had processed 453,000 visa applications from Chinese citizens, up 46 percent from the first six months of fiscal 2011.
To reach the 1 million figure through the current fiscal year’s first nine months, department staff at the US Embassy in Beijing and the four consulates across China processed at least 547,000 visa applications from Chinese citizens in the three months from April 1 through June 30 – reflecting especially high demand for the busy summer travel season.
The State Department credited the opening of more windows for interviews, expansion of consular office space and better-maintained waiting areas for visa processing at the Beijing embassy and its consulates in Chengdu, Guangzhou, Shanghai and Shenyang. Furthermore, it said the average waiting time for a visa interview has been reduced to about a week from the several months it used to take to get an appointment.
According to Pierre Gervois, CEO of China Elite Focus and the author of the Book How U.S. Retail, Travel and Hospitality Industries Can Attract Affluent Chinese Tourists “This initiative is the direct result of a very successful lobbying campaign organized by the retail, travel, and hospitality industries that were the first-hand witnesses of the incredible purchasing power of Chinese tourists in the last few years. Roger Dow (president of the United States Travel Association) and Joe McInerney (president of the American Hotel & Lodging Association) have done a fantastic job of explaining to Washington the vital necessity to the American economy of finding ways to increase the number of Chinese leisure visitors.”
Dong Xue, a senior at Purdue University in Indiana, has just returned from China and it took her only a week to get a visa, even at the peak of summer. As a repeat traveler to the US, Dong was able to use a bank drop-off service to renew her visa. Without having to go for a personal interview, she submitted her paperwork through the bank and got her visa in five business days.
“As the Chengdu consulate (nearest to her hometown of Chongqing) was very busy then, their colleagues in Guangzhou processed my application,” Dong told China Daily. “It’s so fast. Usually it will take two weeks.”

The Obama administration, pointing out the value of travel and tourism to the US economy, introduced in January a strategy to make the United States the top destination for foreign visitors. More than 1 million jobs could be created over the next decade if the US increases its share of the international travel market, Obama has said.
In 2011, about 1.18 million Chinese visited the United States and the number is expected to reach 2 million in 2015, according to the National Tourism Administration of China.

Niuyue Cap on the head, Shanghai Travelers’ Club “Platinum” Card in hand, Wealthy Chinese tourists arrive in New York City

At the 5th avenue Cartier Flagship store, a Chinese customer in Gucci flip flops, Abercrombie & Fitch T-shirt and a Niuyue Mag Cap on his head is buying three gold “Tank” watches incrusted with diamonds “One for me, one for my wife, and one for my daughter, who is studying in Chicago”, he says with a big smile. “I’m also platinum member of the Shanghai Travelers’ Club”, he added ,“that gives me a VIP welcome in most of luxury stores here”.
Cultural training is imperative for New York-based luxury flagship store employees to build trust among affluent Chinese tourists and creating a custom experience for this group of travelers will help marketers gain brand loyalists, experts say.
Many luxury brands are focusing marketing efforts to Chinese consumers back at home, but with a rising wave of Chinese tourists coming to New York, it is important that brands cater to this group. Luxury marketers need to be more proactive to reach Chinese travelers by training employees and partnering with high-end travel services.
“New York flagships should be more aggressive in inviting and giving a fabulous experience to Chinese tourists,” said Milton Pedraza, CEO of the Luxury Institute, New York. “The city seems to be behind in attracting and nurturing Chinese consumers.
“New York has been slow to appeal to Chinese tourists, even though there is such as large Chinese population in the city,” he said.
“Retailers need to create personal, emotional connections with these consumers by nurturing them and caring for them, which will create a lasting impression.”
In the capital cities of European countries, luxury flagship stores get 50 percent of their value from Chinese tourists, per Mr. Pedraza.
Europeans have been smart in the way they care for Chinese tourists, who tend to buy in volume on shopping trips.
Meanwhile, the United States has not been as open to tourists in its efforts and may have suffered, given the economic times.

According to Pierre Gervois, author of “How U.S. Retail, Travel and Hospitality Industries Can Attract Affluent Chinese Tourists”, “The U.S. travel and tourism industry has understood the financial power of the new generation of affluent Chinese inbound tourists, and how it can give a boost to the country’s economy, but needs to improve the way Chinese visitors are welcomed and understand better the intercultural issues of marketing”
In the past, European tourists were key for New York-based retailers, but tourism from Europe is on the decline. Travelers from China are now the largest group of tourists in New York, and Indian tourists are another group to look out for in the next decade.
To get Chinese consumers into New York flagship stores, luxury brands should partner with high-end hotels, tour operators and restaurants to keep the brand top-of-mind, according to Mr. Pedraza.
But the marketing strategy for luxury retailers also starts in China, when affluent Chinese travelers are planning their NYC shopping trip, and use Chinese social media networks such as Niuyue Mag, with 200,000 registered members, giving shopping tips and specific insights to Chinese shoppers.
Also airports, limos and hotel concierges play a major role in influencing affluent Chinese tourists since these are all stops on the journey to New York.

“There is no question that luxury brands should be using print and their Web sites to attract tourists to their New York stores by showing the experience that they can expect,” Mr. Pedraza said.
“The travel industry is also a huge opportunity,” he said. “Luxury brands have to romance travel agents to get on the map within the travel industry.”
“Brands need to do a better job at creating these partnerships with travel-oriented brands.”Once in-store, affluent Chinese tourists will need to be made comfortable. To do so, New York flagship stores should start by training their staff on the Chinese culture and traditions.
Stores should have, at minimum, Mandarin-speaking employees and may also want to train in other dialects from Asia.
“Employees should be well-educated in relationship building, not just to process tourist transactions, but to develop longtime relationships with the brand,” Mr. Pedraza said.
“There are luxury brand stores in Shanghai, Beijing and Hong Kong, so these tourist transactions are not a one-shot deal,” he said. “They can also be relationship building.”
Luxury retailers should be aware of the Chinese holiday calendar to understand buying habits during certain holidays and target Chinese consumers for in-store gift buying, per Ken Morris, principal at Boston Retail Partners, Boston.
The holiday calendar may also hint at the time when Chinese tourists are more likely to travel.

Training sales associates on cultural greetings can quickly build trust with incoming tourists and encourage foot traffic.
Stores should also offer in-store shipping options so that Chinese consumers can ship items home. This will eliminate the need to pay sales tax and leave the customer more room in their luggage, per Mr. Morris.
“Not only is the size of the luxury market in China significant, but it continues to grow with a burgeoning middle class aspiring to own luxury brands to demonstrate their wealth,” Mr. Morris said.
“New York is a unique, international city where tourists can readily find bilingual associates,” he said. “By focusing on hiring multilingual staff, a retailer has the opportunity to offer exceptional customer service and make the customer comfortable shopping in the store.”

From complimentary Chinese tea to social media marketing, U.S. hotels try hard to entice more Chinese guests

Major hotel brands are bending over backward to cater to the needs of the world’s most sought-after traveler: the Chinese tourist.Now arriving on American shores in unprecedented numbers thanks to a streamlined visa process and a rising Chinese middle class, Chinese tourists are being treated to the comforts of home when they check in at the front desk. That means tea in rooms, congee for breakfast and Mandarin-speaking hotel employees.Chinese “welcome programs” at chains like the Marriott and Hilton even address delicate cultural differences: No Chinese tour group should be placed on a floor containing the number four, which sounds like the word for death in Mandarin.“They’re very relieved, like finally somebody’s doing these things that make sense,” said Robert Armstrong, a sales manager who handles bookings for Chinese travelers at the Waldorf-Astoria in New York.More than a million Chinese visited the US in 2011, contributing more than US$5.7 billion ($7.2 billion) to the economy. That’s up 36 per cent from 2010, according to the Department of Commerce. By 2016, that figure is expected to reach 2.6 million Chinese.
In a striking departure from the traditional Chinese business traveler, a growing number of them are coming to America for fun – with lots of cash. (The average Chinese visitor spends more than US$6000 per trip.) “Chinese Social Media networks are very important to help Chinese travelers to choose their hotel in the U.S.” said Pierre Gervois, Chief Executive Officer of China Elite Focus, a digital marketing agency based in Shanghai and Hong Kong. “New social media networks focused about travel in the United States have emerged last year, and are now very popular, such as Luxury Hotels of America (美国奢侈酒店), or Niuyue Mag (纽约志), and VIP Golf USA (美国VIP贵宾高尔夫). These social media networks allow Chinese travelers to ask for advice to other Chinese tourists coming back from the U.S., and also to rate hotels, golf courses, and retail stores. They are much more influent than travel agencies.”And so hotels are competing to win the hearts of the Chinese. That may take the form of slippers and a tea kettle in the room or a Mandarin-speaking employee at the front desk.“They drink tea. Eastern style, everything cold,” explained Charlie Shao, president of Galaxy Tours, a New York City-based Chinese tour agency. “They don’t walk inside the room with bare feet.”It’s rare that Shao has to ask hotels for anything anymore. Marriott International, for example, now offers several Chinese breakfasts, depending upon which region of China the traveler hails from: there are salted duck eggs and pickled vegetables for eastern Chinese, for example, and dim sum and sliced pig’s liver for the southerners.Major chains are also training employees to avoid cultural missteps that would offend a Chinese visitor. Superstition is a big one: Red is considered a lucky colour, along with the number eight, which signifies wealth. The colour white, meanwhile, is frowned upon.Failing to respect the pecking order in a Chinese group is another common blunder.“We try to make sure nobody’s on a higher floor than their boss,” Armstrong said. “Even if the boss is on a beautiful suite on the eighth floor, if the assistant is in a standard room on the 38th floor, it doesn’t translate.”The race is also on to build loyalty within China’s borders. Last year, Starwood Hotels, which has a Chinese “specialist” at each American hotel, relocated its senior leadership team to China for a month. The Ritz-Carlton rotates general managers and other hotel staff into its Chinese hotels for three-year stints at a time. And both chains are banking on the success of their customer rewards programs, which have been a big hit in China.“It’s important for our leaders to understand what’s going on there at a more personal level than just the statistics,” said Clayton Ruebensaal, vice president of marketing for the Ritz. “Everybody’s going after this market because of the sheer volume of luxury customers. At the same time, it’s a very crowded landscape.
”In response to the surge in Chinese visitors, the State Department decided earlier this year to spend US$22 million on new facilities in several Chinese cities and add about 50 officers to process visa applications. And in February, the US government said Chinese visitors who had obtained an American visa within the last four years did not have to reapply in person but could apply via courier.As a result, visa interview wait times in China are just under a week. But some experts say the US still lags far behind other countries, especially in Europe, when it comes to attracting Chinese tourists. America is woefully ill-prepared to welcome China at an industry-wide level, especially at restaurants and major attractions, said Rich Harrill, director of the Sloan Foundation Travel & Tourism Industry Centre at the University of South Carolina.“We’re not as ready as we should be,” Harrill said.“We don’t have the language skills. We have an opportunity to be on the ground floor of something that could be very, very big.”

The new generation of Chinese tourists in Hawaii

Somewhere between Chen’s Gourmet Buffet and the statue of King Kamehameha, Wayne Lu lost half his audience.Lu is a tour guide for a Honolulu travel company called Dragon Tours & Travel, and his audience is a group of 30 vacationers from mainland China on the first day of a whirlwind, 12-day, eight-city tour of the United States.
He met them in the morning at the airport, whisked them off to see the Arizona Memorial, then brought them to lunch at Chen’s, an all-you-can-eat Chinese buffet along Nimitz Highway. There, he made a prediction: “Fifty percent will fall asleep after lunch.”
After a 15-hour trip to Honolulu from Shanghai, via Tokyo, the group was beat. By the time its motor coach stopped across from Iolani Palace, beside the Kamehameha statue, Lu’s prediction had come true. Despite his amiable, nonstop patter, at least half the bus had nodded off.“They always fall asleep after lunch,” Lu said again, after his bleary-eyed charges descended from the motor coach to take photos beneath Kamehameha’s outstretched arm.Meet the weary pioneers of Chinese leisure travel, forerunners of a rapidly building new wave of wealthy and middle-class visitors from the People’s Republic of China. Increasingly, you can find them piling out of buses at the usual tourist attractions, or forking out huge sums for designer handbags and watches at luxury shops in Ala Moana and Waikiki, or learning the hard way that haggling at the Apple Store will get you nowhere.
Although they make up a tiny fraction of the 7.2 million visitors overall that Hawaii  saw last year, their numbers are growing quickly—from 28,664 in 2001 to 79,531 in 2011. Just as China’s economy surpassed Japan’s as the world’s second-largest in 2010, so, too, could the number of Chinese tourists in Hawaii  someday surpass the number of Japanese tourists.“One day, in my opinion, it will happen,” says Sadie Goo, China market brand manager for the Hawaii  Tourism Authority. “Given that China’s population is 1.4 billion, and they have so many wealthy people and so much disposable income, they will eventually be the No. 1 outbound source market in the world.”To make the acquaintance of these fledgling travelers with the potential to transform the face of Hawaii’s visitor industry, HONOLULU Magazine shadowed Lu and his 30 travelers on their two-day tour of Oahu.Fewer than 15 percent of Hawaii’s Chinese tourists come to Hawaii as independent travelers, booking their own trips, following their own schedules, renting cars and confounding local drivers unfamiliar with China’s first-is-right rule of the road. The majority of Chinese tourists in Hawaii today come with group tours, often part of steeply discounted, multi-city packages that jam as much Hawaii into as little time as possible.

Such was the case for Lu’s people, who Dragon Tours, agent for the Hawaii leg of their trip, would host for their two days on Oahu. After that they were off to Los Angeles, San Diego, Las Vegas, Buffalo (with a side trip to Toronto, for those with Canadian visas), New York, Washington, D.C., and, finally, San Francisco. Honolulu was just the first dot on the map.
Escorting them from Shanghai across America and back was the trip leader, Zeng Wei Ji, a boyish 45-year-old who introduces himself to Westerners as “Ricky.” Ricky studied to be an industrial engineer, but, 20 years ago, he got an opportunity with a Hong Kong-based travel company to lead a tour to the United States. He’s been an international trip leader ever since. Originally, his company catered to groups from Hong Kong and Macau, but, in the last few years, it’s expanded to mainland China. Now that’s where almost all his tour groups come from.

The competition among travel agencies for these outbound Chinese travelers is highly competitive. If one company offers an all-inclusive, nine-city, 12-day trip across America for the ultra-rock-bottom low price of, say, $2,000 (as Ricky’s company does), another company will offer the same thing for $1,950. Then another will come along and offer the same deal for $1,900. “It’s a hard business,” Ricky explained. “Everybody undercuts everybody.”For China’s fledgling world travelers, the smart choice is widely regarded as the package that offers the greatest number of foreign cities for the least amount of money. “They think  that is the best deal,” Ricky said. “But they will spend most of their time sitting on buses.”Tourists from mainland China are not hard to spot, at least to Lu’s seasoned tour-guide eyes. “They don’t dress like the Japanese or the Koreans,” Lu said while waiting at the airport that morning for his group to emerge from customs. Even their suitcases look different, he said: “Their luggage is always more beat up. It looks like it’s had lots of rough handling.”In contrast to the fashionably dressed mass of Japanese tourists outside the airport’s international terminal, Wu’s 30 travelers, once he’s rounded them up, looked perfectly unassuming in their simple plaids and stripes, denim jeans, starter jackets and sequined sweaters. A few wore bulging fanny packs, and all appeared to wear off-brand, no-nonsense shoes. One otherwise matronly woman wore a T-shirt adorned with a bejeweled heart and the words “Good Love First Time.”China’s growing ranks of millionaires and billionaires aren’t the ones blasting through Hawaii on tours like these. Among Lu’s group there was an accountant, several retirees and a cagey man who claimed to be a bus driver, then said he was a clerk, but, frankly, had the air of a low-ranking Communist Party official. There were also two young women who worked for different travel agencies. They were each traveling alone, on vacation, and had just met, but were clearly destined to be great friends. To keep accommodation costs down, Ricky had paired them as roommates for the duration.

For decades, the Chinese could travel to the United States only on business, as students or to visit family. The door opened to tourism for the sake of tourism in 2008, after the U.S. pledged to speed up the glacial pace of its visa processing, and China, in turn, granted the U.S. “approved destination status,” allowing Chinese visitors to come here for no better reason than to sightsee and shop. From 2008 to 2011 the number of Chinese visiting Hawaii climbed by more than 25,000.
Last August, China Eastern Airlines launched the first direct, regular air service from China to Hawaii, with 287-passenger flights arriving from Shanghai every Tuesday and Thursday. These are expected to push Chinese visitor numbers for 2012 above the 100,000 mark.While the Japanese are still way out ahead, with 1.3 million travelers expected this year, the Chinese stats come with a footnote that has the visitor industry abuzz: the Chinese spend more. Way more. Last year that amounted to $382 per person per day—nearly $100 more than the Japanese, who have have traditionally been Hawaii’s biggest spenders.Much of this spending is on luxury goods at high-end shops like Chanel, Tiffany & Co. and Gucci, brands which are available in China, but always with heavy tariffs and the spectre of the counterfeiter. “You can buy what looks like a Gucci bag in China,” says Frank Haas, dean of the hospitality, business and legal-education program at Kapiolani Community College, “and never really be sure it’s authentic.”Hawaii’s tourism machine has been gearing up for this lucrative new market for some time now.Delegations of high-ranking state officials frequently trek to China to promote tourism and trade. The Hawaii Tourism Authority has opened offices in Beijing and Shanghai, and launched a Chinese-language version of its website. The Bank of Hawaii has made arrangements with China’s largest issuer of bank cards, permitting electronic transactions with thousands of merchants throughout the Islands. Shops from Luxury Row in Waikiki to the factory outlets in Waikele have been staffing up with sales people fluent in Mandarin.
Nobody, however, has rolled out the red carpet quite like Starwood Hotels & Resorts, whose Hawaii hotels include The Royal Hawaiian, the Moana Surfrider and the Sheraton Waikiki. Mandarin speakers greet Chinese visitors at the front desk when they check in and check out, and are on hand around the clock to troubleshoot. There are amenities in the rooms to which the Chinese are accustomed, such as tea pots, green tea, slippers and fresh toothbrushes. There’s Chinese programming on the TVs and Mandarin translations of most hotel literature, including menus, which feature dumplings and congee (rice porridge) for breakfast. There’s a general awareness of Chinese cultural indiosyncracies, such as the association of the number four with death. A Canadian traveler probably wouldn’t think twice about Room 444, but a Chinese traveler might sleep better elsewhere.

Using the curriculum Starwood developed, more than 2,000 hospitality workers throughout the visitor industry have gone through crash courses in Chinese cultural fundamentals at Kapiolani Community College, learning that “nihao” means hello and that one should not be taken aback if the Chinese, not the world’s greatest huggers, seem a little stiff during the Hawaiian lei greeting.

While Hawaii is figuring out how to make the Chinese feel at home, the Chinese are figuring out how to travel abroad gracefully.

There are some high cross-cultural hurdles to clear. Take tipping, for instance, which isn’t something they are accustomed to doing, or haggling, which isn’t something they are accustomed to suppressing. “Bargaining and haggling are the Chinese tradition,” says Ted Sturdivant, president of the Hawaii Chinese Tour Association and publisher of a guidebook to Hawaii for the Chinese. “In fact, it’s fun for them.” Tour companies don’t typically warn Chinese visitors that U.S. retail prices aren’t negotiable, according to one visitor-industry insider, because they don’t want to deflate their morale.

Then there’s the delicate matter of bad manners. Complaints about the bad behavior of early waves of Chinese leisure travelers abroad so alarmed the state-run China Daily that it declared the culprits had “damaged the image of China as a civilized country.” The China National Tourism Administration, along with the Office of Spiritual Civilization Development Steering Commission, followed up with a list of dos and don’ts for international travelers, including: don’t spit, don’t litter, don’t talk loudly, don’t cut in line and do observe the “ladies first” rule.

Lu’s group wasn’t ill-behaved, so perhaps the outbound Chinese are absorbing the government’s etiquette tips. Or maybe everybody was just too tired to get into any trouble. In any case, after 12 minutes at Kamehameha’s statue, the group got back on the motor coach and headed for The Waikiki Sand Villa, an aging budget hotel located across the street from the Ala Wai Canal. It is not a Starwood property. There are no Mandarin speakers at the front desk, and breakfast consists of toast, juice and coffee. But the signs warning pedestrians to stay off the automobile ramp have been translated into Mandarin.

Ricky handled the check-in and Lu announced he would meet everybody back in the lobby in three hours so they could walk together to the Chinese buffet at Hokele Restaurant for dinner. He would also show them how to get to the DFS Galleria, where foreign travelers can shop duty free.It was important that everyone could find their way back to the duty-free shops after dinner. There’s no profit margin for Dragon Tours in selling cut-rate packages like these, which are known in the industry as “zero-dollar tours.” Instead, the money is in the commissions Dragon gets for selling add-ons, like submarine rides and sunset cruises, and for bringing business to restaurants and retailers, like the shops at DFS Galleria.

Lu’s group was on the move again the next morning, seeing Waikiki Beach, the Diamond Head lookout, and luxurious Kahala homes through the motor coach’s darkly tinted windows. A few brand-new iPads, purchased the night before, came out to record the sights. After a 20-minute stop at Haunauma Bay, and another 20-minute stop at the Blow Hole, the motor coach barreled back into town and rolled to a stop on unglamorous Young Street, in front of a jewelry store called Keoni.During the drive, Lu put in a few good words for black coral, red coral and black pearls, all of which are prominently featured in the Keoni collection. The group dutifully filed into the display room, where elegant young women stood behind glass counters, ready to deal. Johnnie Fong, Keoni’s owner, greeted Lu warmly and slipped him a crisp $20 bill for his trouble, then slipped the bus driver a $10.Fong said he moved Keoni from Waikiki to Young Street specifically to accommodate bus tours like these. While this particular group didn’t show much interest in his jewelry, “it just takes one good customer,” as Fong put it, to make the whole thing worthwhile. When the group boarded the motor coach, 20 minutes later, only one piece of the Keoni collection went with it, a relatively inexpensive olivine stone.As the motor coach headed back for Waikiki, Lu put in some good words for the healthful benefits of Hawaiian noni and an antioxidant product from the Big Island called BioAstin. Both of these could be found at the group’s next stop, AMW Wholesale, a vitamin and souvenir shop hidden away on the second floor of the Waikiki Trade Center. Lu’s shoppers were far more enthusiastic about this place than the jewelry store, and as they followed him to their next stop, lunch at China Garden Restaurant, they carried bags full of mac nuts, Hawaiian chocolate, BioAstin and noni in its capsule, tablet, soap, gel and body lotion forms.After lunch Lu, turned the group loose in Waikiki for more shopping. He returned later that afternoon to take the 16 who had signed up for the sunset cruise to Pier 8, where they would board the Star of Honolulu. “Sixteen’s pretty good,” he said. “Not great, but pretty good.” The next morning, he would pick everyone up at 4 a.m. and take them back to the airport for their early morning flight to LAX and the beginning of the rest of their grand American tour.“They will spend a lot of time on the bus,” Ricky said before taking back the reigns of the tour from Lu. “When they get home, they will show their family and their friends the pictures, and they can tell everybody that they have seen the United States.”

Will Chinese tourists save the American economy?

With easing travel restrictions and growing spending power, American politicians and businesspeople look to the increasing number of Chinese travelers to speed economic recovery.
Amid the commotion of shuffling lines and muffled voices, Tina Tian sits in disbelief outside the U.S. Embassy in Beijing. Her head hung low, Tian’s phone rings. She answers her father’s call with a sigh of resignation.   Five years later, Tian still remembers the disappointment of being denied an entry visa to visit the United States.
“I want to visit America because it is a superpower,” Tian says, now a recent college graduate from Sichuan University. Despite being denied a visa twice, Tian remains determined. “I am a big Lakers fan, I watch Gossip Girls and love to drink Starbucks. My daily life is very influenced by the United States and that is why I want to visit.”
Though Tian has yet to make the trip, Chinese travelers are landing at U.S. airports in record numbers. In 2011, over one million travelers from the Mainland arrived in the U.S., with hundreds of thousands more pouring in from Taiwan and Hong Kong. With expanding incomes and an eagerness to venture abroad, American politicians and businesses are lining up to greet Chinese tourists at the gates.
Speaking at Disney World in February, President Obama announced his vision to expand international tourism as a means to economic recovery.

“Every year, tens of millions of tourists from all over the world come and visit America,” Obama said. “And the more folks who visit America, the more Americans we get back to work.” With the Department of Commerce estimating that Chinese and Brazilian travelers spend an average of $6,000 per visit, ensuring the U.S. is a top travel destination is more national priority than marketing material.
For Tian, that means the third time may be a charm. Obama’s plan included several steps for increasing access to the U.S., including simplifying and accelerating non-immigrant visa processes, making the Global Entry Program permanent and nominating Taiwan to the Visa Waiver Program. The bottom line for the President’s push?
“We need to help businesses all across the country grow and create jobs; compete and win.”
The U.S. Department of Commerce estimates that arrivals from China will increase by approximately 274% between 2012 and 2016. Last year, arrivals from China were estimated at 1,098,000 and 294,000 from Taiwan. If Taiwan is accepted into the visa waiver program, numbers are expected to rise even more as citizens would be eligible to travel to U.S. territories for 90 days without a visa.
With that number expected to top 3 million visitors from China by 2016, American businesses are preparing for their arrival in a big way.
“The number one reason Chinese tourists come to the U.S. is for shopping,” says Pierre Gervois, President and CEO of China Elite Focus, an agency specializing in wealthy Chinese outbound tourism.
This statement holds true as Chinese travelers spent $7.2 billion abroad on luxury goods, a 29% increase from the $5.6 billion last year just during the weeklong Spring Festival holiday.

“The second reason,” Gervois continues, “is that the U.S. is well known for their movie stars and Hollywood scenes and they want to do a lot of sight seeing.”
Carol Martinez, spokesperson from the Los Angeles Convention and Visitor Authority, concurs as she says that significant focus is put on accommodating outbound Chinese tourists through measures like setting up Chinese boarding services at major attraction sites. Martinez highlights that the California Travel and Tourism Commission opened tourism promotion offices in Shanghai and Beijing.
Another compelling reason: travel to the U.S. can act as a social status marker for Chinese and Taiwanese.
“If you can afford to visit and purchase many goods from the U.S., it makes a statement that you are living a good life,” says Nancy Cheng, a Taiwan native.
In 2003, the U.S. opened the Group Visa Program for Chinese travelers, making it far easier for large tour groups, athletic teams, and entertainment groups to enter the country. The most important trend, however, is that visitors from China are beginning to travel independently. Cheng notes this phenomenon as, “a perfect example of xuan fu, which means to show off your wealth.”
“The second wave of China’s outbound tourism has started, with more self-organized travelers slowing down and spreading further afield,” says Dr. Georg Wolfgang, Director of the China Outbound Tourism Research Institute. “Increasingly travel-savvy and globally connected, below 45 years and green, the new Chinese tourist is arriving in exotic locations and staying for more than just a snapshot.”
These “new” Chinese tourists are setting a new standard for Chinese outbound tourism and are eager to explore forms of non-traditional tourism.
Ecotourism, increasingly popular with Western tourists, is also catching on with Chinese. The emphasis of nature immersion and outdoor adventures in locations such as Hawaii and Alaska is becoming more appealing as some Chinese look to escape from the hardships of modern urban living.
Mike McCartney, president of the Hawaii Tourism Authority (HTA), forecasts that the number of Chinese visitors to Hawaii will increase annually by 20% from 2012 to 2014, with those who visit consisting largely of young affluent individuals. For this reason, outdoors activities such as golfing, boating, yachting and surfing are being promoted and emphasized in their marketing efforts.
“Mass tourists will stay on the beaten track, but new Chinese tourists can be attracted to lesser known places if they are provided with a good reason to go there which translates again into prestige,” Wolfgang says. “Connecting destinations with the history of overseas Chinese living in that area might also be a good starting point.”

The exponential rise in Chinese tourists has also positively affected the EB-5 and the proposed EB-6 Visa programs. Intended to attract foreign investors, the EB-5 visa program provides foreign nationals a way to gain a green card for a minimum of $500,000 investment for a targeted employment area within the U.S. The program has created 31,000 jobs and has attracted over $1.5 billion in investments through mainly private companies since its inception. With a surge of Chinese tourists in the U.S., hopes are that the number of applicants for the EB-5 and EB-6 programs will also increase.

While statistics rise for conventional tourist arrivals, there has been a parallel spike in other “grey” forms of travel.  “Birth tourism,” as it has been labeled, sees wealthy pregnant women travel to birth their babies in foreign countries. Potentially living in the country for months before delivery, babies birthed in the U.S. provide two benefits as seen by these Chinese parents: instant U.S. citizenship and a way around China’s pesky one-child policy.
China has already overtaken Italy, Japan, France and the United Kingdom in terms of international tourist spending. In 2010, the average travel spending per Chinese visitor to the U.S. was at $6,243 followed by India at $6,131 and Brazil at $4,940, while European countries peaked at $3,132. The flood of Chinese outbound tourists offers an obvious potential cash flow. With President Obama acknowledging the need to facilitate travel, the U.S. can anticipate more Chinese tourists in more places across the country.
“The primary motivation to travel to the U.S., besides business and visiting friends and relatives, is to gain prestige and to learn,” Wolfgang notes. “To attract Chinese visitors, these two aspects have to be emphasized, ‘Be the most famous, oldest, greatest in your field and provide a mix of entertainment and education.’”
It should only be a matter of time before Tian is sipping Starbucks at her first Lakers game.

Article by Chia-Ling Melody Yuan

President Obama’s travel initiative will increase the number of affluent Chinese tourists spending money in the U.S

Acknowledging the prominent role of the travel and tourism sector in creating jobs and powering the economy, President Obama announced that he has issued an Executive Order aimed at boosting travel and tourism during an event in Orlando, Fla.

The President announced an initiative focusing on improving travel facilitation by coordinating activity among the Department of Commerce, Department of State, and Department of Homeland Security. To achieve this, the President has directed the Department of Commerce to create a task force to develop a “National Travel & Tourism Strategy.” The task force will coordinate cross-departmental efforts and ensure private sector participation.

To increase international tourism to the United States, President Obama recommends promoting unique U.S. destinations/experiences, reducing wait times for visas in rapid-growth countries such as China and Brazil, and making the U.S. Global Entry program permanent.

In remarks, the President stated, “Every year, tens of millions of tourists from all over the world come and visit America. And the more folks who visit America, the more Americans we get back to work. We need to help businesses all across the country grow and create jobs; compete and win. That’s how we’re going to rebuild an economy where hard work pays off, where responsibility is rewarded, and where anyone can make it if they try.”

“I was honored to stand with the President in Orlando as he announced that travel and tourism will be a national priority,” said AH&LA President/CEO Joe McInerney. “Travel and tourism is among the nation’s largest employers and a top ten industry in 48 states – so this effort will benefit every community. By focusing on these high-growth sectors, the United States is poised to create jobs and strengthen the economy.”

Many of the priorities highlighted by the President today are shared by the AH&LA co-chaired Discover America Partnership (DAP). DAP is a lobbying and grassroots campaign working to advance visa and entry reforms in order to regain the share of the international traveler market the United States held in 2000. By recapturing America’s historic share of international travel, the U.S. could create up to 1.3 million new U.S. jobs by 2020 and produce $859 billion in cumulative additional economic output.

“While working with the Travel and Tourism Advisory Board (TTAB), we reported that tourism is a low-cost/high-reward prospect and one of the few industries showing positive growth,” said Nancy Johnson, AH&LA chair and executive vice president, development, Carlson Hotels, America. “Promoting travel produces a multiplier effect that benefits all industries and TTAB estimates we could add 500,000 new U.S. jobs by 2015 with no cost to tax payers. We commend the President for taking this positive step forward.”

“President Obama’s travel initiative will certainly help the U.S. hospitality industry to acquire more affluent Chinese travelers and create more jobs in luxury retail, golf industry, and shopping centers”, said Pierre Gervois, CEO of China Elite Focus, member of the Manhattan Chamber of Commerce. “In cities like New York City, hotels and retailers are now taking initiatives to attract the wealthy segment of Chinese customers, even before they arrive in the country, when they are still in China, planning their shopping trip to the U.S.”

Promoting travel and tourism remains one of AH&LA’s highest priorities. AH&LA and the Discover America Partnership will continue to work closely with Members of Congress, the Administration, and governmental agencies to highlight the incredible opportunity presented by bringing more international travelers to United States.

U.S. Travel Association applauds Congress for U.S. Visa System and traveler facilitation reforms for Chinese tourists

The U.S. Travel industry worked with Congressional appropriators to secure significant victories related to U.S. visa system and traveler facilitation reforms in the Consolidated Appropriations Act of 2012. The legislation reflects 2011 advocacy efforts by the U.S. Travel Association to improve the U.S. economy, remove barriers to travel and improve the travel process.

The U.S. Travel industry worked with Congressional appropriators to secure significant victories related to U.S. visa system and traveler facilitation reforms in the Consolidated Appropriations Act of 2012. The legislation reflects 2011 advocacy efforts by the U.S. Travel Association to improve the U.S. economy, remove barriers to travel and improve the travel process.

“This legislation is an acknowledgment by Congress that reforms to the U.S. visa and entry systems and passenger screening process are key to improving our nation’s economy,” said Roger Dow, president and CEO of the U.S. Travel Association. “Clearly, the travel community is being heard, and we applaud Congress for addressing these issues.”

“The extended visa expiration period for affluent Chinese tourists doing frequent luxury shopping tours to the U.S. is an excellent news for the U.S. luxury retail industry” said Pierre Gervois, an expert in marketing to wealthy Chinese outbound tourists and member of the Manhattan Chamber of Commerce. “That will mean more wealthy Chinese customers spending more money in U.S. luxury shopping malls and flagship stores, and creating more american jobs in the luxury retail industry”

U.S. VISA SYSTEM REFORM – The Act mirrors a number of recommendations put forth by the U.S. Travel Association in a May 2011 report on the U.S. visa system. That report identified visa wait times, visa validity periods and videoconferencing technology as keys to improving a system that cannot meet demand in emerging economies with growing markets of international travelers.

Initiatives championed by U.S. Travel and included in the consular affairs section of the bill include:
Visa Wait Time Reductions – To reduce the number of days applicants must wait before their visa application interview, the bill directs the Secretary of State to hire a sufficient number of consular officers, including limited non-career appointment (LNA) officers, in China, Brazil and India. These LNA officers will give the State Department hiring flexibility to meet increasing visa demand in the coming years.
Better Metrics and Long-Term Planning – Congress directs the Secretary of State to report on the steps it will take to reduce current visa processing wait times but also to submit a 5-year forecast of visa demand in Brazil, China and India. The plan should outline the number of consular officers necessary to meet the Department’s 30 day visa processing standard. Congress also directs the State Department to compare its forecast with the Commerce Department’s visitor projections in order to allow it to produce better long-term plans.
Extended Visa Expiration Period – A plan must be developed by the State Department to extend expiration periods for leisure or business visas that require a consular officer interview. The visa validity period for Chinese citizens is only one year, and U.S. Travel has recommended extending the visa validity period to five or 10 years, common with other countries, so business and leisure travelers do not have to undergo the visa renewal process annually and State can better meet demand of new applicants in China.
Secure Videoconferencing Technology – Congress has cleared the Secretary of State to develop and conduct a pilot program to conduct visa interviews for leisure and business visas using secure remote videoconferencing technology. With limited consular offices in emerging economies such as Brazil, China and India, the addition of remote secure videoconferencing would allow more citizens to apply for U.S. visas.
U.S. ENTRY & EXIT SYSTEM REFORM – The Act includes a number of significant improvements to the entry and exit process at U.S. air and land ports of entry.
Increased Staffing – The bill provides funding to hire an additional 300 new Customs and Border Protection Officers to improve processing of inbound travelers at land border crossings and international U.S. airports.
More Oversight of Operations – The bill requires CBP to report to the Congress on its long-term staffing plans and implementation of key entry reforms such as trusted traveler programs and elimination of unnecessary rescreening of international travelers and baggage.
Air Exit System – The bill provides $9.4 million to the development of a comprehensive plan for enhancements of a biographic air exit program to bolster security and allow for further expansion of the Visa Waiver Program.
DOMESTIC AVIATION FACILITATION REFORM – The Act makes a series of recommendations designed to improve the efficiency of traveler facilitation including:
Congressional Reports on Efficiency – TSA must submit to Congress reports on passenger and baggage screening efficiency and on how its workforce is being deployed at the nation’s airports to maintain average wait times below 10 minutes. As a recent U.S. Travel survey showed, an overwhelming majority of passengers are frustrated with screening checkpoints. The bill also encourages TSA to utilize privatized screening where more cost-effective.
Trusted Traveler – To help implement recommendations akin the U.S. Travel Blue Ribbon Panel on Aviation Security, the bill provides TSA $10M to implement risk-based screening and to expand known-traveler populations beyond the current PreCheck program.

In 2012, the U.S. Travel Association will pursue policies on behalf of the travel industry, many of which will create much-needed U.S. jobs and improve the economy. These include legislative vehicles for additional visa system reform, expanding the Visa Waiver Program, enhancing the entry process at ports of entry, and improving the efficiency of the U.S. air travel system.