China is one of the fastest developing tourism economies in the world.  Travel and tourism’s projected contribution to total GDP in 2006 is projected at 11.8 percent with overall share of jobs placed at 8.6 percent. Spends on personal travel and tourism this year is expected at $ 99.159 million.

In 2016, China will have spent $ 405 million in personal travel, growing its market the fastest in the whole world at a 9.9 percent annualized real growth starting next year until 2016, according to the World Travel & Tourism Council. With business travel, China will spend $ 35 million this year ranking 6th on the world list, posting a 21.9 percent growth following Macau closely at number 2. But in 2016, China is expected to fall a close second to the US, in terms of business travel spends valued at $ 146 million and to score first in terms of the fastest annualized real growth at 10.1 percent between 2007 and 2016.

Capital investments are also going to surge this year with $135 million to be poured into China. This represents a 17.3 percent growth in capital investment for the Chinese. By 2016, China will have taken over all countries, including the US in investments, with $475 million raked in by the tourism industry. By which time, China visitor exports will have followed the US at $99 million and will have employed the most number of people at 12 million.

“It is definitely an exciting market. It is definitely out there,” said Alexander Glos, CEO if i2i Media Beijing, China.

But in order to market to the Chinese tourists, Glos recommends a 4-prong approach including non-independent entry which entails coalition with a local group in China. The advantage of it includes getting very quickly into China and getting more local market knowledge fairly fast. The disadvantage with non-independent deals is lost of control over the product. “You have to find a very strong partner in order to crush the market,” Glos said.

The other approaches include the representative liaison entry wherein one recommends a group going in for the first time. They work through an agency with some kind of a contract relationship in which a group works and answers to the destination. Glos said, “This offers easier control over ways to brand, market and receive information through the agency contractor.”

Independent entry is a very difficult option even as a licensed agent.  Nevada, also Los Angeles, are currently in China as representative offices.  But the support needs more beefing up. Wholesaler or consolidator approach offers good opportunity especially when conducted over the Internet.  However, this also gains very little control over the tourism product.

The biggest challenge with promoting to China is that they know very little about US destinations. “Does it snow in Florida in the winter?, they will ask. They don’t have a clue about the destination. Absolutely no idea.  So why get a visa is the mentality oftentimes,” said Glos about the Chinese who fear not being able to speak English, let alone enjoy his holiday due to language barriers.

Create an audience. Go with the trade audience to find the best selling mechanism. Drive the consumer market through the buyers. Work with the press who will help drive consumers through the buyers. Work with the government to ensure the satisfaction of state officials with the work being done on tourism promotion of the US destination. To succeed in China, juggle all these balls well.

Sell the best and always advertise said Glos. China is the world’s biggest media market with a population of 1.3 billion people. Advertising is the only way to reach the mass market. “Run soft articles, publish witness accounts, develop websites and conduct a number of familiarization trips.

Localize sales and post them in Mandarin. Localize communication. This is absolutely critical to your product,” said Glos advising agents they cannot capture the entire market in one year. Best thing to do, he said, is approach the market through consolidators and develop 40 to 50 master buyers of agents in the outbound market. CVB’s and agents should drive the market through receptive and Chinese consolidators to make it work.

In China, there are about 800 licensed outbound agents out of 12,000 travel agents in the country. These outbound agents are considered the core market; however, there are many online agents growing rapidly at the moment. 

Corporate business has also become more distinct in the marketplace. Chinese corporations are sending more and more people overseas. The MICE market is exploding with 10,000 trade shows a year conducted in China and over 30,000 government corporations or association events ranging from small to very large ones attracting up to 1 million people.

Glos said agents should bear in mind and understand that from day one the Chinese receptives and consolidators can only get interested in the product if they make money selling packages. “Pre-design your packages from 7 days to 25 days with visits to different cities. Come into China able and ready to offer various packages with airline deals, cruises, promotional partnerships and other rate attractions. Receptives are your key. Prepare your destination first and foremost for the China ‘onslaught’ about to happen. This outbound market is huge. Look at how Las Vegas got ready for the influx,” said Glos.

Approved Destination Status will eventually happen for the US. “If the Vatican has ADS, I can imagine America will soon get it,” Glos said.  Regardless whether it happens sooner rather than later, destinations should get ready for the ‘avalanche’ before any other destination pinches this booming business.

Wang Ping, chairman of the Chamber of Tourism Commerce, All China Federation of Industry Commerce said: “There is a change in the government’s role. It is divesting and privatizing. “And the first companies to get in will surely be the ones that can derive the most benefit from China,” she said. Wang added China will be prepared to provide the largest supply of tourists by 2020 and by then, about 100 million Chinese will be traveling abroad every year.

In 2004, the EU opened its doors to China. This was followed by some countries in Africa and South America. The Sino-US MOU on travel cooperation was signed. “All these indicate that the Chinese will travel en-masse, and that outbound tours in China will enter a new business era,” stressed Wang.

Outbound Chinese travelers were estimated at 28 million in 2004 with growth of 42.68 percent that year alone. Year 2005 seems to be the benchmark year with total foreign investment reaching the $50 billion mark, accounting for nearly 11 percent of the $450 B total foreign capital accounted for in all sectors in China, truly the awakening giant.