China, from Exclusion to Inclusion
By John Poimiroo Principal, Poimiroo & Partners | October 28, 2008
There was a time in the past century when the United States government discouraged the Chinese from entering the country. Chinese immigrants were detained at the United States Immigration Station on Angel Island in San Francisco Bay until they either gained approval to enter or were deported, while immigrants from other Pacific nations entered with greater ease. The Chinese will be returning to Angel Island in February, when the U.S. Immigration Station reopens, but this time, as welcomed visitors to the United States of America.
In response to increasing financial and cultural ties between China and the United States, both countries have eased travel restrictions. The China National Tourism Administration (CNTA) and U.S. Department of Commerce recently announced a Memorandum of Understanding (MOU) which is intended to boost travel between the two countries and serve to "strengthen relations and forge new friendships." The MOU opens China's growing market to U.S. travel and tourism industries with a push toward expanding group leisure travel from China to the U.S. CNTA Chairman Shao Qiwei sees it as broadening exchange and cooperation between the countries in economic, cultural and air service areas.
Enthusiasm for the agreement was expressed by Alexander Glos, i2i China CEO, a leading travel consultancy and representation firm based in China, who called the announcement, "a new era in China-USA tourism that will change the face of the industry and be the single largest impact to inbound USA tourism in the coming five years." Clearly, i2i China has much to gain by the two countries improving the ease by which their citizens can travel back and forth.
China is now the fastest growing travel market in the world and, beyond Asia, the United States is the top destination of Chinese travelers. 100 million Chinese are projected to travel abroad by 2020, with Chinese travel spending is expected to be the second-fastest growing in the world at close to twice the global average, according to the U.S. Department of Commerce. Jamie Lee, director of LA Inc.'s (the Los Angeles Convention & Visitors Bureau's) China office anticipates that tourism from China will grow 50 to 100% to her city in the next four years, describing the recent U.S./China opening in travel as "huge."
Just do the math. The U.S. has 300 million residents, while China has 1.3 Billion, 230,000 of which are millionaires. Now that it is easier to visit the U.S., the next wave of tourism will come from China. U.S. destinations familiar to the Chinese will benefit first. California now receives 61.6% of all Chinese travelers to the U.S. and is experiencing rapid growth. In the past four years Chinese visitation as having grown 277%, according to the California Division of Tourism, with nearly eight out of ten Chinese leisure travelers reporting California as the main destination of their U.S. trip. In the last year measured, tourism from China to California grew nearly 35%. More people from China visit California today, than from France. Add Taiwan and more Chinese visit California than Germans, Australians or South Koreans. Only the U.K. and Japan send more of their citizens to California than China. "Being able to visit America is a dream come true for the Chinese," says Ms. Lee. "They have watched our country in movies and on television all their lives and now have the opportunity to visit and return to show and tell others of what they've seen, where they've been."
Until recently, the Chinese have had one of the shortest time frames from airline reservation to departure date (median = 15 days), compared to 80 days for the British. That short fuse has, in part, resulted from the uncertainty the Chinese have had regarding obtaining visas to enter the U.S. According to the American Chamber of Commerce in the PRC, It can take up to 20 days to obtain an interview to obtain a visa, which means travelers requesting visas two months ahead of their trip, don't book their flights until they obtain the visa. When you put that in context, the Chinese plan their trips with about the same advance as the British. Only, they often aren't certain to obtain a visa until shortly before their departure. The recent issuance of multiple trip one-year visas is now making it easier for the Chinese to visit both for business and leisure purposes. Past difficulty in obtaining visas has kept Chinese from attending meetings and conventions in the U.S. Considering that the Chinese are more likely than any other nationality to travel to the U.S. for business (59%) or to attend a convention (20%), past delays have suppressed U.S. revenues from Chinese business travel.
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