In other words, China, using its tourism policy, and mainly the Approved Destination Status Agreement (see our post on ADS policy) , can direct its flow of tourists and thus support a country’s tourism sector by encouraging its citizens to visit it, or on the contrary undermine it by reducing access to it. As of the end of 2013, 146 countries had signed a bilateral agreement with China and were on the ADS list, a real boon as it gives them the right not only to welcome Chinese tourists groups (independent travellers are not included in the ADS policy) but also to advertise their destination in China via approved travel agencies. The UK signed the agreement in January 2004 and has since seen a good increase in the number of Chinese Tourists arrivals to almost 200,000 last year. 

Being granted a spot on the list is not a not at all a straightforward matter. Any political or economic disagreement with China, any critics directed to the country, any public act that can be considered as an offense (such as meeting the Dalai Lama) emanating from a country not yet enlisted and obtaining the precious pass can be delayed for several months or years. For instance, it is only after it extradited a Chinese national charged for corruption in China, that Canada was granted the ADS. In his study Dr Tse, highlights that China is prepared to “manipulate ADS to add clout to its soft power and advance diplomatic discussions”.

Even if a country benefits from the ADS, the Chinese government can still use tourism flows as a mechanism to show support or as a reprisal method with any countries it has some disagreements with. Dr Tse illustrates that China encouraged its citizens to travel to Thailand after the tsunami in 2004, and on this occasion, Air China opened new airlines routes between the two countries. On the other hand, Dr Tse underlines that ‘during the territorial dispute with Japan over the Diaoyu Islands, many of China’s leading travel operators stopped promoting Japan. Others cancelled trips and refunded their customers. This led to an estimated 70% fall in Chinese tourist receipts in the country during 2012.’

On the same topic, Roy Graff, ChinaContact MD, pointed out in a previous article (Nationalism rises ahead of National Day) that “ The precarious nature of the Chinese outbound tourism sector is something that is important to understand. Before Japan, other countries have experienced similar boycotts. The Philippines saw a drastic drop in the number of Chinese arrivals when it got into a dispute over islands. […] Norway became an undesirable destination after the Nobel Prize Committee awarded the Nobel Peace Prize to Liu Xiao Bo. Even France saw a glut in tourism arrivals following the Paris Mayor meeting with the Dalai Lama.”

Outbound tourism is a strong political tool that allows China to not only control the global tourism sector today but also to shape international relations at its liking. Any destination wishing to dip into in these “walking wallets’ will need to adapt to China’s standards, and will have to remember that its international politics will influence the flux of Chinese tourists on its territory.

Roy concludes that “There is no prescription for this. In China economics and politics are always interwoven and anyone that does business there must be aware and be vigilant. As an observer of the industry since 1998 I at least find comfort in the knowledge that the long term trend is for more people from China to travel abroad, get to know other cultures and make friends in other countries. International travel can build bridges that over time, may lessen the ability of governments or media to influence the masses to such a degree.”

Affinity China sat with Roy Graff, Managing Director of ChinaContact, to ask for his views on why the UK is not a top destination for Chinese and what can be done to make it one.

Roy has lived and worked in China and has been involved in the outbound tourism sector since 2002 having begun to learn Chinese in 1998. He founded ChinaContact in 2005 to help destinations and companies that want to attract Chinese tourists.

Q: The United Kingdom signed the Approved Destination Status (ADS) agreement with China in the summer of 2005. It has been an approved destination for nearly 8 years. Why are tourist numbers not growing as fast as to other countries?

A: In November of 2005, soon after the ADS agreement was signed, I helped UKinbound organise the first British delegation to exhibit in China, at CITM (China International Travel Market) in Kunming. Why was it UKinbound that led this delegation? Because the official government organisation responsible for marketing the UK abroad – VisitBritain – didn’t have the budget. Since then, VisitBritain has gotten serious about China but has repeatedly seen its budget being cut by both Labour and Conservative governments. Recent announcements of more investment (which is directed not only towards tourism promotion) not withstanding, overall marketing budget for VisitBritain is not sufficient to compete with what other countries are spending in China. Visibility and activities of other ‘direct competitor’ destinations, namely Australia, New Zealand, USA and France is much higher in China.

Even with effective promotion, the UK faces a few major challenges if it wants to attract mass tourism from China:

• The visa cost and cumbersome process of applying
• Being an island nation makes multi-destination tours more complex
• Cost of living is prohibitive for long-stay tourism

• Little knowledge and appeal of attractions beyond London

 Q: In 2005 the media began the hype about how the millions of new Chinese tourists will lift the UK hospitality and retail economy. This is clearly not happening. Are Chinese tourists really the saviours of the high street?

A: The retail industry in London is very happy with Chinese consumers; we just need more of them. Britain was late to this game since the EU signed the ADS agreement two years earlier. At that time, the vast majority of Chinese tourists came in large groups and travelled by coach across Europe to visit as many landmarks as they could. But in the last 5 years, what became very clear is that Chinese outspend most other nationalities when they travel, and the rate of growth overall has surpassed 15% every year. In 2005, UN WTO (World Tourism Organisation) predicted that Chinese outbound tourists will number 100 million by 2020. It has since revised that date to 2015 and recently the President of China said he believed 200 million Chinese will travel abroad by 2020!

For the UK, I’ve long argued that the focus should be squarely on high net worth individuals and small groups of discerning tourists. It would be better to have 400,000 Chinese who spend £3000 on their visit than a million who spend £1000. In 2005, the idea that Chinese would outspend Americans, Japanese and even Middle Eastern tourists seemed ridiculous but this is fast becoming the reality.

Q: Walk us through what it’s currently like to be a Chinese traveler interested in visiting London for the first time. How does this compare to other options they have in Europe?

A:  To illustrate this, we can look at the typical statement from the Home Office (responsible for immigration issues) when asked why it is so difficult for Chinese to get a visa to UK (the same applies to Indian, Brazilians, Russians…).

The UK’s government website statement says:

“The number of visas issued to Chinese nationals has risen rapidly in recent years. Immigration statistics released this month show that in 2012 we issued 75% more visas than in 2009 underscoring the UK’s increasing popularity as a destination for tourism, business and study.”

– 2009 was a slump year in global tourism, with numbers from China drastically below 2006 levels. In real terms, Chinese visits to the UK stayed about the same from 2006 until this day.

“96% of Chinese nationals who applied for a visa last year got one highlighting how straight forward the visa process is for the vast majority of applicants. The success rate for students is even higher at 98%.”

– The US now issues tourist visas in 3 working days. The 96% process rate does not say how many are approved in 5 days (about half) and how many people give up on the process and simply don’t apply, or get their visas rejected at the private visa processing centre because of the complicated forms, the need for additional documents and the requirement for personal interviews and biometric data. According to tour operators, this is as much as 30% of all applications.

“The new visa services and resources are in addition to other recent enhancements for customers which include:

• an optional priority visa service for business visitors and tourists which returns visa decisions within 5 working days
• a simplified ADS process, including shortened on-line application form and streamlined requirements
• launch of two new step-by-step Chinese language visa guides for Business Visitors and ADS agents and their customers
• the establishment of a Business Network in China with dedicated UK Border Agency staff to assist businesses with their visa requirements”

–       Most of these are cosmetic changes that make little difference because the underlying assumption of the Home office is that all Chinese who apply for visa are guilty of wanting to illegally immigrate until proven innocent.

–       If you are a self made business owner in a second tier city thinking of going for holiday in the UK, taking time off to fly to another city in order to give your fingerprints, and not even having a guarantee you will get the visa, is a major hassle. Imagine if you had to do that as a British citizen wanting to go to China? By contrast, visiting Europe is both cheaper and a smoother process. There is a choice of consulates you can go to and the form is the same in all, and much shorter. You also have the entire EU region available to you to travel freely in.

–       The new changes introduced by the UK government to take biometric data on-site and allow people to hold on to their passport are good, but won’t scale sufficiently.

Q: How much does the average Chinese traveler spend in London when they do visit? What are they spending their money on? Is it only shopping as much of the media reports? How does this compare with the spend level of other visitors to London?

A: Average spend per person per trip according to VisitBritain is £1600. This is higher than most nationalities but isn’t the whole picture. Coach tour tourists are only in London 2-3 days and spend much less while independent travellers and business people are in London for longer and spend 2 or 3 times that just on shopping. 60% and more of their spend is on shopping but we know independent travellers in particular also want to try cultural activities such as afternoon tea, fine dining, watching horse racing.

Q: Despite the “hassle” of visiting London, it remains a popular place in the minds of many Chinese. What is the appeal of London to Chinese travelers?

A: I think you have similar appeal in New York City, Paris, Hong Kong, and Singapore – globally famous cosmopolitan cities that have a unique, distinct set of characteristics. Many of China’s cities have developed to resemble each other so this uniqueness is a draw. London has a long established Chinese diaspora community and a thriving China town. It is an education and business centre and had historical ties to China.

Despite London having higher prices than Europe for shopping, the sales offer great value and the selection is world class. Prices are still much cheaper than China. Chinese love value, so getting 12-15% off for VAT refund at the airport is great.

Q: There is a growing number of Chinese FITs now. What is the difference between the FIT traveler to London and the group traveler? Is there a difference in where they stay, what they’re looking for from the experience?

A: Yes, there are quite a few differences. FIT stay longer and choose better hotels in central locations. They try local activities and food more than group tours that usually end up eating mostly in Chinese restaurants. This is less a cultural necessity and more determined by tour operators’ cost control.

Q: What advice do you have for luxury hotels in London? What are they doing right? What can they improve on?

A: Hotels in London should make the most of their location and walking access to retail, food and entertainment areas. Preparing Chinese language information at the hotel, stocking good local Chinese language shopping and activities guides and being able to address concerns of customers in Chinese are all important. The major luxury hotel chains have done much to offer amenities to Chinese guests and train their staff on Chinese cultural awareness. Oftentimes this applies only to those properties that receive a large number of Chinese groups and delegations. I think it is important that also those hotels that get less frequent FIT leisure and business clients as well as smaller chains and independent hotels focus on this as it will encourage positive word of mouth promotion, a very powerful marketing tool in China.

The other thing that helps is to not only offer free wifi throughout the hotel but encourage clients (and casual visitors) to check-on and post recommendations on Chinese social media sites such as Jiepeng, Weibo and Weixin.

Q: What advice do you have for luxury retailers in London? What are they doing right? What can they improve on?

A: A major frustration for Chinese shoppers in the UK entails finding the right size (shoes/ clothing). Meanwhile, people complain that they often have to compete with other fellow Chinese shoppers in busy shopping districts. Nothing is more disappointing than going into an underprepared store and coming out empty handed. Off-the-beaten shopping alternatives would be much appreciated for the independent Chinese visitors.

Chinese luxury shoppers are extremely keen on showing off their purchases using social media. However they are careful not to disclose the actual spend of their purchases. They might however hint that ‘’several credit cards have been maxed out during the shopping trip”. The large department stores such as Harrods and Selfridges as well as purpose build shopping areas like Westfield have invested in research and staff training, hired Chinese speaking staff and started to offer Chinese language in-store information.

Retail outlets that want to make sure they are on the Chinese shoppers’ map would be advised to invest in cultural awareness and service training, offer Chinese language guides and have signs in Chinese showing that they accept the China Union Pay payment card. Learning to distinguish the different types of Chinese shoppers and knowing where they are from (North China, South China, HKG, Taiwan etc.) to better serve them would be great.

Remember that Chinese customers are instinctively suspicious of sales people, so aggressive or overly friendly sales approach may back-fire.

 Q: What should the UK as a whole be doing to win more Chinese visitors and reach the target announced last year by the Culture secretary, of trebling Chinese visitors by 2015?

A: The recent announcement for visa simplification and having the forms in Chinese is a good start and should be implemented as quickly as possible. Communicating the changes effectively to the travel trade and the public in China is equally important. As suggested by other retail associations and tourism bodies, repeat, multiple entry visas should be pro-actively offered to those who visited before and to those that had multiple entry visas to the US or Europe in the past. Perhaps the biometric data could be collected on arrival in the UK (as is the process in US) for low-risk applicants. We should certainly encourage more high-end tourists and long-stay leisure/business visitors so independent visitor visas are highly recommended.

Q: Tell us more about what you are doing to help London in attracting more Chinese travelers and improving the experience of those that are already visiting.

A: In 2005, I helped UKinbound take the first delegation to exhibit at CITM. A year later, we worked with VisitLondon (now London and Partners) to exhibit at BITE and to win the CTW award (Chinese Tourists Welcoming award).

Our clients use our expertise to help with training and cultural awareness while we help create strategies for travel trade promotions and social media campaigns in China.

We work closely with the China Outbound Tourism Research Institute (COTRI) to certify hotels, shops and attractions as ‘China ready’. This involves training and auditing to ensure they have the right Chinese language information, appropriate customer service and know how to serve and up-sell to Chinese customers.

We have produced a number of forums and conferences to help educate the hospitality and retail sectors on the value and importance of this market, such as the WTM China forum (China – the Future of Travel) and the China Edge conference on luxury Chinese tourism and retail, which will take place July 3^rd of this year.

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Roy gave an excellent keynote on the potential of China for the summer conference of European Cities Marketing in Zagreb in June 2012.

He is a great speaker, knows his subject inside-out and is generous with his tips and advice. Member feedback has been extremely positive and we will all want to hear more from Roy in the future.

He comes with a strong recommendation.

Garry White

CEO – European Cities Marketing

8 June, 2012

Joan Vila, TUI PLC

At the recent WTM (World Travel Market) in London I interviewed Joan Vilà, Managing Director of Accommodation & Destinations Sector at Hotelbeds and TUI PLC, the parent company. Hotelbeds are 10 years old and have unveiled a revamped brand and some growth goals at the WTM this year in London.

They intend to increase investment in IT and sales/marketing spend (40% increase) and grow their workforce by 18% with particular focus on expansion in Asia and the Americas. I sat with Mr. Vilà and Marta Alvarez, Deputy Managing Director – Sales and Marketing, Hotelbeds to discuss their experience in China to-date and future plans for that market. TUI acquired an Asian company, Pacific World, in 2007 and proceeded to merge certain functions with Hotelbeds in the Asian countries. Until now, many backoffice functions and office space are shared between the two companies. While Pacific World is a full service corporate travel, incentives and meetings service provider, Hotelbeds is a bed-bank. Hotelbeds contract space and discount rates at hotels worldwide and distribute this wholesale to retail agents (through the BedsOnline brand), white-label website partners (Hotelopia) and to distributers and OTAs.

They have experienced strong growth in Asia over the past few years, especially in Korea, Singapore and Thailand. Their focus for the moment is on increasing the overall number of directly contracted hotels in the region to make them a strong player in regional travel sector. The vast majority of hotel reservations happen between Asian countries as opposed to travel from Europe or America to Asia and therefore Hotelbeds needs to own sufficient product at competitive rates compared to regional players in this sector.

Marta Alvarez, TUI PLC

TUI PLC also has a joint venture in China, TUI-China. TUI own 75% in this company while a major local brand, CTS, own 25%. Earlier this year TUI China obtained an outbound travel license from CNTA, allowing it to sell outbound tour packages to Chinese directly. Hotelbeds, by contrast, concentrates on working with the travel trade and for the moment, is focusing on driving more hotel bookings into China from their existing network of travel agent clients from around the world.

In terms of the challenges ahead, Hotelbeds are growing the team of local Chinese contract managers to increase the numbers of hotels in China and improve the prices and conditions of these contracts. They recognise that the preferred business model of Chinese hotels is different from that of Hotelbeds and are pushing hotels to accept their standard business terms. This includes providing guaranteed allocated rooms and receiving payment from Hotelbeds post check-out for all reservations. Overall they are happy with their progress to-date in Asia but acknowledge that Japan is proving a much tougher market to operate in, while China will take some time to become one of their mainstream destinations.

To assess Hotelbeds performance in China specifically is difficult as they are mostly focused on inbound business to China and Asia. They are in the contracting and growth stage now. There is no doubt that they have resources and existing infrastructure through other TUI companies such as Pacific World and TUI-China to implement an outbound strategy, selling global hotel reservations to the Chinese travel trade and becoming a major player in this sector. The advent of the outbound license given to TUI-China can make this process faster.

In terms of corporate image for TUI PLC and Hotelbeds in China, they can greatly improve their positioning through better localisation of their messaging and engagement with China’s dominant search engine, Baidu. The Chinese industry will appreciate knowing TUI group’s scale, however the website is presently not translated to Chinese. Hotelbeds also does not seem to have a Chinese language website or even Chinese information available to download.

While TUI-China does have both Chinese and English sites, the branding is very different than that of TUI Group and the site would benefit from a design refresh more suitable to Chinese viewers. The logo and brand could be localised as well as TUI’s Chinese name is actually pretty good (途易 – roughly translated as ‘the road is easy’).

Roy Graff, for ChinaContact and The China Business Network

About Hotelbeds: 

 Hotelbeds (www.hotelbeds.com) is a global hotel distribution partner with an online accommodation database of over 45,000 hotels from over 1500 hotel chains and independent hotels in 147 countries.

For the year ended 30 September 2010, Hotelbeds sold over 11 million roomnights and outperformed the market with 24% growth in total transaction values (TTV). For the year ended 30 September 2011 Hotelbeds sold circa 14 million roomnights and its total transaction values are forecast to increase by 25%.

Hotelbeds was founded in Spain in 2001 following the acquisition of Barceló Travel Division by First Choice PLC in 2000. When TUI Tourism and First Choice Holidays PLC merged in 2007, Hotelbeds became part of the Accommodation & Destinations Sector of TUI Travel PLC, the international leisure travel company. Hotelbeds has 132 offices in 38 countries and employs over 6000 people.

Notes for resubmission and use: Unauthorised use of content from ChinaContact.org is strictly prohibited. Quote and link back to original article is permitted. For republication rights, please contact the webmaster.

Lastly, I tried to emphasise the growing importance of the Internet in China to develop brand awareness and stimulate demand. You still need the trade of course, but the web provides a direct communication channel with the end consumer and social media gives you that word of mouth trust factor.

VB tweeted me that maybe next year, each BRIC market might get its own one hour workshop. Here’s hoping. Everyone knows how to deal with Americans and Europeans. When Australia is pledging 30 million dollars for marketing to Chinese, I’d say it is time for UK to invest in future proofing our tourism industry.

London, UK 01 July 2008: With the strong support of VisitBritain, China National Tourism Administration, Visit London, Kunming Municipal Tourism Board and the Pacific Asia Travel Association, top experts from tourism bodies and travel companies intimately involved in China are meeting at World Travel Market in London on the 12th of November. For a full day, these experts are sharing their case studies with delegates from China, Europe, America, Africa and the Middle East at Europe’s premier travel trade exhibition.
Since 1999, China has embarked on an unprecedented rate of travel industry growth domestically and internationally. This rate is expected to remain stable at over 10% for the next 12 years, on course to make China the top tourist destination and tourism source market before 2020. While the size of the market for travel products and services is potentially huge, generating real profits has remained an elusive goal for many reasons. Most important of these is the communication and cultural gap, followed closely by restrictive legal and financial policies still in place in China.

2008 has been a turbulent year so far – the euphoria of Beijing holding the Olympic games and the tragic earthquake in Western China. These events and other developments are having serious impacts on the state of the tourism industry in China. The WTM-ChinaContact forum is the only event outside China that can discuss these developments with authority. Through forums and interactive panel discussions delegates deepen their insight of China as a tourism market and destination.

This landmark event held at the premier international travel trade exhibition, World Travel Market, is now in its third year. Support is given from international organisations and industry leaders as well as global travel trade media partners. Following on from the 2008 Olympic Games in Beijing, unprecedented media attention falls on China. No travel organisation can afford to miss this rare opportunity for real knowledge and networking with Chinese travel professionals. A delegation of Chinese tourism officials and travel agents as well as travel trade media will be visiting during WTM. Networking opportunities will be available to maximise the benefits to forum delegates.
Focusing on the need for bi-lateral tourism development, the forum returns to the themes of it’s inaugural year as China tries to embrace it’s new status as a mainstream destination and sought after source market. With the US added to the list of approved tourist destinations there is almost no limit to where Chinese can travel.
The forum will open with welcome speeches from representatives of Visit Britain, China National Tourism Administration and PATA.

Highlights of the forum:
China Outbound tourism
• Eminent China tourism expert Professor Wolfgang Arlt will discuss the impact of various events on China’s tourism sector in the coming year.
• Rosita Yiu heads Accor Hotels’ Asian sales. She shares her experience of marketing accommodation to Chinese visitors.
• Insights into the experience of different foreign tourism organisations and companies in China will be given by Roy Graff, Managing Director of ChinaContact.
• A full speaker list is available from the forum website

China Inbound tourism
• The Chairman of Kunming Tourism Board talks about the growth in special interest tourism in Western China.
• Sportsworld is an official ticketing agent for the Beijing Olympic Games and official China agent for the Wimbledon tennis championships. Paul Lemon, General Manager of Sportsworld Beijing talks about their experiences of operating in this emerging market for sports tourism services.
To learn more visit http://www.future-of-travel.org
Until 12 October, the early bird delegate rate is only £288.00 (USD 568 / EUR 368) for full day event and £148.00 (USD 288 / EUR 188) for half day. Tickets include access to an exclusive online network and all forum presentations. From 12 October and during WTM, the rate is £330.00 (USD 648 /EUR 418) full day and £168.00 half day (USD 328 / EUR 218).

Contact details:

Media: info@ccontact.com +44 20 3239 9688
Sponsors: info@ccontact.com +44 20 3239 9688
Registration: info@future-of-travel.org +44 20 8783 9588

download the WTM-ChinaContact press release