Chinese Tourism and UnionPay Acceptance

China’s Outbound Tourism Market (Globally)

  • 80 Million International Trips by Chinese Tourists estimated in 20121
  • 16% Growth per year through 2020 projected2
  • $47.54 Billion UnionPay outbound travel spending in 20113
  • International travel spending increased 66.7% in 2011 according to UnionPay3

China’s Outbound Tourism Market (US)

  • US consulates in China processed a record 1 million Visa applications between October 1, 2011 and June 30, 2012, an increase of 43% from the same period in the previous year4
  • It is estimated that Chinese visitors to the U.S. will increase by 60% from approximately 1.2 million in 2011 to 2 million in 201511
  • UnionPay payment card usage vs. cash may increase the $6,000 average spent per Chinese tourist per visit (2011) by up to 40% according to several U.S. consumer studies and experience in Europe5 & 6
  • Current Visa’s issued today don’t account for multiple trips within a given year

Top 10 US Destinations for Chinese Tourists 7

  1. New York
  2. Washington
  3. Las Vegas
  4. San Francisco
  5. Niagara Falls
  6. Universal Studios – Hollywood
  7. Hawaii
  8. Grand Canyon
  9. Yellow Stone
  10. Yosemite National Park

Chinese visitors coming to the United States will triple by 2020, according to a new report from brokerage CLSA. The new wave will include a confident,  Chinese tourist that is willing to travel to different vacation spots other than local destinations like Hong Kong and Macau.

More than 17% of experienced Chinese travelers ranked the U.S. as their top vacation choice if money was no object — higher than any other destination. For first time travelers, the U.S. is the second most popular vacation spot.

Chinese have built a reputation as big spenders. Lines of shoppers from Mainland China are a regular sight outside luxury stores in Paris and Hong Kong, a trend that could spread.

Shopping is at the top of the agenda for Chinese that visit the U.S., with 87% of visitors splashing some cash at retail outlets in 2012. CLSA said the Chinese spend an average of $4,400 per trip on everything from high-end hotels to cosmetics, making them the second-biggest spenders after visitors from India.

CLSA said that companies like Tiffany (TIF), Estee Lauder (EL, Fortune 500) and Coach (COH) could benefit the most, as they have excellent brand recognition in China and offer cheaper prices in U.S. stores.

In addition to shopping, the new wave of Chinese tourists have another set of priorities that will make Las Vegas casino owners drool.

Mainland tourists are showing a greater interest in fine dining and gambling than others overseas visitors, and a growing appetite for concerts and shows, the CLSA report said.

With Las Vegas still struggling in the wake of a regional housing bust, casinos there have begun pulling out the stops to attract Chinese gamblers, introducing special food menus and concerts with Chinese speaking pop stars. The Palazzo is even now hosting a show called “Panda!” that features the China National Acrobatic Troupe.

Still, catering to a three-fold increase in the number of Chinese tourists is no easy task. The language barrier is one problem; CLSA called a series of high-end hotels in New York and found only two had Mandarin speakers on site.

China’s National Tourism Administration has attempted to address some of these problems, and last year published a series of guidelines directed at the country’s travelers.

References:

  1. China Outbound Tourism Research Institute (COTRI), Germany. “China’s Outbound Travel Boom Shows No Sign Of Slowing.” July 20, 2012. < http://chinatraveltrends.com/chinas-outbound-travel-boom-shows-no-sign-of-slowing >
  2. The Boston Consulting Group. “Travel and Tourism in China and Beyond.” March 30, 2011. BCG Perspectives. < https://www.bcgperspectives.com/content/articles/retail_transportation_travel_tourism_taking_off_china_beyond/print >
  3. Su Ning, board chairman of China UnionPay Co Ltd. “Chinese People’s Consultative Conference.” March 6, 2012. China Daily. Chinese set record for overseas buying. < http://usa.chinadaily.com.cn/business/2012-03/07/content_14774950.htm >
  4. National Tourism Administration of China. “Entice the new generation of affluent Chinese tourists.” China Elite Focus. < http://www.chinaelitefocus.com/case-study/in-the-first-half-of-2012-46-of-visa-applications-processed-at-us-embassy-for-chinese-leisure-travelers/ >
  5. The Telegraph, Malcolm Moore, London. “Chinese tourists bring £200m windfall for London retailers.” May 24, 2011. < http://www.telegraph.co.uk/finance/china-business/8534189/Chinese-tourists-bring-200m-windfall-for-London-retailers.html >
  6. Get Rich Slowly, J.D. Roth. “Research Reveals Credit Cards Encourage Spending” September 23, 2008. < http://www.getrichslowly.org/blog/2008/09/23/research-reveals-credit-cards-encourage-spending/ >
  7. China.org.cn Travel Editors, Beijing. “Top 10 US destinations for Chinese tourists.” March 2, 2011. < http://www.china.org.cn/top10/2011-03/02/content_22038228.htm >

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