Travel trade calls for shake-up to meet mainland China tourist boom

The surge in mainlanders travelling abroad has spurred the tourism industry to call for an overhaul in infrastructure and visa policies

PUBLISHED : Monday, 05 May, 2014, 5:38am
UPDATED : Monday, 05 May, 2014, 6:50am

From Auckland to Angkor Wat, Chinese tourists are exploring the world in numbers that has the travel industry rushing to lay out the welcome mat. The challenge remains whether businesses and governments can co-ordinate the right reception strategy.

"At the current rate of progress, there is no conceivable way the existing plans for infrastructure will be ready to absorb these numbers," said David Scowsill, the chief executive of the World Travel and Tourism Council.

Travel lobby executives complain governments are asleep to the economic and job-creation potential Chinese tourists can bring. Gripes include infrastructure construction delays, stringent visa and border controls, and poor workforce training.

"The travel industry does not get the respect it deserves," said Christopher Nassetta, the president and chief executive of hotel group Hilton Worldwide.

By 2030, there would be one billion middle-class Chinese and 1.8 billion people travelling internationally, Scowsill said. Last year, one billion people crossed an international border.

"We need a lot more consensus building and as much effective aligned advocacy as possible," said Martin Craigs, the chief executive of Pacific Asia Travel Association.

Craigs highlighted the new runway debates in Hong Kong and London as examples where decisions need to be expedited.

The travel and tourism trade accounted for 9.5 per cent of the global gross domestic product last year and supported nearly 266 million jobs, the WTTC said.

The impact of the government is directly felt on border controls, where visa application processes and security checks have tightened since the 9/11 terror attacks. For years, the travel industry complained the system focused primarily on keeping people out rather than welcoming them in.

When British Prime Minister David Cameron learned that a third of new jobs created since 2010 were in tourism, he sat up and listened, said Christopher Rodrigues, the chairman of Visit Britain.

Last year, Britain's much maligned visa application process was overhauled. That helped enable 200,000 Chinese to visit the country last year, up 17 per cent from 2012. The target was to attract 500,000 Chinese by 2020, Rodrigues said.

Lobby group UK China Visa Alliance estimates Britain is missing out on 24,000 new jobs and £1.2 billion (HK$15.6 billion) in annual retail sales from Chinese tourists because of the country's strict visa laws. Many tourists bypassed Britain and instead visited continental Europe, where a single visa gives them access to the 25 Schengen member countries. Other countries are slowly crafting a strategy to target Chinese visitors. In some cases, this means focusing on the right tourist demographic.

"If we are going to fill a hotel room, we want to fill it with someone who will spend," said Frank Kilbourn, the chairman of South African Tourism.

Keen to go on safari and buy diamonds, 154,000 Chinese visited South Africa last year. Their numbers grew an average 45.4 per cent a year in the past five years, Kilbourn said. He plans to soon open offices in Shanghai.

The travel industry does not get the respect it deserves
Christopher Nassetta, Hilton

In Japan, the government was expanding its range of duty-free shops and exploring ways to let visitors reclaim an 8 per cent sales tax at the airport or other locations, said Ryoichi Matsuyama, the president of the Japan National Tourism Organisation.

Tourists to Japan rose 24 per cent last year, with Chinese visitors rising 87 per cent in the first three months of this year compared with the same period last year, said Matsuyama. This follows a drop-off in visitors after the earthquake in 2011.

Already the Chinese tourist demographic is changing, posing challenges for executives striving to keep up with consumer trends.

About 70 per cent of Chinese travellers preferred the security and lower cost nature of organised tour groups, said Jason Yap Thian-seng, the chief executive of Travelzoo Asia Pacific, an online travel agency.

However, typically, younger and wealthier independent travellers were growing at 60 per cent annually and within 10 years would be the largest market segment, Yap said.

"If your brand gets known in China, that's going to help drive business with Chinese overseas," said Richard Solomons, the chief executive of InterContinental Hotels Group.

The firm has 208 hotels in China, with 200 more in the pipeline and is finalising a campaign to promote its global hotel network to its Chinese client base.

Increasingly, major overseas retail firms are employing Putonghua speakers and finding ways to co-ordinate with Chinese tour agencies to bring footfall.

Value Retail operates retail parks selling end-of-season brand-name clothes across Europe. It will open in China later this year. It started working with Chinese airlines and travel firms in 2003 and in recent years had seen Chinese visitors increase 38 per cent on average every year, said chief executive Desirée Bollier.

Regarding the reception tourists got from governments, Bollier said, "We need to make the journey as seamless as possible and we are far from this."