This story makes a case that governments — and not just tourism boards — have a big role to play in capturing more of the outbound Chinese travel market. Will authorities around the world take heed?
There’s only so much a single business can do to attract more Chinese travelers to its hotels, shops, tourist attractions, or tour services. At a certain point, it doesn’t matter what a business does next: Chinese customers will be limited at a macro level, whether it’s because of a limited number of flights from China, or perhaps due to a less-than-perfect diplomatic relationship between China and your country. South Korea is a case in point: Its tourism industry is heavily oriented toward Chinese travelers, but it’s currently struggling because of a strained relationship with the Chinese government.
As the Chinese tourism boom years with consistent double-digit growth are now behind us, a return to booming Chinese tourism may just require a bit more than an innovative private sector. Government initiatives such as the “China tourism years” may just be a response to slowing market growth, and a situation where the private sector can only do so much to boost profitable Chinese tourism further. In the United States, its tourism year followed a slowdown in Chinese tourism, and the EU’s tourism year followed a weak year often attributed to a growing fear of terrorist attacks across Europe. Similarly, Turkey is also hosting a tourism year—following declining fortunes in the Chinese tourism market. The idea is sound, but results may leave tourism businesses disappointed.
Despite the best intentions, governments may have forgotten about the most important part of the equation: Chinese travelers. Addressing Chinese tourism market demands and making it easier and more convenient for Chinese travelers to visit a destination should be central to any government initiative. This is what governments can do, and what you might want to lobby your government to do:
Reducing limitations on flights from China
The Chinese aviation industry can be tricky to deal with for more reasons than one. The Chinese government controls China’s three major airlines, China’s airports, and the military controls the airspace. International airlines aren’t wrong to complain about unfair Chinese competition, but dealing with China’s heavily regulated aviation industry is a necessary evil for achieving any growth in the Chinese tourism market. If there are no or only a few direct flights from China, your destination is automatically disadvantaged.
One of the main shortcuts to a greater number of Chinese travelers is to move in the direction of an open skies agreement with China. Among the countries that have already gone down that road are Australia, Japan, the United Kingdom, and the United Arab Emirates. While non-Chinese airlines have good reasons to fear that they would be disadvantaged by such an agreement, a greater number of flights from China is good business for virtually any other tourism stakeholder—including airports.
Subsidizing the private sector in the right ways
Subsidies can be tricky to deal with, both in terms of complying with World Trade Organization rules as well as making sure that they properly address the challenge they’re set out to solve. Faced with dropping Chinese tourism, Taiwan subsidized travel from countries throughout Southeast Asia to mitigate negative effects on its tourism industry. Chinese provinces and municipal governments, meanwhile, are subsidizing international flights at their local airports. The EU, as part of its tourism year efforts, is subsidizing B2B matchmaking sessions between Chinese and EU businesses to promote more cooperation. In other words, subsidies are a fact of life in Chinese tourism.
While the effectiveness and sustainability of greater subsidy initiatives such as the aforementioned can be questioned, targeted and well thought out subsidies can make a destination and its tourism businesses much more competitive, and governments should think outside the box to make the biggest difference with the smallest possible subsidies.
Want to spur Chinese travelers’ shopping in your destination? Subsidize airlines flying to your airports from China, perhaps by financing one extra piece of luggage. Another 50 lbs (23 kg) worth of goods purchased in your destination more than pays for the subsidy.
Want to spur Chinese independent travel to your destination? Mitigate the price difference between independently booked travel and the prices paid by price-conscious Chinese tour operators.
Think Chinese shopping would benefit from greater availability of mobile payments? Join Alipay and WeChat Pay in subsidizing rollout of their payment systems in your destination.
Struggling with overtourism in your capital or other prime sightseeing destinations? Subsidize domestic travel to destinations that have yet to reap the fruits of the Chinese tourism market.
There are endless possibilities that can be addressed with targeted subsidies. While governments tend to think big with major trading partners like China, with Chinese tourists, thinking smaller and outside the box may just prove much more successful—and certainly cheaper.
Collaborating with neighboring states or countries
While the ultimate goal of any destination marketing organization (DMO) and tourism board is to boost tourism to their particular destination, they would be well-advised to think bigger when dealing with Chinese tourists. Only a very limited number of Chinese travelers would go all the way to Europe just to stay in, for example, Slovakia. Similarly, only a very limited number of travelers would cross the Pacific to spend their whole vacation in Pennsylvania.
Working across borders to create a compelling “package” for Chinese tourists can prove very effective—and some destinations have started exploring regional collaboration to address Chinese demand for multi-destination travel. In Eastern Europe, countries came together under “Central and Eastern Europe Regional Tourism Center” to jointly promote tourism in the Chinese market. Other geographical regions may be advised to follow. A shared tourist is better than no tourist.
Facilitating visa application procedures, or even easing immigration laws
Perhaps one of the most proven methods to attract more Chinese travelers (or more profitable Chinese travelers) is to amend visa regulations for Chinese nationals. It has proved effective for places like Australia, New Zealand, Malaysia, Japan, and in the United States, the 10-year multiple entry visa holds the promise of more repeat visits of affluent, independent travelers.
But there’s more to visas than regulations. Being able to conveniently apply for a visa is also vitally important. How much is a direct flight between a destination and a Chinese second-tier city worth if residents of the second-tier city still must travel to Beijing or Shanghai to apply for a visa?
Focusing on Chinese travelers instead of Chinese tour operators
Governments tend to make the mistake of thinking about Chinese tourists in terms of Chinese tourism businesses. However, what is best for the Chinese tour operator isn’t necessarily the best for the Chinese traveler—and independent travelers are significantly more profitable than group travelers. In a textbook example of marketing myopia, destinations that have yet to find any success with Chinese FITs look at their current China marketing mix, find out that Chinese travel is dominated by tour operators, and focus efforts on satisfying these actors. Instead, tourism dominated by tour operators should be a clear sign that not enough is being done to address the needs and demands of independent travelers.
This story originally appeared on Jing Travel, a Skift content partner.
Additional links from Jing Travel:
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Photo Credit: An Air China plane is shown at Seoul Incheon International Airport in this photo from 2015. Governments around the world can take concrete steps to draw more tourists from China. byeangel / Flickr
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