UAE and global markets eye China to boost revenues from tourism

As the global tourism industry looks back upon a dismal year that was plagued with recessionary fallout curbing travel expenditures, economic giants such as the US and Japan, along with the UAE, are courting the Chinese to set sail for their shores in 2010.

Why the Chinese? The answer lies in the recent study conducted by the US Commerce Department, which estimated that the average Chinese tourist spends about $7,200 (Dh26,445) per person per trip – the biggest spenders globally.

Dubai's Department of Tourism and Commerce Marketing (DTCM) kicked off its bid to grab a slice of this pie by organising roadshows in mainland China earlier this year, along with hosting Chinese tourist parties – travel agents and media – since September, in a bid to become the largest tourism outbound source market and top tourist destination by 2020.

A few weeks ago, the US and Japan launched their own respective promotions to tap into this billion-dollar market, with aggressive marketing campaigns and, possibly, even a relaxation in visa regulations.

Spending power

Estimates of outbound travel from China indicate nearly a 12 per cent growth, according to a research report by RNCOS, bringing the figure to nearly 45 million travellers between 2004 and 2008.

"Sustained economic growth, a rising number of affluent people in total population and other parameters" have been identified in the research report as prime factors that transformed the outbound tourism industry in China.

"We closely worked with DTCM to organise roadshows and exhibitions in China earlier this year. The UAE has seen nearly two million visitors from that country over the past five years," Manu Mehrotra, General Manager, Al Tayer Travel Agency, told Emirates Business. "This is largely due to the business and trade links between the two countries, which have been facilitated by the signing of the Approved Destination Status [ADS] agreement."

The Chinese Government exercises control over outbound travel, with citizens only allowed to travel to countries with whom a memorandum of tourism co-operation has been signed.

According to DTCM statistics, more than 96,300 Chinese guests stayed in Dubai hotels in 2008, up by four per cent compared with the previous year.

Market research company Nielsen's China Outbound Travel Report backs this trend with, however, a more conservative spending pattern of about $3,000. "With the rapid growth of the Chinese economy, the China outbound travel market is expanding," Grace Pan, head of travel and leisure research at Nielsen, said in a statement.

About half a million Chinese travelled to all US destinations last year, and that number is expected to grow by double digits in each of the next four years because of China's growing economy and new wealth, according to the US Travel Association. Tourism officials note that of the Chinese middle and upper classes, each rivals the size of the entire US population, so luring just a fraction would produce huge numbers of travellers.

Tough competition

The UAE faces stiff competition from the US and Japan, as each nation vies for greater flight connections, online partnerships and simpler visa procedures to woo the outbound Chinese traveller.

In the US, California, Hawaii and the city of Las Vegas have launched their own marketing campaigns to charm the Chinese. US embassy officials and Chinese airlines have already received requests to ease logistical burdens of flying into the country – especially Hawaii, which is closest to mainland China by air.

To lure the Chinese, the Hawaii Tourism Authority has budgeted nearly $2.7 million this fiscal year for marketing in mainland China and in Korea, David Uchiyama, HTA's Vice-President of Marketing, told Reuters. That includes $447,000 to participate in the World Expo 2010 in Shanghai, which begins in May.

Last month, TripAdvisor, arguably the world's largest travel community and an operating company of Expedia, upped its game by targeting China's online travel industry through the acquisition of Kuxun.cn, the second largest online travel-related website in China that helps consumers find competitive prices on flights, hotels and train travel.

This followed TripAdvisor's early 2009 launch of DaoDao.com in China, a localised reviews and community site for Chinese travellers. In the past six months, DaoDao.com has become one of China's top 10 websites focused on travel.

"No matter the language or culture, travellers worldwide have proven they place great value on the ability to research travel information online. The extraordinary growth of DaoDao.com is just one piece of evidence that Chinese travellers trust information and insight provided by their peers," Steve Kaufer, founder and CEO of TripAdvisor, told this newspaper. "With both DaoDao.com and Kuxun.cn under our umbrella, we will enhance our ability to deliver trusted content that travellers seek, and further position TripAdvisor for expansion in this fast-growing market segment."

The latest statistics from travel industry research authority PhoCusWright notes that the online Chinese market segment today represents about 11 per cent of the country's entire travel market and will grow rapidly to about 20 per cent of the total market by 2011.

Travel hassles

But for the Chinese traveller, preparations for a trip to the US can still be a hassle. Only the US Embassy in Beijing and four consulates located mostly on China's eastern coast handle visa applications, which require an in-person interview. However, travelling in groups, which tourism experts say Chinese prefer, can ease those impediments.

Japan also plans to relax visa regulations for Chinese travellers to help boost mainland visitor numbers ninefold as the nation's tourism industry seeks to ease its reliance on a shrinking domestic population. The country plans to attract "nine million Chinese visitors in 2019", Yoshiaki Hompo, the head of the Japan Tourism Agency, told Bloomberg. He said: "We are trying to relax the stringent policies taken by our government. Visa regulations for other Asian nations may also be liberalised."

Japan may also double the budget for its tourism agency and boost overseas advertising to triple total visitor numbers to 25 million over the next decade.

China has become the fastest-growing source of visitors to Japan, with arrivals jumping 25 per cent in October, after the Japanese Government began issuing individual visas to mainland tourists earlier this year.

Greater proximity

However, according to Mehrotra, the UAE still maintains the added advantage of geographical proximity, among many other things. "The recession has seen short-haul travel take precedence over longer journeys and this trend rings true even with the Chinese. Plus, logistically, the flight connections between the two countries work in our favour," he said.

In 2004, Emirates airline opened its office in China, in line with the start of its flights to the country.

Three years later, the UAE and China signed a memorandum of understanding for Approved Destination Status, which was followed by DTCM opening representation offices in three Chinese cities in 2008, including Shanghai, Beijing and Guangzhou.

Currently, there are 44 weekly flights available between the two destinations.

"The Approved Destination Status has resulted in increased flight connections between the two countries, with Emirates opening an office in China, along with more accessibility to the mainland with direct travel to provinces such as Guangzhou," said Mehrotra. "Add to that are easier visa procedures and trade projects such as Dragon Mart, which makes wooing the Chinese all the more easier." (With agency inputs)


Inbound tourism

While China continues to show promise for outbound travel to the UAE in 2010, the lure of the Orient is not enough to attract travel from this region, said Manu Mehrotra, General Manager of Al Tayer Travel Agency.

"We have been closely working with the Chinese Tourism Board over the years, but the recession has slowed down what little leisure travel there was," he said. "However, business travel or Mice [Meetings, incentives, conferences and exhibitions] is still strong."

He added that the split between travellers to China is 80 per cent business with the remaining 20 per cent being leisure.

Even though leisure travel to China is increasing at the rate of two to four per cent annually, the country still does not emerge in the top five destinations for leisure travellers, who prefer more traditional destinations such as Switzerland and the United Kingdom, said Mehrotra.

"But give China a decade and this will certainly change," he said, adding: "To put things into perspective, currently, France rates the highest with inbound tourism standing at 70 million tourists annually, while China is nowhere near that estimate.

"However, by 2020 this figure should rise to 110 million tourists in France and at least 120 million tourists headed to China. That's how fast China's tourism growth is predicted to be," he said.

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