Chinese Inbound Tourism Will Change Our World

When Haybina Hao, the National Tour Association’s director of international development, invited me to accompany a group of inbound China tour operators on a familiarization trip around New Orleans, I found it irresistible. It was the novelty that attracted me at first. It was something new. I had never experienced anything quite like that.

Now with a few weeks to absorb the experience, it’s still hard to get my mind around what I experienced and what I learned. But at this point I have reached an inescapable conclusion that the experience of a few days significantly altered my world view.

It awakened me to a phenomenon that is so huge it is going to change our world. Like most others, I can only speculate on how it will change our world, but the effect will be powerful, if for no other reason than the extraordinary numbers involved.

To try to imagine how this phenomenon is going to change things, I suggest trying to remember what the world was like before China opened its markets to the west. It may not show us exactly how things will change, but it can give us a clue to the magnitude of change. It’s going to be very big.

There is nothing in our experience to compare it to. There is no other inbound tourism market that can be spoken of in the same breath. Most of the nationalities that constitute inbound tourism markets in the U.S. have been coming here virtually forever. The number of visitors may vary up and down a bit from year to year based on various influences, but nothing earth shattering is going to take place in those mature markets.  

The Chinese inbound tourism market on the other hand is growing from virtually zero a few years ago to some unknown portion of China’s population of 1.4 billion people. That's 1,400,000,000.

We’re used to hearing numbers like that thrown around, but not used to fully comprehending their magnitude. Here are some numbers to think about. The U.S. was the largest economy in the world for decades until it was surpassed late last year by China.

According to the World Bank, China produced $17.6 trillion in goods in 2014 compared to $17.4 for the U.S. This is a big change and it’s been a long time coming. As recently as 2000 the U.S. produced three times as much as China.

We all know the story. Corporate America shifted production to low-wage areas, shipped manufacturing jobs to China and other low-wage areas and began the averaging of the American standard of living with that of people in developing countries.

As the American middle class has fallen through the cracks in large numbers, China has grown a strong middle class, and many of those Chinese are now ready to travel abroad.

This is actually great news for the American balance of trade. We may have lost our ability to compete in manufacturing because of labor costs, but we have not lost our capacity to compete as a tourism destination.

American culture, via our movies, our music, our styles and our technology, is a hot commodity worldwide. People around the world are hungry for American culture. It’s still something we can sell internationally. So inbound tourism is one export we can do nicely.

What we are seeing now with inbound Chinese tourism is a trickle in advance of a tsunami that is heading our way.

In 2006, the National Trade and Tourism Office estimated that there were 320,000 Chinese visitors to the U.S. By 2013 the number had more than quadrupled to 1.8 million. Impressive as that may be, that number is about a one tenth of 1 percent of the Chinese population of 1.4 billion.

The U.S. population is about 320 million. China’s population, if we can play around with numbers here, is about 1,400 million. That's more than four times as large. If China’s economy continues to grow, that one tenth of one percent of Chinese traveling to the U.S. will likely grow as well. Of course the new Chinese tourists have plenty of other places in the world to travel to besides the U.S. But if the number of Chinese visiting the U.S. grew to 1 percent of the Chinese population, that would be about a tenfold increase over what it is now.

Nobody has ever seen numbers like this in a tourism context.

There are other important factors to take into consideration in trying to get a bead on this trend.

The U.S. only got onto the list of countries that have Approved Destination Status by the Chinese government in 2008. That was the year that China began working with the National Tour Association to manage inbound tourism to the U.S. That was the beginning, when the floodgates opened to Chinese tourists.

In another development in late 2014, a change in trade policy between the U.S. and China extended the visa period for Chinese visiting the U.S. from one year to 10 years. This can have huge implications on the market. Now not only are the numbers of Chinese tourists growing, the numbers of times they can visit has opened up.

Before the extension of the visa, Chinese were coming in and trying to do the entire country in one trip. That required a very superficial look at only the top destinations, including New York, Washington D.C., Los Angeles, Las Vegas and a few other cities. Few other cities were likely to see many Chinese tourists. That has now changed in a big way.

Now Chinese tourists will be able to begin to satisfy their curiosity about the rest of America.

During my time with Chinese inbound tour operators, Harry Chen, CEO of San Francisco-based Joy Holiday, told me that the Chinese tourists he escorts in the U.S. are interested in all kinds of things we may not expect them to be interested in.

Chen recently hosted a group of Chinese teachers who were interested in ancient cultures and they wanted to meet with Native Americans. Chen introduced them to the president of the Navajo nation and they spent some time with a Navajo medicine man.

Chen found the Chinese visitors to be very interested in our environmental protection measures. What we are starting to see is that the Chinese will be interested in a lot more depth than just seeing the Statue of Liberty and the U.S. Capitol.

They were interested in how Americans live, in our social lives, our workplaces, our politics. They were interested in the native population, our history.

Before traveling with the Chinese inbound tour operators I had not thought extensively about the phenomenon. I knew the background and had some inkling of the numbers, but I had not yet had the tangible experience of seeing how the phenomenon of Chinese inbound tourism will play out in the States.

I got a taste of it during those few days. I had many conversations with the tour operators. I experienced some of the attractions of New Orleans with them. And it greatly opened my mind as to the possibilities.

After I left New Orleans I traveled to Kansas to take care of some family business, and on that trip I realized that after that trip I would never see things the same again. I had never thought of Kansas as able to compete as a tourism destination with everything else in the U.S., including the first-tier destinations mentioned above as well as myriad second-tier tourism destinations scattered around the country, such as the Grand Canyon, Niagara Falls, Mount Rushmore, etc. ad infinitum.

But after being exposed to the interests of the Chinese tourists, I saw Kansas through different eyes and I realized that its history, its landscape and its culture have much richness that might well be of interest to a visitor from far away. More than ever before I can now see the U.S. as an exotic destination, as it would be to someone from China.

The experience helped me see how the tourism industry might cater toward that market. Kansas tourism should be marketing its Civil War prelude history, its Wild West legends like Wyatt Earp, its Native American history, its frontier history, its history as part of the Spanish empire, the stories of Count Basie, Charlie Parker and Joe Turner in Kansas City.

But the most urgent message to draw from this is that this is happening right now, and it’s going to overtake us very quickly. The big hotel companies have been mobilizing in preparation for 20 years. They understand how much this will mean to them. They have been adapting their offerings, hiring Chinese-language ambassadors.

They’ve looked at the numbers and know the phenomenon will be huge. For most of us it will come out of nowhere like a speeding meteor that emerges from the vanishing point of the horizon to suddenly appear right upon us.

I think it will be great for America, not only economically, but in terms of cultural exchange.

Get ready!

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