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					                 Chinese Tourists to North America
As reported in our last newsletter: BEIJING, June 17 -- The first organized group travel
to the United States started Tuesday from Beijing, Shanghai and Guangdong.

Consisted of 250 tourists, the first group marked the beginning of Approved Destination
Status (ADS) group to U.S.

On Dec 11 2007, Chinese and US tourism and authorities signed a memorandum of
understanding (MOU), which allows Chinese to travel to the US in tourist group. The
Chinese government granted ADS to the U.S. on May 15.

U.S. Department of Commerce statistics show a steady increase in visitors from China to
the United States, doubling over the past ten years to 397,000. The Commerce has
estimated that the number of Chinese tourists could reach 579,000 by 2011.

Who will be the target group travelling to North America?
Due to the flying distance and country size, the tour to North America often takes 10 -16
days. However in China, most young people won’t be able to take a vacation more than 7
days, this means senior citizens will make up a big portion of the group.

In this first group to the US: the average age of 39 people from Shanghai CTS (China
Travel Services), is 55. Among 24 tourists from Beijing CYTS (China Youth Travel
Services), 15 persons are at retirement. And 70% of the 40-person group from Beijing
organized by Kanghui, were senior citizens.

Travel agencies charge over 20,000 RMB per person for a standard tour to North
America. The tourists also need to pay 100,000 to 200,000 RMB deposit to guarantee
they would not overstay in the U.S. The vast majority that can afford to cross the Pacific
Ocean are likely to be from the country’s rising middle class, among the most
sophisticated and wealthiest in China today.

How much money will they spend?
Chinese tourists are notorious for being frugal when it comes to hotels and food so that
they can spend more on shopping. NYC & Co., the city's tourism and marketing bureau,
says Chinese travelers on average spent $2,204 per visit in New York in 2007. On
average, Chinese citizens spend more during their stay than visitors from other countries.
Last year, total Chinese spending in the United States exceeded $2.5 billion.

No statistics show how much money the group in June have spent in US, but media
reports indicate the 39 tourists from Shanghai easily spent $8,000 in one hour in the
Apple store. And a 3- hour stop at Cabazon Outlets & Desert Hills Premium Outlets in
L.A. was being considered too short.
What are their favourite goods when shopping in the U.S.? Designer goods, cosmetics,
jewellery and the latest electronics. This should also apply to the tourists to Canada in the

Due to the import tax, brand names in China are usually at a very high price. Cosmetics
especially North American brands such as Clinique, Estee Lauder, Elizabeth Arden, the
price in U.S. and Canada is at least 1/3 cheaper than mainland China. Clothes like Gap,
CK, Ralph Lauren, Levis, is even 50% lower. Health food, such as fish oil, multi-
vitamins, and North America ginseng are also on Chinese tourist’s must-buy list because
of the quality and reasonable price. Of course, ice wine, smoked Salmon and maple
syrup will definitely become popular “Canadian souvenirs”.

However, in terms of the price, Canada lacks the advantage to compete with U.S. The
visitors to U.S. only need to pay state tax, which is varied from 0% - 10%. In Canada,
except for Alberta, the tax (PST + GST) is from 12% -14%. And starting from April 1,
2007, non-resident consumers who purchase goods in Canada and remove them from the
country cannot receive a VRP (Visitor Rebate Program) rebate for the GST/HST they
paid on goods. The strong Canadian dollar is also hurting Canada’s competitiveness in
tourism industry.

China UnionPay: The other option other than cash
Founded in March 2002, China UnionPay (CUP) is an association for China's banking
card industry. since 2006, China UnionPay cards can be used in over twenty further
countries outside China, including the United States, Japan, Singapore, Malaysia,
Thailand, Germany, Switzerland, France, Australia and New Zealand.

CUP has established the acceptance of CUP cards in U.S. since December, 2005 by
partnering with Discover Financial Services. The signing of ADS with U.S paved the
way for CUP’s use in the country. At present, for debit cards, both merchant shopping
and ATM services are available. For credit cards, only ATM services are available.
Merchants that accept CUP cards are located in all major, and more widely spread in
places frequently visited by Chinese tourists, like Los Angles, New York, San Francisco,
Las Vegas, Hawaii, Washington and Huston. Also cardholders can use CUP debit card to
withdraw money from PULSE network ATM throughout U.S.

China is still a cash country. Chinese tourists are often the victims of the robbery and
theft when travelling abroad because they are known as cash carriers. Many Chinese,
especially senior citizens don’t have a credit card. However almost everyone has a debit
card. The acceptance of CUP in the US provides the possibility for Chinese tourists to
shop happily but without bringing too much cash.

CUP is interested in getting into the Canadian market, however hasn’t had the access to
the market.
Canada needs to make a greater effort
US tourism industry should thank Hollywood or maybe the pirates in China. If you ask,
without much effort, Chinese can tell you at least 2 or 3 names: Statue of Liberty,
Hollywood, Golden Gate Bridge, Las Vegas, Disney World…All those icons have
repeatedly appeared in films, audios and videos. Chinese tourists have long cited the
United States as a top destination for travel for years.

On the other hand, if you ask people about any famous tourist attraction in Canada, they
would stumble. In general Canada has a very vague image in Chinese’ mind. Someone
admitted that when they think about Canada, they could only think about two things:
maple leaf and Dr. Norman Bethune.

Due to the large population of overseas Chinese in BC and Ontario, it would be easier for
these provinces to promote tourism in China. The above two can also benefit from the
opening of U.S. tourism market. At present, 10-16 days US + Canada tour came available
on the market, all cover BC and/or Ontario. But none include Alberta. Alberta needs to
make more efforts to compete with others.

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