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 future. 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.