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Soaring Chinese tourism means big money for U.S. cities

Visitors from China spent $33 billion in the U.S. in 2016, a figure sure to rise

The Hollywood Walk of Fame. Famous LA destinations have seen a sharp rise in Chinese tourism over the last decade.

There’s a Chinese proverb that says “traveling thousands of miles is better than reading thousands of books.” In the United States, as China’s long economic boom gives more and more tourists the ability to travel overseas, that sentiment is making a huge financial impact on cities.

“Chinese tourism is a big deal for Los Angeles,” says Kathy Smits, the vice president of international tourism for the city’s tourism marketing agency. “China is driving more than one billion dollars into the city’s economy annually.”

And that’s just one city’s experience with a boom that’s bringing new revenue, and challenges, to city tourism officials.

Los Angeles’s journey mirrors the country’s experience as a whole. When the city opened its first office in Beijing in 2006, China wasn’t even a top 10 country of origin for LA visitors.

But over the last decade, travel has exploded 650 percent. Now, China is number two behind Mexico, sending 1.1 million travelers last year, who spent $1.6 billion on restaurants, hotels, retail, and entertainment (23 percent of all international spending in the city).

Los Angeles Tourism & Convention Board
Los Angeles Tourism & Convention Board

Chinese tourism has become a windfall for the United States, which has seen a 13-year-long growth streak. According to a U.S. Commerce Department report, 2.97 million Chinese nationals visited the United States in 2016, spending $33 billion dollars, part of a boom year that saw visitors grow by 15 percent and total spending rise 9 percent.

Cities are racing to adapt to and attract Chinese visitors, who spend an average of $7,200 per person, according to the U.S. Travel Association. New York City is expecting to welcome 1 million Chinese visitors this year, and numerous attractions are adapting to this surge of visitors (Caesars Palace Casino in Las Vegas just set up WeChat pay, a popular Chinese mobile payment system similar to Apple Pay).

Flights from second-tier cities have begun to bring in new waves of visitors—LA alone welcomes 91 weekly nonstop flights—and U.S. National Parks have seen a surge in visits, 1.2 million total in 2016.

Experts believe this is just the beginning. Just 5 percent of Chinese citizens hold passports, and the country’s largest online travel service, Ctrip, predicts that number will double by 2020, a potential audience of 240 million.

That makes it all the more imperative that cities prepare for and promote themselves to the growing number of Chinese visitors. Los Angeles has become a model thanks to both its location and foresight. It’s a member of what Smits calls the “Golden Triangle” of cities, which includes Las Vegas and San Francisco, that have become attractions for this growing market.

Los Angeles has also benefited from a changing landscape: a rising number of flights to LAX coming from smaller Chinese cities, the introduction of a 10-year tourist visa that makes multiple U.S. visits easier for Chinese citizens, as well as the country’s increased wealth.

“Chinese luxury consumers spend more outside of China than inside,” says Renee Hartman, a co-founder of China Luxury Advisors, a consultancy that’s helped governments and institutions attract Chinese tourists. “They’re the largest spenders in the world.”

Officials at the opening of the LA Tourism office in Guangzhou, China
Los Angeles Tourism & Convention Board

Los Angeles also has many advantages on other cities and destinations: a large Chinese-American population, close proximity to China, great weather, and the entertainment world.

According to Gary Soloff, who helps run studio tours at Warner Brothers, Chinese visitors are a huge opportunity (The Big Bang Theory is very popular overseas). The studio has been working with LA Tourism for years, and have plans in the works to do even more to attract this crowd, including hiring more Mandarin-speaking guides and translating their website.

The LA Tourism office, and city at large, have also invested heavily in courting the Chinese market. LA has opened a handful of offices across China, and spends money marketing to Chinese social media platforms and search engines such as Weibo, WeChat, and Baidu.

Tour operators and venues in LA have also been more than receptive to the rise in Chinese visitors, and the city tourism bureau’s China-Ready program, which helps educate operators, provide language and cultural assistance, and give marketing advice. Recently, the city started focusing on what’s called the MICE market (meetings, incentives, conferences, and exhibitions).

Programs such as China Ready have made big difference for local tourism destinations, museums, and theme parks. Universal Studios now offers a park tour in Mandarin, and many restaurants and hotels now have Mandarin-speaking staff set up to assist guests.

According to Ron Hartwig, Vice President of Communications for the J. Paul Getty Trust, which runs the Getty Center and Museum, the bump in Chinese visitors has had a big impact over the last four years.

The institution has focused on catering to this crowd, offering basic Mandarin training to docents and security, providing Chinese audio guides and maps, and promoting the Getty on Weibo and WeChat. When the museum recently exhibited full-size cave replicas from the Mogao Grottoes near Dunhuang, China, it was a big draw.

Screen capture from the Chinese-language website for LA Tourism
Los Angeles Tourism & Convention Board

Hartwig has also seen the ways that tourism from China has rapidly evolved, challenging those already catering to this audience to evolve with them.

“When this momentum really picked up three or four years ago, we noticed a lot of Chinese tourists came in groups and hired tour agencies,” he says. “Now, there are more and more individual Chinese travelers who are shaping their own visits.”

Hartman says the market is poised for continued growth, despite the overall drop in international tourism that has hit the country during the Trump era. And it’s not just about tourism: Chinese visits also lead to real estate and business investment, and many parents make multiple trips to see their children, who are studying in American schools. As Chinese tourists become a larger portion of travelers coming to U.S. cities, those that adapt, promote language training, and aggressively market overseas stand to benefit.

But much like China, the market isn’t standing still, says Smits. Other countries, especially Australia, Canada, Japan, and South Korea, are aggressively courting visitors. That means staying ahead of the curve, and giving repeat visitors a reason to come back.

“As the Chinese traveler becomes more sophisticated, one of our biggest challenges is making sure we hold onto our market share,” she says. “We need to stay ahead.”