When you hear all the lodging industry projections for the months and years to come, much of the robust growth is forecast to be the result of the expected influx of travelers from China. In what could only be seen as good news for the industry, that expectation moved a little closer to reality when President Obama signed a visa waiver extension for Chinese travelers earlier this month.
Previously, visas were only good for one year, but now they will be valid for 10 years for business and leisure travelers. The untenable visa process has historically been a hurdle in getting people to come visit this country, so the easier we make it for them the better.
In 2012, Chinese travelers spent a staggering $102 billion globally, and year-over-year growth for that number has been roughly 20%. Of that $102 billion, some $14 billion-$15 billion was spent within the U.S., and hotels received roughly $4 billion.
During the recent IHMRS, Evan Saunders, CEO and co-founder of Attract China—whose mission is to help businesses across America attract Chinese travelers—framed the potential impact of this market and detailed what drives their decision making. He also commented specifically on the aforementioned visa change, which was announced just prior to his presentation. “This will make it really easy for repeat visitors,” he said.
But while such legislation will certainly help, hotels here are ultimately going to have to earn that repeat business, and the reality is Chinese travelers’ expectations are vastly different than those of U.S. guests.
According to Saunders, the most important factors for Chinese when choosing a hotel include brand recognition, location, transportation and service. The interesting thing about the list is price was one of the least important factors, which is in stark contrast to what we’ve seen from guests here. Generally speaking, these visitors are willing to spend for the right experience. For an industry where rate is always an issue, that’s nice to know. Another major difference is that view is not particularly important as the Chinese generally spend little time in the room.
Saunders noted these travelers place a high priority on free WiFi, and like to have tea kettles and slippers in their rooms. Toothpaste and toothbrushes are also expectations, and there is a greater need for smoking rooms as that’s a huge part of Chinese culture. Furthermore, social media sites that are popular in the U.S.—such as Facebook, Twitter and YouTube—are not used as means of communication in China.
During the discussion, Saunders wondered aloud, “Why doesn’t everyone have a Chinese business strategy?” So I’ll turn that question to you. At the end of the day, it has to be about more than tea kettles and toothbrushes. For one thing, you need to have a strategy on how to market to these travelers. For example, 70% of the country’s outbound travel is independent, as opposed to being through group tours. And, while they may not use the social media sites we are accustomed to, they are online a lot. In fact, roughly 70% find their hotels through the Internet.
So what does this all mean for U.S. hoteliers? In a nutshell, in order to get your fair share, you will have to figure out how to market to and accommodate Chinese guests, while not alienating your core business. This is by no means an easy proposition, and maybe it’s not an issue for your property today. However, there’s little doubt it will be tomorrow.
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