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Homechevron_rightBusinesschevron_rightUS travel industry to...

US travel industry to Chinese tourists: What trade war?


Representational image only


Washington:  Washington, D.C. has dangled hotel discounts tied to the Chinese Lunar New Year.

Arizona has promoted its outdoor attractions to draw visitors during another popular Chinese holiday.

San Francisco has expanded its social media presence on Chinese apps to market year-round travel to millennial tourists.

Across the country, the US tourism industry is trying to counter one of the casualties of the trade war with China that is still raging despite this month's temporary truce: A drop in the flow of affluent Chinese visitors to the US.

As the conflict has dragged on for 15 months with no meaningful breakthrough, the travel industry is trying to minimise the damage.

It has good reason. An enlarged Chinese middle class has become a lucrative market for the US travel industry.

Close to 3 million Chinese tourists visited the US last year. And they spent liberally: An estimated average of USD 6,700 per person per trip exceeding the average spending of international tourists by more than 50 per cent according to the US Travel Association.

Concerns among US tourism agencies have grown as Beijing has warned that Chinese travelers to the United States may face harassment.

Compounding the problem is increased difficulty in obtaining US visas.

The number of visitors from China dropped nearly 4 per cent in the first half of this year after a nearly 6 per cent drop in 2018.

More broadly, the US share of the global travel market has slipped in the past year, and travel and hospitality groups blame the trade conflicts and intensified competition from rival countries.

To close the gap, they've urged the government to extend funding for the US national tourism marketing agency and to work more closely with overseas trade fairs and tour groups.

At the same time, tourism marketing agencies for states and cities are hedging their bets by intensifying their outreach to countries other than China.

Utah and Los Angeles, among others, are trying to expand their presence in nations like India, whose large and youthful middle class is seen as a potentially rich source of tourist dollars.

Yet there is no easy way to replace a drop in Chinese tourism.

Some US tourism agencies say they worry that Chinese travelers feel unwelcome in the country under the Trump administration.

Warnings from Beijing about traveling to the US have likely reinforced that view.

"With the trade war, with some of the travel warnings, with some of our visa challenges that we've had, we've seen a little bit of a dip in Chinese visitors," said Theresa Belpulsi, a senior official at Destination DC, the city's tourism marketing office.

Tourism is one of the few industries where the US has enjoyed a substantial advantage over China.

In 2018, Chinese tourists traveling to the US spent USD 30 billion more than American tourists visiting China did. Yet that edge may be shrinking.

"The US is just losing market share," said Adam Sacks, president of consulting company Tourism Economics.

"Something's made the US uncompetitive, and I would target the trade war as one of the reasons." Larry Yu, a professor of hospitality management at George Washington University, warns that once impressions of an unwelcome environment take hold, they're hard to erase.

"The trade war creates a kind of environment in China that makes people think twice," Yu said.

"Even though we know that Chinese demand is high, the current environment makes people substitute the US for another place." Beijing has issued two warnings to would-be visitors to the United States - one about gun violence, the other about harassment by US law enforcement.

Visa approvals for Chinese visitors have meanwhile become more difficult.

The rejection rate for Chinese tourist visa applications to the US reached 17 per cent in the 2018 fiscal year from a low of 8.5 per cent in 2013.

Some tourism companies are feeling squeezed. DFS Hawaii, which operates duty-free stores in Hawaiian airports, plans to shed a quarter of its workforce and has pointed to a drop-off in tourists from China and elsewhere in Asia as a reason.

As of August, Chinese tourist visits to Hawaii are down 27 per cent this year.

"There is no foreseeable indication this will be reversed in the near term," said Tim DeLessio of the DFS Group, parent company of DFS Hawaii.

Sacks of Tourism Economics says he holds out hope that local travel marketing agencies can reverse the trend.

The District of Columbia, for one, says its outreach to China has intensified.

Destination DC's latest initiative - hotel discounts for the Lunar New Year early in 2020, with events and performances tailored for Chinese tourists - builds on a sister-city partnership with Beijing.

San Francisco's social media expansion to three new Chinese apps marks its latest effort to draw more Chinese tourists.

Ads the city created and hosted on two popular Chinese apps, WeChat and Weibo, drove 12 million people to a contest promoting the city's landmarks, according to the San Francisco Travel Association.

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