If there was just one thing the world's two largest economies could agree on both wanting, tourism would be it. China and the United States announced this week in Beijing that 2016 will be the year of mutual tourism promotion, one of the outcomes of President Xi Jinping's visit to the United States last year.
The focus on tourism between the two countries come as overseas travel booms in China, in fact more Chinese vacation abroad than any other nation. More than 120 million Chinese traveled abroad last year, up 12 percent year on year, and they spent 104.5 U.S. billion dollars, up 16.7 percent over the same period.
"The scale and the speed with which the market [has] grow[n] is quite remarkable," said Fred Dixon, CEO of NYC & Co., the agency responsible for promoting New York City, the top U.S. destination city for Chinese travelers.
Despite New York being the top destination less than 3 percent of Chinese outbound tourists go to the United States. The Republic of Korea, Japan and Thailand are much more popular choices, partly because of their proximity. Despite this, Chinese visitors to the United States has been growing at a double digit rate over the past few years. In 2015, 2.67 million Chinese visited the United States, compared with less than 400,000 in 2007.
Goldman Sachs estimates that the number of Chinese visitors will almost double to 5 million by 2025. This growth prospect has excited tourism players across the States. Many have sent delegations to China and the news about the tourism exchange will no doubt see them double down their promotional efforts. Dixon said his organization's budget for promoting New York in China has risen in recent years, and is outpacing growth of marketing expenditure for other destinations.
Travel agencies and tourism promoters say a more powerful boost to Chinese tourists inflow to the U.S. is visa relaxation. In November 2014, the two countries extended visa validity for tourists from one to 10 years.
This policy has pushed up the share of Chinese travelling to the United States purely for leisure. Data compiled by various popular destination cities in the United States show that for Chinese visitors, leisure travelers have begun to outnumber business travelers in many places.
"The 10 year visa extension is really a game changer," Dixon said, adding that the relaxation has paved the way for more Chinese to visit the United States for pure leisure and on their own, instead of on business trips or organized group tours.
Chinese online travel service provider Ctrip also reported a surge in U.S. visa application through its platform between January to August last year following the visa relaxation. With more tourists heading to American shores on their own, tourism promoters say they are reviewing their messages here in China. While travel agencies are still valuable partners, they have begun to engage with prospective travellers directly.
"In the very beginning our work was very much about working closely with the trade [travel agencies] on the group side, but now we are seeing a move toward independent travel," Dixon said. That shift led promoters to prioritize their online presence, as websites, social media and apps have become prime channels for information and planning.
More than 259 million Chinese booked their travel online last year, of which 80 percent did so on their mobile devices, according to China Internet Network Information Center. The demographics are changing too. China's outbound travel boom is fueled mostly by a new generation of travelers. 67 percent of China's overseas tourists in 2014 were born after 1980s, data compiled by Goldman Sachs show.
All these changes impact travel decisions. Promoters say group travelers want to see iconic sites and things they have seen on TV and in the movies. But reaching out to the new generation of savvy Chinese outbound travelers takes more than that.
The appeal for them, Dixon said, lies beneath the surface, in lesser known communities, parks and museums that add more personal character to their travel experience. "This is an exciting time," he said. "You don't often see a market emerge the way China has. And we probably won't see anything like this again."
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