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Eastern Promise – Appealing to the Chinese market

19 November 2012
Eastern Promise – Appealing to the Chinese market

They're the highest-spending tourists in the world and half a million are looking to holiday here. Can you afford not to appeal to the Chinese market, asks Rosalind Mullen

It's a no-brainer. Communist China has opened its doors and a newly-rich tranche of its 1.3 billion population are booking their holidays abroad. According to VisitBritain, the average spend for a visitor from the world's second-largest economy is already about £1,700, which is three times more than the global average of £567. So, British hoteliers should be tripping over themselves to make sure this lucrative market heads to the UK.

Irritatingly, however, we aren't proving as attractive as the rest of Europe. Countries such as France are luring about eight times as many Chinese tourists, thanks mainly to their less onerous visa system, better air connections and lower air taxes (see opposite).

That said, there is evidence of growth here. In 2011, the UK attracted 150,000 Chinese visitors, up 35% on 2010. Looking ahead, London 2012 and the Diamond Jubilee will have helped bolster the Government's £8m cash injection to bring 500,000 Chinese visitors a year into the UK by 2015, a strategy that aims to boost spend by £569m and create 14,000 more jobs.

The push to win more Chinese visitors is being spearheaded by VisitBritain, which has an office in China and has been taking tourist and hotel operators, such as Calcot Manor and Hilton, on annual marketing forays (see page 31). "It's a big challenge as the Chinese market is developing in front of our eyes," says VisitBritain's head of tourism affairs, David Bishop.

The visa issue aside, several areas need to be addressed. For instance, although a number of hotels and restaurants now offer menus and welcome literature in Mandarin, the language barrier is a general issue. "We need to up our game," says Bishop. "London has only 13 Mandarin-speaking blue-badge guides."

Calcot Manor managing director Richard Ball agrees that language and cultural fear is a big issue for the Chinese. "We can gain advantage by demonstrating to the agents our commitment to the market by meeting these needs with a simple information file in Chinese on the website," he says.

Certainly, hotels that have introduced initiatives to make it easier for Chinese guests have seen significant revenue increases. Two luxury London properties, the Ritz and St James's Hotel & Club, have led the way in facilitating the use of China's national credit card, UnionPay, which is not compatible with Western Chip and PIN terminals. The Ritz, which accepted UnionPay last year, saw spend increase by 25% during 2011 as more Chinese guests, freed from paying by cash, upgraded to suites. It's looking at a double-digit increase in Chinese guest numbers this year.

At the St James's Hotel & Club, marketing manager Benedetta Fullin says: "It is easier for them to pay when they stay with us. Being only one of the few five-star establishments in London to offer this service allows us to be ahead of our competitors and gain some market share in the Asian market, and hopefully guests will come back in the future.

Active marketing has helped, too. Over the past two years, St James's managing director Henrik Muehle and director of sales and marketing Kate Dixon have held meetings with travel agents and PRs in Hong Kong, Beijing and Shanghai.

But, it's not just hotels in London that should be looking to woo this market. Chinese journalists covering the Olympics travelled as far as the Highlands, while groups can be found in the Lake District visiting the home of Beatrix Potter, or even, rather obscurely, Clark's shoe museum in Somerset.

Shopping is a passion, so Bicester Village in Oxfordshire and Gretna Green on the Scottish border are popular destinations outside the capital. And whereas years ago the average Chinese visitor arrived on a tour bus, those on second or third visits now have the confidence to go it alone.

Arguably, however, it is luxury hotels that are benefiting most from these visitors. Recent research by Wyndham Hotel Group reveals that 61% of Chinese travellers allocate extra spend to a hotel upgrade, almost half look for spa services and 24%, compared with 14% across other nations, prefer branded hotels.

Clearly, with the decrease in the US market over the past 10 years, the arrival of Chinese guests is well timed. But, as VisitBritain's Bishop points out, there are other emerging markets.

"Quite rightly, there is huge attention on China," he says. "But we should not ignore a market like India, which is three times the size and has more affinity with the UK. It's as important to make them and visitors from other emerging markets such as Brazil and Russia welcome, too."

The political headache

There are various statistics, but they all point to the same thing - fewer Chinese visitors come to the UK than the rest of Europe. According to the UN World Tourism Organisation's latest annual figures, 109,000 Chinese tourists visited Britain in 2010, compared with 907,000 visiting France and 511,000 heading to Germany.

Research by VisitBritain indicates that the 61% of Chinese people who don't come here are put off by the visa system. Having made it to Europe, many want to visit more than one country. However, because the UK does not recognise the Schengen visa - a one-stop system that allows access to 25 European countries, including France and Germany - travellers have to apply for a separate visa to come to the UK. Not only does this mean forking out £82 on top of the £47 for a Shengen visa, it's also time-consuming. A UK visa requires applicants to fill in lengthy forms and provide original supporting documents and biometric data in person.

Home secretary Theresa May has opposed adopting the Shengen visa for border security reasons. However, proposals presented to the UK Border Agency in early October suggest a compromise is in sight. Under the proposals, Chinese applicants could submit just one application and set of documents to obtain both visas - which would be approved separately. These proposals, however, are still under discussion.

VisitBritain's head of tourism affairs David Bishop is keen to send out a positive message. "It would be preferable in terms of cost and emissions if Chinese travellers could get here on a direct flight," he says. "But the fact is they can get here. There is no reason why, with our aviation capacity, we shouldn't reach the Government's target of half a million Chinese visitors by 2015."

How to take the initiative

  • Market your hotel by visiting PRs and travel agents in China
  • There are moves to streamline the visa application process. In the meantime, you can work with travel agents in China who provide their own visa application service
  • Make it easier for guests to pay by accepting UnionPay credit cards
  • Train staff to make small cultural gestures such as accepting a credit card using two hands
  • Language is an issue. Include website information and online booking pages in Chinese, employ a Chinese-speaking receptionist, translate menus, city maps and so on
  • The Chinese regard the food in the UK as poor and this is a strong disincentive to potential visitors. Try to adapt menus, adding items such as dim sum and soy milk to room service menus
  • Offer in-room comforts, such as Chinese films, Chinese teas, noodles and chopsticks, and slippers
  • To understand the culture, sign up to a rating system like www.feellikehome.cn, a Hong Kong company that provides guidance in creating the right environment for Chinese tourists
  • If you have flags outside your hotel, add a People's Republic of China flag
  • Offer group activities geared to Chinese tourists

Hilton aims to harness a 'once-in-a-generation opportunity'

The Hilton Huanying programme has proved itself as a simple but effective way to attract Chinese guests. Across the 70 participating hotels worldwide, there was 129% growth in room nights booked from China between January and July 2012 compared with the same period in 2011.

"Of all the company's brand awareness initiatives over the past 12 months, the Huanying programme has caught a wave,"
says Andrew Flack, vice-president of global brand marketing at flagship brand Hilton Hotels & Resorts. "It's a once-in-a-generation opportunity for the world travel industry,"

Hilton had a head start in understanding what comforts Chinese travellers need, having had a presence in China for 25 years, but it also carried out additional research using travel agent partners. The result pinpointed three areas:

  • Arrival - make sure there is at least one fluent Chinese speaker at reception and that all written welcome material is in Chinese
  • Guest room - provide familiar items, such as Chinese teas and slippers, and ensure there is at least one Chinese TV channel
  • Breakfast - using its chefs in Beijing to create an authentic menu of familiar dishes, such as two types of congee, fried dough fritters and dim sum

"The first priority is to communicate in their language so it is helpful to have a Chinese speaker on reception," says Flack.
Hilton Hotels & Resorts began work on the programme about two years ago in response to the rapid growth of outbound Chinese travel. It was piloted in Hilton Los Angeles, London Hilton on Park Lane and Millennium Seoul Hilton before being launched in August 2011 in 30 hotels. It's now in 70 hotels across Hilton Worldwide's 10 brands in 23 countries, including five in London and one in Cambridge.

"The critical mass is in London," explains Flack. "It's the gateway for first-time visitors, but they can get to Bath or York from there." The initiative is being evolved gently. This year, for instance, limited edition water dragon slippers were introduced and at Chinese New Year the participating hotels gave out traditional red envelopes. "Slippers may seem like a small thing, but they are seen as a sign of respect for their culture. In Asia, saving face is important to people," says Flack.

The potential is vast across the country
A VisitBritain trade foray to China last year convinced Richard Ball, managing director of Cotswolds country house hotel Calcot Manor, that the potential market from Chinese guests is vast - even outside London.

With outbound tourism growing by 25% last year and set to continue, he reckons the benefits from investing in this still immature market are likely to be medium- to long-term, with clear benefits to establishing an early presence.

"The market for a country house hotel, such as Calcot, is niche and is focused on the sophisticated, wealthy traveller who has already been to the UK several times and is seeking ever-more challenging destinations away from the tourist hubs of London, Bath, Chester and Edinburgh. This niche is, however, growing fast as the nation produces more and more wealthy people," says Ball.

He observes that there is also business to be had on the back of an increasing number of Chinese students who are being educated at British boarding schools and visited by parents.

"This will in time break down the language and cultural differences and increase the appetite for travel in the UK," says Ball. "In addition, Hong Kong has huge wealth that continues to grow rapidly. There are fewer cultural and language difficulties than in the other cities in China and it should be a key market for us."

But are the Chinese really ready for the Cotswolds? Ball reckons Calcot, and its sister property Barnsley House, are ideally located due to their proximity to both London and Bath, ease of access, and "Englishness". More specifically, the new-found wealth of many Chinese people is leading to an obsession with brands and shopping - and they flock to nearby Bicester Shopping Village, which even has Mandarin-speaking concierges.

"Barnsley House in particular is close to Bicester Shopping Village, which is probably more important [to our visitors] than Blenheim Palace," Ball says.

The trip with VisitBritain helped Ball establish contacts in China and he is updating them through email newsletters translated into Chinese. So far, he says this modest investment has resulted in a few isolated bookings, but he is also considering appointing a representative and using Chinese social media.

While recognising the potential of this market, as a country house hotel operator Ball is also cautious about diluting the experience for other tourists and predicts Chinese guests will only make up 5-10% of his guest profile.

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