World Travel

Can Sacramento cash in on an influx of Chinese tourism dollars?

Back Longreads Jun 1, 2014 By Jeff Wilser

Two hundred million Chinese tourists will pack their bags and depart their homeland in 2020, bound for destinations across the globe. It’s not a mass exodus; they’re not  fleeing their government. They’re tourists, and, according to CNN, they might be the greatest phenomenon to hit the  global travel industry since the invention of commercial flight.

More than a million Chinese tourists are expected to visit the Golden State this year, up an eye-popping 639 percent since 2000. That’s nearly one tourist for every 34 Californians. But what does this influx mean to Sacramento? Five years ago, maybe nothing. Five years from now … maybe everything.

Believe the Hype

Despite nearly six years of global economic catastrophe and malaise layered over a host of domestic complications, China is growing. Even a bad quarter for China’s GDP — 7.4 percent growth in Q1 of 2014 — is the envy of the globe. Meanwhile, the Chinese government has begun spending more on health care and pensions, which some experts think may discourage households from saving for such things. Higher interest rates may, paradoxically, discourage thrift if people reach their savings goals faster. The Chinese government has also made it easier for its citizens to get visas.

So with a burgeoning middle class hungry for iPhones, BMWs and fine wine, tourism is the next logical step. And there is, quite literally, no precedent for a hospitality shift of this magnitude. “It’s one of those once-in-a-lifetime trends,” says Caroline Beteta, president and CEO of Visit California. “It’s just astounding. It’s unheard of. And it hasn’t really even begun to level out.”

Chinese visitors aren’t just arriving in larger numbers and more frequently; they’re staying longer and spending more, too. Between now and 2020, spending by Chinese tourists is expected to triple, according to Asian brokerage firm CLSA. When they visit California, Chinese travelers stay for nearly 14 nights, up from about 11  in 2011. During that time, they spend an average of $3,000, making the Chinese our highest-spending visitors. And it’s not just here. According to Global Refund, a company specializing in tax-free shopping for tourists, the Chinese account for 15 percent of all luxury items purchased in France but less than 2 percent of its visitors.

“China is our state’s fastest growing and most lucrative inbound tourism market,” wrote Susanne Stirling, vice president of international affairs for the California Chamber of Commerce, in a rally-the-troops op-ed. “Over half a million Chinese visitors [are] visiting our cities and national parks and shopping destinations — and spending money as they go. That’s significant when you consider that Chinese visitors alone inject $1.5 billion per year into the  California economy.”

But the fruits of this influx aren’t going to plop into Sacramento’s lap. The city needs to pitch. In the same way that Apple needs to market the iPhone, Sacramento needs to aggressively sell its brand — and we’ve got competition. “Chinese tourists are the future for Bali,” writes The  Financial Times. Other headlines include, “Kenya records increases in Chinese tourists,” “Australia chases China tourism dollar,” and “Egypt eyes more Chinese tourists.”

“[Selling] California as a product is a priority and an important new way of thinking,” says Stirling. “The California product as experienced by more than 14.5 million international travelers each year ranks among the state’s top exports, thus generating more revenue from international travelers than the combined value of the state’s top four product exports.”

The seeds were planted years ago.  Visitcalifornia.com, the official consumer website of the state of California, kicked off its marketing campaign in 2008, working to peddle the  Golden State to Chinese press and  travel firms. They opened offices in Beijing. They slapped ads on billboards. They worked with Gov. Jerry Brown to send 90 business leaders on a 5-city tour of China, literally wining and dining the industry. In 2013, Visit California invested a total of $1.6 million, estimating that for every $1 spent on marketing, $335  returns to the state’s economy.

Happily, California is an easy sell. “[Chinese tourists’] desire for vacation experiences is about a cultural alignment of freedom. The freedom to dream … and that’s well-positioned with California,” says Beteta. That ethos is embodied by “Dream Big,” Visit California’s overarching campaign that touts iconic California images like beaches, the Hollywood sign and the Golden Gate Bridge.

But how do you reach the end consumer? How do you cut through the language and cultural barriers? How do we convince our Beijing counterparts to visit the West Coast over the East Coast?

Enter Visit California’s secret weapon: Ms. Gao Yuanyuan. A model and actress who stars in Chinese rom-coms like “Romancing in Thin Air” and “Don’t Go Breaking My Heart,” Gao has been tapped as a celebrity tourism ambassador, literally translating Dream Big into a language her viewers can understand. Commercials show Gao doing things like gazing at the Redwood forests, sipping wine in Napa and basking on sun-splashed beaches. Who wouldn’t want to come here?

No marketing campaign in 2014 would be complete without, of course, a heavy dose of social media, so Gao has a mix of online quizzes, videos and digital content on her Weibo site (China’s version of Facebook), where she has 20 million followers. Using Gao as an appealing saleswoman, Visit California customized packages like “Mega Happy New Year in California,” encouraging trips during the Lunar New Year. That campaign alone booked 2,300 tours.

If half the battle is telling China about California, the other half is telling California about China. The Sacramento CVB has held seminars throughout the state with a goal of making business “China Ready,” says Beteta. The workshops provide insights into the latest trends in Chinese travel, including  the fact that 60 percent of Chineseoutbound tourists prefer to travel  independently, that they tend to book hotels by brand name first and location second, and that theme tours, such as those focused on golf and wine, are increasing in scope. So, a Chinese-language Farm-to-Fork tour? It’s less a question of if, than when.

But … Sacramento?

Yes, 200 million is a splashy number. Yes, hordes of tourists will flock to Universal Studios and Alcatraz. But is there really opportunity for the  Capital Region?

Yes and no. “The healthy lifestyle is something very interesting to  Chinese tourists. People just want to get closer to the food source, and that, in and of itself, is an attraction,” says Beteta. So in one sense, the interests of Chinese tourists dovetail nicely with the city dubbing itself the Farm-to-Fork  Capital of America.

Realistically though, at this early stage, Sacramento just isn’t top of mind.

“Sacramento itself is not doing anything specific to encourage Chinese tourism,” says Dr. Sonney Chong, chair of the Council of Asian Pacific Islanders Together for Advocacy and Leadership.

“There’s no money, it’s not in the budget and [Sacramento officials aren’t] aware of the potential of Chinese tourism. Sacramento is still coming out of recession and isn’t ready to promote growth in tourist direction from any countries,” she adds. “Truthfully, San Francisco is more attractive to China than Sacramento.”

Ouch. That shadow, as always, looms large. The “Top 10 Motivating California Features,” according to Visit California’s market research, kicks off with Disneyland at No. 1, followed by Hollywood, Universal Studios, Los Angeles, beaches, Sea World, the Golden Gate Bridge, the redwood forests, San Francisco and Highway 1. The capital city hasn’t cracked the Top 10.

Sonya Bradley, chief marketing officer for the Sacramento Convention & Visitor’s Bureau, is quick to admit she’s not focused on China. “Our outreach to them is very minimal. What we’ve found is that the Chinese are still going to the major tourist cities — San Francisco, Los Angeles, San Diego.

They really love shopping, amusement parks, national parks. That’s what they’ve heard about, and that’s what they learn to do.”

But this could soon be changing. “According to feedback from interviews with international hotel brands, major cities and attractions are still key pulls for Chinese tourists, but they are actively seeking new destinations,” advises the China Ready report. Another encouraging sign: 69 percent of Chinese tourists say they would like to visit the Central Valley — that’s ahead of San Diego and only slightly below the 70 percent for Los Angeles. While Sacramento might not yet be a draw for travelers across the planet, it’s realistic to hope that if they’re here for two weeks, the Capital Region could nab a 1- or 2-day side trip.

It’s also possible that a wildcard could tip the scales: Vivek Ranadivé, the new majority owner of the Sacramento Kings. The Kings play two games in China next season, hinting at Ranadivé’s interest in expanding the brand into Asia.

“If the Kings become very popular there, this could most certainly help to shorten the curve into bringing more Chinese tourists to Sacramento,” Bradley says. And what if they could land a player like Jeremy Lin, who happens to have just one more year on his contract with the Houston Rockets? Should the Kings recruit a Chinese player, Bradley says, “That will definitely give the city an upper hand in terms of  elevated presence.”

Some Sacramento hotels are already making the pivot to Asia. The Hyatt Regency Sacramento, for example, has a bilingual staff that can speak in various Chinese dialects, offers a customized version of its website and, because the number four is considered unlucky, they avoid booking Chinese guests on the 4th floor. When Chinese groups visit the Sacramento Residence Inn, they’re treated to an arrival tea, breakfasts that include familiar fare like soy milk and porridge, and a welcome letter written in Chinese.

Still, no one is arguing that Sacramento is the first destination the Chinese should consider. It’s not realistic and it’s not necessary. The Sacramento CVB found that for other countries with a large number of America-bound tourists, such as Australia and Germany (Sacramento’s top two sources of international visitors, excluding  Canada and Mexico), once travelers have  visited the obvious destinations, many  crave a more authentic experience.

Just as a frequent traveler to  Paris would roll their eyes at a selfie by  the Eiffel tower, once the Chinese tourist  market is more mature, they’ll have a greater appetite for Sacramento. This is how Bradley positions the city to other markets: “We   talk  about the ‘true California’  experience,” she says. “Not Disneyland, not     San     Francisco.”                                   



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