This is a re-posted opinion piece.
Carlos Chan, the low key Chinoy taipan who successfully built a business manufacturing and selling snacks in China, thinks the next big money is to be made not in China but right here in the Philippines, on outbound Chinese tourism. Alfredo Yao, the fruit juice entrepreneur who branched out to the airline industry, Zest Air, is also bullish on bringing Chinese tourists to the Philippines.
What they have both told me about the potentials of the Chinese tourism market has been confirmed by a recent article in The Economist entitled “A billion pairs of itchy feet”. “They are in Paris, buying Chanel shoes. They are in London, scouting Mayfair property. They are in Rome, ordering dim sum instead of pasta. Chinese tourists seem to be everywhere, yet the Chinese tourist boom is only just beginning.”
The China Tourism Academy estimates there were as many as 54 million Chinese tourists who went abroad last year, up from 47 million in 2009. Jiang Yiyi, director of the academy’s international tourism development institute, told China Daily that the outbound travel market for the Chinese mainland would remain brisk this year, continuing to contribute to the recovery of the world economy and helping to offset China’s trade surplus.
According to the United Nations World Tourism Organization, China will be the world’s fourth-largest source of outbound tourists by 2020, with 100 million overseas visits. A report by AC Nielsen showed that Asian countries were the top choice for Chinese tourists with more than 60 percent of respondents favoring the region.
Statistics from travel search engine Qunar.com indicate the top destinations for travelers departing from Beijing were Hong Kong, Tokyo, Seoul, Singapore, Bangkok, New York, Paris, Kuala Lumpur, London and Sydney. Thailand has long been a popular destination for Chinese tourists. The Tourism Authority of Thailand (TAT) says China will become the biggest source of foreign tourists in Thailand in two to three years.
Apparently, we have been left out again, as usual, even as Singapore, Kuala Lumpur and Bangkok, fellow Asean cities, are starting to get significant numbers of Chinese tourists. What have they got that we don’t have? Tourism Secretary Mon Jimenez must answer that for him to do his work right.
Indeed, a cursory Google search reveals that we are late to take advantage of the potential of the China tourism market. Many countries have taken steps to lure more free-spending Chinese tourists. The India tourism industry, according to one report in China Daily, has launched its “Incredible India” campaign with dances and cultural events all over China.
Actually, the first Tourism Secretary who talked to me about China as the market we should tap was Obet Pagdanganan. A former top executive of Unilever Philippines, Obet has the Unilever marketing discipline ingrained in him and he did see the China potential. But unfortunately, Obet didn’t stay long at the tourism department. His successor, Ace Durano, was more interested in promoting himself rather than the country. And Durano’s successor, Bertie Lim was too afraid to do anything different. His first foreign foray was to the US, the balikbayan market at a time when US Pinoys are as caught up with the economic crisis as the rest of America.
According to Chinese news agency Xinhua, China Tourism Academy estimates Chinese travelers will spend a record high of $55 billion on their overseas trips this year, boosted partly by an appreciating Chinese currency. According to The Economist, the Boston Consulting Group (BCG) estimates the Chinese often spend as much as eight percent of their annual discretionary income on a single trip, far more than people in other emerging markets. And the market is growing fast. BCG expects the number of Chinese who have ever rented a hotel room to triple in the next decade.
No wonder Mr. Chan is excited by the prospects of bringing Chinese tourists to the Philippines. And he is acting on his hunch by teaming up with Jin Jiang, a leading tourism conglomerate in China. With headquarters in Shanghai, Jin Jiang owns or manages more than 460 hotels and Inns with nearly 80,000 rooms/suites and is ranked 17th among the world’s top 300 hotel companies. Jin Jiang Hotels is the largest Asian owned hotel company.
While Jin Jiang Hotels has a range of hotels to suit all budgets – from deluxe to economy, Mr. Chan’s tie-up is with Jin Jiang Inns. In the agreement signed recently in Shanghai during the recent state visit of P-Noy to China, Mr. Chan’s group will build the Inns in the Philippines and Jin Jiang will market the Jin Jiang branded Inns in China, thus bringing in a stream of visitors. Initially, two Inns will be built in Makati and Ortigas. Mr. Chan said they just want to get their feet wet first before they expand to the tourist hot spots in the provinces.
The decision to team up with the budget hotel unit of Jin Jiang instead of its five star division is inspired. Online figures cited by China Daily from Chinese hotel and destination review website Daodao.com indicate that about 34 percent of Chinese travelers choose budget hotels, 26 percent prefer four-star hotels and 16 percent of them choose five-star hotels.
But tapping the China tourism market is not easy. That’s probably why past Tourism Secretaries were afraid to go to China. It is a tough market if you don’t speak the language or know the nuances of marketing to them. Mr. Chan, knows how to market to the Chinese more than any Chinoy or Pinoy but his exposure is more in the packaged food sector. Choosing Jin Jiang gives him a partner who knows the Chinese travel market well.
And as the Chan group gains more confidence, they can move up the Chinese tourism market with the same partner. This is likely to happen sooner than later. Ten years ago, most of the travelers from China were government officials or people from state-owned companies. Today, there are a growing number of Chinese travelers at the upper end of the market looking for more sophisticated offers. They are willing and able to spend more if they get high quality services- quality according to the specific Chinese customs, values, and demands.
There is obviously a lot of work to be done to get our fair share of the Chinese tourist market. Even now, they have started to come, brought in by charter flights on Fred Yao’s Zest Air to Boracay via Kalibo. Mr. Yao told me he plans direct flights from Beijing and Shanghai to Palawan too. PAL and Cebu Pacific are already flying quite a number of flights to and from China. With Open Skies, China’s many airlines will want to cash in too once we convince the Chinese tourists to come.
We just have to use our advantages the way our Asean neighbors are using theirs to bring them in. What we lack in infrastructure we more than make up for in natural beauty and wonder. If we just concentrate on the China, Japan and South Korean markets, it would be easy to meet our extremely modest visitor target and get our tourism industry rolling at last.
Hopefully, whatever tourism promotion program our advertising whiz kid of a Tourism Secretary may have in mind is something we can use in the most prospective of our potential markets. He must not lose focus on the most promising of markets. We simply have to get our fair share of those billion pairs of itchy feet.
Chinese resto
A man walks into a Chinese restaurant but is told by the Maitre d that there will be at least a 20- minute wait. “Would you like to wait in the bar, Sir?” he says.
The man goes into the bar and the bartender says, “What’ll it be?”
The man replies, “Give me a Stoli with a twist.”
The bartender pauses for a few seconds, then smiles and says, “Once upon time, there were FOUR little peegs . . . ”
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By: Boo Chanco – Demand and Supply
Source: The Philippine Star, October 21, 2011
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