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30 vet Asia/Pacific Co-Founder – boutique rep firm of Bryant & Tripptree Firm appointed, PATA Regional Director Former Director Hong Kong Tourism-LA Establish HK Film Dpt VP Sales/Marketing Mandarin Oriental Hotels Barbara Bryant ATME EXECUTIVE CHINA THINK TANK

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30 vet Asia/Pacific

Co-Founder – boutique rep firm of Bryant & Tripptree

Firm appointed, PATA Regional Director

Former Director Hong Kong Tourism-LA

Establish HK Film Dpt

VP Sales/Marketing Mandarin Oriental Hotels

Barbara Bryant

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Barbara Bryant, PATA North America Regional Director

February 12-13, 2009

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Ron ErdmannDeputy DirectorOffice of Travel & Tourism Industries

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Admin international travel research

Consults with clients on use and application of information

Role is to create and improve upon international marketing


Prior nearly decade with U. S. Travel & Tourism Admin until closed

Experienced in developing and promoting rural tourism

Ron Erdmann

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China Research

Presented to:

ATME:Think Tank

Presented by:

Ron Erdmann

Office of Travel and Tourism Industries

International Trade Administration

U.S. Department of Commerce

February 2009

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OTTI Resources on China

Visitor volume to U.S. from China (monthly from I-94 form)

U.S. resident travel to China (non-stop) (monthly)

Other Data collected on DHS I-94 form (monthly—port, visa type, age of travelers, address in U.S., etc.)

Visitor volume forecast (semi-annual)

Visitor spending (annual)

Visitor profile (annual)

U.S. resident travel to China (annual)

Chinese visitation to all countries (annual)

China Outbound Study (one-time special study)

China Travel Trade Barometer (quarterly planned)

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China Outbound Travel

Data from China National Tourism Office and Global Insight – Global Travel Navigator May 2008

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China Outbound Trends(total outbound travelers)

Data from China National Tourism Office and Global Insight – Global Travel Navigator May 2008

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What is Known about China Outbound Travel?Total Outbound

25 million in 2006

Only 12% to long-haul destinations; 70% to Hong Kong/Macau/Singapore.

Strong growth across most top 20 destinations, especially Hong Kong, Macau, Korea, Italy, Australia.

Tripling of travelers to Hong Kong from 2001-2006 (4.5M to 14M)

Top long-haul destinations in 2006: Italy (807K), Russia (720K), Germany (442K), US (321K), & Australia (309K).

Total travel to all long-haul destinations was 3.2 million in 2006, forecast to grow to 4.8 million by 2011.

Sources: Global Insights Inc. Global Travel Navigator; OTTI, UNWTO

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Chinese Visitors to the U.S.

000s of visitors


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China Spending in the U.S.

Millions of Dollars


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What is Known about China Outbound Travel to the U.S.?

Outbound to the U.S.:

397,000 visitors to the U.S. in 2007—near doubling in six years.

Flat visitor volume from 1993 to 2003.

25% growth through November 2008, but slowing considerably.

U.S. share of Chinese outbound travel has declined for two reasons:

Long-haul travel has declined as a share of total outbound

U.S. share of long-haul had declined until four years ago. Share of long-haul has increased.

Sources: Office of Travel & Tourism Industries (OTTI) & Global Insights Inc. Global Travel Navigator

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What is Known about China Outbound Travelto the U.S.?

Trip Characteristics:

Port of Entry: San Francisco (21%), Chicago (17%), LA (17%), NYC (10%).

Destinations: concentrated in a few states (CA-57%, NY-32%, followed by: NV, DC, IL)

Main Purpose of Trip: Business -51%; Visiting Friends & Relatives (VFR) - 23%; Convention - 11%; & Leisure/vacation 9%.

Accommodations: 83% stay in hotels.

Stay length: mean average of 28 nights, but is influenced by a few staying for a very long period of time. Median is 11 nights.

Activities: Chinese are less active travelers than average travelers.

OTTI tracks 25 Activities

Top activities 2007: Shopping (88%), Dining in Restaurants (80%), Sightseeing in Cities (51%), Visit Historical Places (47%), Visit National Parks (29%), Visit Amusement/theme parks (28%) …..

Source: OTTI , Survey of International Air Travelers, 2007.

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What is Known about China Outbound Travel to the U.S.?

Trip Characteristics (continued):

Gender: 70% male. Female proportion is increasing.

Age: Males—41 mean / 39 median; Females—36 mean / 35 median.

Income: lower than most origin countries.

$63,900 (mean)

$36,700 (median)

Spending: highest spending per traveler of any country ($5,200 at destinations, i.e., excluding airfares). High spending relative to income may reflect saving for “dream vacation” and souvenir purchases made on behalf of friends/relatives.

Looking ahead:

Trip characteristics will likely change if group leisure increases.

Source: OTTI , Survey of International Air Travelers, 2007.

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U.S. China MOU on Group Leisure Travel

Under to U.S. law Chinese can visit so long as they receive a visa.

Under Chinese law, Chinese travel agencies can only sell packaged leisure tours to Chinese to countries with whom they have a bilateral agreement or ADS

In December 2007 U.S. China Tourism MOU Signed

MOU implemented in 2 phases

Phase 1: July 2008 covers 9 provinces (over 70 % of the market)

Phase 2: U.S. is ready to implement when China agrees

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U.S. China MOU on Group Leisure TravelKey Provisions

China National Tourism Administration (CNTA) authorized travel agencies may work with tour operators who are vetted by associations with programs approved by CNTA

U.S. travel destinations able to market their brand in China

To date NTA is the only U.S. association with a program

In China the Government sets and monitors standards

In the US the industry sets and monitors standards.

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Supply Side Considerations

Liberalized restricted agreement (no open skies)

Non-stop current cap of 10 flights/day per “side”

U.S. at cap (based on January non-stop OAG schedule.

China at half the cap level.

Thus, based on current caps, short-term growth in non-stop flights must come from Chinese carriers. Long-term growth must come from upward-adjusted caps.

57% of all traffic between China and U.S. (inbound+outbound) is non-stop. Non-stop is growing as a share of all traffic.

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Who’s Flying Whom?

Traffic Mix:

US Flag = 58%, & Foreign Flag = 42% of total air traffic

62% U.S. Citizens vs. 38% Non-Citizens

Chinese to the U.S.:

40% fly foreign flag carriers

60% of U.S. carriers

Americans to China:

57% fly U.S. carriers

43% of foreign flag carriers

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China Outbound Travel Study

Purpose: to develop a fuller understanding of the China outbound travel market in support of increasing tourism exports to the U.S.

Collaboration among:

Alfred P. Sloan Foundation, Travel & Tourism Industry Center, University South Carolina

U.S. Department of Commerce, Office of Travel & Tourism Industries (OTT)

U.S. Travel Association

Over 20 U.S. destination and travel-industry partners

Multi-phase comprehensive project:

Qualitative and quantitative components

Methods: Telephone / focus-group / in-depth interviews

Surveys of long-haul travelers, U.S. visitors, Chinese government officials, Chinese travel trade

Focuses on Chinese long-haul travelers outside of Asia

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travel trade interviews(n=30)

governmentofficial interviews(n=20)

11 customer focusgroups in 11 Chinesecities (n=8/session)

phone interviews

in China (n=1600)

in-person customer interviews in the U.S. (n=400)

Phase 3

China Outbound Travel Study Phases and Elements

telephone surveyin 11 Chinese cities(n= 7,000)

Secondary Source Review

(Demographics, Economics, Politics)

Phase 1

Phase 2

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Phase I Telephone SurveyMethodology

Purpose: gain better understanding of Chinese long-haul travel market

Potential of U.S. destinations and businesses

Chinese views of the U.S.

Focus: on Chinese who…

Have traveled outside of China

Are at least somewhat likely to travel outside of China

Are at least somewhat likely to/interested in visiting the United States


Telephone interview

7000 randomly selected Chinese adults, ages 18 and older from 11 urban areas

3 “tier 1” cities; 8 “tier 2 cities” accounting for virtually all outbound travel

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Cities Surveyed3 Tier 1; 8 Tier II

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Outbound Travel

Low outbound travel incidence

8% 1+ leisure trips outside mainland China past 3 years

10% 1+ leisure trips outside Asia past 3 years

21% are “at least somewhat” likely to travel outside of Asia in the next two years

Most travel to nearby Asian countries

U.S. top non-Asian country (9%)

Most visitations connected to Landmark/Sightseeing cities and cities with China towns

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Possible future travel

21% of Chinese “at least” somewhat likely to travel outside of China in next two years

Most likely destinations are Asian

France ranked third (12%)

America ranked sixth (10%)

35% are “at least somewhat” Interested in traveling to America

A significant amount would like to but are unlikely to travel to America

When asked to pick one dream destination

America was number one

Only two Asian countries made top ten

Difference between desire and perception of possible or likely

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Chinese attitudes

America is…

Dominant; Exciting; Successful

America isn’t

Friendly; Safe; Familiar

Want to come to America to…

Learning and Discovery

Experiencing a different culture

Seeing something new and different


Seeing and experiencing something new and different important to Chinese tourist

Sightseeing cities, landmarks, and tourist attractions scored high

Rest and relaxation--scored moderately high.

Interest in traditional vacations to resorts & beaches was low. Chinese tourist has a different ideas on rest & relaxation or how to facilitate it

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Dream Destinations The United States is the most frequently cited dream destinationfor Chinese citizens, followed by France.

“Europe has a deep cultural background and is full of historical attractions. In addition, each historical attraction has its own style and this enables each different country in Europe to present a different culture.”

Traveler, Chongqing

“You can go to see the glaciers and national parks in Canada – such natural sceneries are the most famous attractions of Canada.”

Traveler, Wuhan

“The statue of Liberty is so famous as a national symbol – I would be eager to see it. The USA’s advanced economy is another attraction for me, as I want to experience this in-person.“

Traveler, Xian

“Hollywood in LA and Disneyland – such modern developments attract me to the U.S. very much.”

Traveler, Wuhan

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Activity Importance vs. U.S. Perception

“The performance by the native Hawaiians was fantastic – it gave history and drama to us tourists.”

Traveler, Guangzhou

“The buildings’ architecture in New York was unique – every building had its own design and structure.”

Traveler, Wuhan

“The most impressive sight I saw is the Grand Canyon – it is really a miracle.”

Traveler, Shenzhen

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Phase II Focus GroupsMethodology

Purpose: Qualitative assessment of…

views of the U.S. as a country and leisure destination

competing destinations

destination choice process

marketing insights for U.S. business and destinations to promote travel exports


8 participants per group

4 previous leisure travelers to the U.S. (or business trip with leisure component) in past 3 years

4 previous leisure travelers to other long-haul destinations (or business trip with leisure component) in past 3 years

One focus group in each of same 11 tier 1 and tier 2 cities from Phase I phone survey

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Common Themes

Desire and affinity to experience the outdoors and natural wonders

Taking lots of pictures/ having ample time at sightseeing locations to take lots of pictures

Fear of violence in America/ wide spread gun owner ship

The need to have mandarin translations/ uncomfortable with not knowing what is said or is going on

The feeling that Americans are nice but do not respect them or believe they have money to spend and make our hospitality worth while

Mandarin Hotline to contact incase of emergency

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China Study Phase IIITraveler Segments

USA FocusHave visited the U.S. - 400 in person Interviews

China Traveler Market

Phone Interviews with 1,600 Identified Chinese Travelers

Outside AsiaHave traveled outside of Asia, but have not visited the U.S.

Within AsiaHave not traveled outside of Asia, but plan to (but not U.S.)

PotentialHave not traveled outside of Asia, but plan to (including the U.S.)

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China Study Phase IIIFocus of Questions

Images of the U.S. as a Leisure Travel Destination

Atmosphere or Mood of US Expected to Experience

Distinctive Tourist Cities & States in U.S.

Distinctive Tourist Attractions in the U.S.

Activity Participation & Comparison of US to others

Factors when deciding on a leisure destination, with comparisons of the US to other destinations

Use of Media & MORE…………………….

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Some Additional Sources of Information on China

USTravel – China Study Phases I – III, see US Travel Website

U.S. Department of Commerce

Office of Travel & Tourism Industries –

Monthly Arrival Figures

Monthly Air Traffic Data to and from China

Annual Survey of Chinese Travelers to US & U.S. to China

Inbound Forecasts (2 per year) & Annual Spending Estimates

U.S. Commercial Service Offices in China

See Website -

Also Offering China Webinar February 18th - See OTTI TInews

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Heather HardwickVice PresidentMenlo Consulting

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Specialty is marketing analysis, strategic planning, branding and product development

Strong expertise in educational travel, adventure travel, group travel and cruising

Frequent speaker

Heather Hardwick

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Examining the Outbound Travel Market from China branding and product development

Heather Hardwick

Vice President

Menlo Consulting Group

February 12, 2009

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China Market Overview branding and product development

  • Most populous country in the world

  • World’s fourth largest economy

  • World’s third largest country by area

    • Key cities and gateways include Beijing (15M), Shanghai (17.5M) and Guangzhou (10M)

  • World’s #1 Internet users and mobile communications users

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Most populous nation and growing branding and product development

Population of China

Source: World Bank World Development Indicators; Chinese State Population and Family Planning Commission

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China’s Growing Middle Class branding and product development

Number of Chinese Households in Middle Class

Lower Middle Class (HHI ~USD 3K-5K)

Upper Middle Class(HHI ~USD 5K-12.5K)

Source: McKinsey Quarterly

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GDP is expected to continue to grow, albeit at a somewhat slower rate

Actual and Projected China GDP Growth Rates

Sources: China National Bureau of Statistics; The Economist

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Chinese outbound travel is booming slower rate

Outbound travel from China and Hong Kong

Source: CNTA, compiled by Pacific Asia Travel Association (PATA)

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Double digit growth has become the norm slower rate

Growth rates in outbound travel from China and Hong Kong

Sources: CNTA, PATA

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China’s growing travel spending slower rate

International Tourism Expenditures

Sources: UNWTO, China State Foreign Exchange Administration

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Most outbound travel is within Asia slower rate

Top Asia Pacific destinations for travelers from China

Source: relevant NTOs, compiled by Pacific Asia Travel Association (PATA)

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Chinese travel to North America is taking off slower rate

Arrivals to North America from China PRC



Source: Pacific Asia Travel Association (PATA)

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California is making a move in the market years

  • California opened an office in China in January 2009

  • All (100%) Chinese view a Chinese Web site as the most important way for them to learn about California.

  • Only 1% Chinese consumers and a handful of tour operators and media reps have been to California.

  • Almost all Chinese know of Los Angeles and San Francisco. They also have special ties to China as sister cities to Guangzhou and Shanghai. One-third recognize San Diego.

  • Motivations for visiting California include nature/parks, theme parks, and sunshine

Source: California Travel and Tourism Commission (CTTC)

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What drives Chinese tourists to California? years

Source: California Travel and Tourism Commission (CTTC)

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Outlook for China years

  • Continuing, albeit slowed, economic growth

  • Growth in outbound travel is expected to continue

  • Increasing linkages to international destinations and organizations

  • Competition for the Chinese traveler intensifying

  • With the MOU, and increased marketing in China, the USA stands to benefit from strong inbound traffic

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m yearsCG



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Frank Haas yearsAssistant DeanUniversity of HawaiiSchool of Travel Industry Management

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Teaches courses in marketing and Executive Development in Tourism Program

Undertaken planning projects for tourism, government and non-profit corporations

Formerly VP Marketing Hawaii Tourist Authority

$50 million dollar budget

Frank Haas

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The Chinese Travel Market: Tourism ProgramOpen Carefully

Frank Haas

University of Hawai‘i at Mānoa

School of Travel Industry Management

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In China … Tourism Program

Everything is possible –

Nothing is easy

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In China … Tourism Program

Negotiation starts

After the contract is signed

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Bottom Line Tourism Program

Huge potential … but developing the potential will take work

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Responsible Development Tourism Program

Hysteria … or irrational exuberance

100 million outbound tourists by 2020

25 million outbound overnight trips in 2006 … 350% increase since 1997

Reality …

A significant and growing market, but …

16.3 million of the 25.3M travelled to Hong Kong or Macau (64%)

392.6 U.S. arrivals in 2007 – projected to 578.5 in 2011 (rank = 20)

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To cover … in Hawai‘i

Be prepared for culture shock …

Learn from experience

The China market we’ve seen recently probably isn’t the market post MOA

Relationships matter

What we’ve seen with our 56,000 Chinese visitors

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International Arrivals Percent in Hawai‘i

Early 70s – Hawai‘i

Gets Serious

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Opening a huge new market means dealing with first time travelers … and first time encounters with Western culture

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Culture Shock travelers … and first time encounters with Western culture

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Problem: Destination Was Focused on Domestic Visitors travelers … and first time encounters with Western culture

Limited staff possessing multiple language skills

Japanese visitors were dependent on Japanese speaking guides

Confusion in accommodations

Hotel amenities weren’t culturally appropriate; fixtures were “foreign”

Lack of appropriate experiences – especially food

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Language Limitations travelers … and first time encounters with Western culture

Visitors were dependent on their guides

Guides were often driven by commission

Result: visitors didn’t always get an ideal experience … and satisfaction suffered

Guided tours caused large groups to visit attractions, restaurants, etc. en masse, overwhelming capacity

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Confusion in Accommodations travelers … and first time encounters with Western culture

As the Japan market developed, first time visitors encountered strange/unexpected features and fixtures …

How to work the plumbing?? Electrical appliances?? Call the front desk and no one speaks Japanese

No green tea/teapots in the room

No drains in the bathroom floor

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Lack of Appropriate Experiences travelers … and first time encounters with Western culture

Japanese were consumers of mass tourism as westerners were becoming more independent

Japanese wanted quality Japanese food … breakfast, lunch and dinner

No tipping

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Cultural Differences travelers … and first time encounters with Western culture

Visitors carried large amounts of cash … vulnerable to robberies and purse snatchings

Prevalence of smoking


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The Retail Experience travelers … and first time encounters with Western culture

What we were selling …

What they wanted to buy …

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Solutions Came with Critical Mass travelers … and first time encounters with Western culture

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The French Festival travelers … and first time encounters with Western culture

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Because of lack of Approved Destination Status and entry restrictions …

Chinese visitors to date have been senior government and business officials

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Visitor Spending restrictions …$US Per Person Per Day

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Some Emerging Issues restrictions …(2003 Hawai‘i Post Arrival Survey)

Chinese food (especially good Chinese food) is a driver of satisfaction

Language barriers were linked to perceived cultural discrimination

Negatives …

Service quality (knowledgeable in Chinese service expectations)

Time constraints (guides pushing too many activities)

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What We Think We’ll See character as class goes to mass

Shopping will include “authentic” luxury items … and …

Gifts and souvenirs for family and friends at home … and

Vitamins, supplements and other “safe” products

Chinatowns and China connections are a draw

Need for acceptance of Chinese credit (China Union Pay)

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More Chinese speaking staff … through training or new hires

HTA contract with the Community College system

Developing retail, food and beverage and hotel amenities that appeal to the Chinese

Learn to manage diverse cultures in the visitor mix

Political events pose a risk

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Over time, we’ll see the market evolve from GIT hiresPITFIT

The market to Hawai‘i is about 30% FIT at the moment, but that will change with volume

Satisfaction may be sub-par until language and product are aligned … feeling of cultural discrimination

Prepare for cultural differences – i.e. tipping, smoking, group mentality

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Relationships Count hires

Titles and Official Status Matter