Tourism takeover: Chinese travelers changing the industry
An unremarkable Days Inn sits on the raw end of New York Avenue, where it feeds into highways and a quick exit out of town. An accurate online description calls it a “cheap alternative to central Washington, D.C., hotels.”
Appearances can be deceptive. As the large sign in Chinese characters proclaims, this is the home of Panda Gourmet, arguably one of the best Chinese restaurants in the nation’s capital and a beloved survivor of the 21st century’s early rush of Chinese tourists to America.
Those first visitors all seemed alike: traveling on tight budgets at the Days Inn, bused around the national monuments, stopping for photographs (later selfies), disliking American fast food and returning to the Days Inn to gorge on the Shaanxi and Sichuan meals at Panda Gourmet.
Those days are gone.
Chinese tourists now are as varied as those from any other country and often much wealthier. Panda Gourmet still feeds the occasional busload of Chinese tourists, 20 to 100 at a time. But we locals are doing our share to keep it in business. (The salt and pepper shrimp is a standout.)
In only three decades, the Chinese have gone from easily stereotyped, rube, new tourists to conquerors of the industry. After hundreds of millions of visits and billions of dollars showered around the world, Chinese tourists now hail from the middle, rich and the very rich classes. Fewer travel in groups. Some still enrage destinations with their thoughtlessness. Others are welcomed for their enthusiasm and unique points of view. Above all, the Chinese are changing tourism around the world.
This is no accident. The Chinese government has been moving to dominate tourism since Deng Xiaoping gave a series of talks in 1979 on the central role of tourism for China as it opened to the world. His cornerstone talk has the clunky communist title “There’s a Lot to Be Achieved Through Tourism,” but it nonetheless positioned tourism as essential to the country’s seismic economic reforms and its bid to become a major world power.
At the time, there were exactly three hotels for foreigners in all of Beijing. Deng asserted that the Chinese had lost their instinct for hospitality and were inept at entertaining foreigners.
This was a remarkable admission. Few countries today place tourism at the center of their foreign and economic policies; far fewer did back in 1979. But the Chinese were serious, and they never let up.
The shock is how successful they have become, and on their own terms. The government gradually eased the Mao-era travel restrictions, instituted national holidays and vacations and used the country’s new wealth to ride the wave of exploding global tourism.
“China has the Pacific world of tourism on a platter, and it is about to have Europe and Africa on a platter,” said Jonathan Tourtellot, the CEO of the Destination Stewardship Center and a former senior editor and director at National Geographic.
Yet the scope and scale of China’s dominance of tourism, and the importance the Chinese government places in the industry, is never mentioned in the learned articles about “whither the new China Century.”
Without tourism, those pundits are missing one of China’s greatest expressions of global leadership. The travel numbers are astonishing. For the fourth year in a row, the Chinese are the world’s biggest group of international travelers, taking 142 million international trips in 2017. In the next decade, that number is projected to jump to 390 million, according to the China Outbound Tourism Research Institute (Cotri).
And Chinese tourists are the biggest international spenders: $258 billion last year. All this has been accomplished at a time when only 7% of Chinese citizens hold passports. On the inbound side of the equation, China is expected to become the No. 1 travel destination sometime in the next five years, knocking out France and solidifying its dominance over tourism.
China’s President Xi Jinping and his government see tourism far beyond those numbers. They negotiate with foreign governments to increase tourist visas for Chinese and to increase access for Chinese to open travel businesses in those countries. From Norway’s arctic circle to Australia’s Great Barrier Reef, from Italy to Cambodia, Chinese businesses are setting up shop to cater to Chinese tourists with motorcoaches, restaurants and hotels.
The Chinese also use tourism as a forceful leverage in geopolitics. When China perceives a country as misbehaving, it has no qualms about using tourism to punish the offender. To show its displeasure with South Korea for deploying an American-made missile defense system, for example, China, through its travel agency system, blocked cruise ships from going to South Korea, effectively putting an end, at least temporarily, to that lucrative business.
Arne Sorensen, CEO of Marriott International, felt the wrath of China when the company issued a routine customer rewards email that mistakenly referred to Tibet, Taiwan, Hong Kong and Macau as independent countries. Marriott had to shut down its six Chinese websites and apps for one week as punishment, and Sorensen made a very public apology.
The shutdown was especially painful because Marriott had set up a partnership with Alibaba, China’s giant consumer website, in 2017 in a bid to expand its business with Chinese tourists.
In May, the White House stepped in when China demanded that U.S. airlines no longer refer to Taiwan as a separate nation on their websites. The White House called this “Orwellian nonsense.” By then, Delta Airlines had already apologized to China.
A compromise was reached in late July. U.S. airlines will refer only to the cities of Taiwan without mentioning the country itself. Any explicit reference to Taiwan as a country has been erased from the airlines’ English- and Chinese-language websites. At the same time, the cities of Taiwan are not explicitly described as being part of China.
Nothing, though, has put a brake on the powerful allure of Chinese tourism. Governments are going all out to attract these high-spending visitors.
It’s no accident that 2018 is the official year of China Tourism for both the EU and Canada. Chinese tourists can lift economies seemingly overnight. Chinese visitors to Europe improved the Continent’s trade balance by $4 billion.
Wealthy Chinese shoppers among the haute couture shops of Avenue Montaigne in Paris are a common sight. There is so much money involved in Chinese tourism that Anna Wong of the U.S. Federal Reserve recently warned that what looks like tourist spending overseas might actually be money laundering to conceal asset investments from the Chinese government.
It’s hard to wrap one’s arms around this ever-growing Chinese tourism juggernaut, but its emergence is clearly the most important milestone for the industry since globalization kicked off the modern explosion.
A decade of significant growth
The 2008 Beijing Summer Olympics was China’s coming out party. The government spared nothing, spending $40 billion on buildings and infrastructure. Ceremonies dazzled with fireworks and pageantry, and even widespread concerns about pollution didn’t keep away international tourists, many of whom traveled to all of China’s Olympic cites.
Four billion people watched the Games on television, and China won the recognition it sought as an ultramodern Middle Kingdom. The tourists followed.
That was 10 years ago. Since then, China has risen to become the world’s fourth most popular destination and has laid the groundwork to rise to No. 1, relying on much more than a clever “Visit China” promotional campaign.
A report by Cornell University’s School of Hotel Administration states that “China has embarked on the largest program of new hotel construction the world has ever seen.”
It went on to note that every day for the next 23 years, three new hotels will open somewhere in the country. In the past decade, China has also built the world’s biggest high-speed train system and so many modern airports that some stand nearly idle waiting for the anticipated next wave of tourism.
No detail is too small. President Xi has ordered a revolution in toilets to install clean, comfortable, Western-style restrooms around the country.
Xi told China’s official Xinhua news agency, “The toilet issue is no small thing. It’s an important aspect of building civilized cities and countryside.”
On the international level, the Chinese government has created alternative global institutions that will help determine how and where overseas tourism grows.
For its massive Belt and Road Initiative, begun in 2013, China will spend nearly $1 trillion dollars on infrastructure projects across Asia and parts of Africa, connecting countries through railroads, ports, highways and airports that will significantly affect tourism growth. The initiative dwarfs the Marshall Plan, under which the U.S. helped rebuild Western Europe after World War II.
China opened the Asia Infrastructure Investment Bank in 2016 as an alternative to the United Nations’ World Bank, offering aid that, again, often benefitted tourism.
The coup de grace came last autumn when China unveiled its own international tourism organization, the World Travel Alliance (WTA).
Created to tie into those massive projects of the Belt and Road initiative, the China-based WTA was founded by the Chinese vice minister for tourism and is headed by one of China’s leading tourism professionals. In that sense, the WTA is nongovernmental in name only. However, it is international, with a mixture of government and private industry members.
The WTA was viewed immediately as a rival-in-waiting to the venerable United Nations World Tourism Organization (UNWTO), even though both bodies said they would work “hand in hand.”
Roger Dow, the president and CEO of the U.S. Travel Association, became a vice chairman of the WTA, greatly adding to the new organization’s appeal and credibility. As an influential American leader, Dow’s presence in the WTA is also significant because the U.S. withdrew from the United Nations tourism organization in 1996, so there is no American voice in the UNWTO to promote the U.S., much less a leadership role.
Moreover, Dow is a major force behind the Visit U.S. Coalition, an ad hoc group created in January to combat a drop in tourism to the U.S. that coincided with mixed messages emerging from U.S. government policies and presidential rhetoric about tourism and foreign visitors. While Dow’s perch in the WTA could help increase quality tourism to the U.S., he declined to comment to Travel Weekly about his appointment to or vision for the organization.
A new kind of tourism
Wolfgang Georg Arlt, director of Cotri and a leading expert in the field, said the Chinese are already reshaping tourism, in part because they have more money than time.
“They will push Western visitors out of more destinations like Phuket, Thailand,” Arlt said. “They will insist on their style of tourism — payment by smartphone, etc. They also are reshaping the world of tourism with a strong tendency away from ‘holiday’ in terms of relaxation and doing nothing, preferably on a beach, and toward more active traveling for learning, experience and entertainment.”
The Greater Pacific region is the first to be swept up by Chinese tourism. There, China is the No. 1 source of tourists, and the Chinese government is often the No. 1 source of foreign investment, aid and grants.
It is also the No. 1 region for stories and videos about Chinese tourists behaving badly, whether it’s at buffets and beaches in Thailand or at temples in South Korea and demolishing cherry trees in Japan. That is the arithmetic of millions of new Chinese tourists squeezing into finite spaces on the planet.
But China’s reshaping of tourism itself leaves a deeper imprint. Cambodia is currently the purest expression of this. Tourism was essential to Cambodia’s recovery from war and genocide. Now, the government wants tourism to propel Cambodians into the ranks of the middle class.
To that end, the authoritarian government of Hun Sen bought into China’s Belt and Road initiative as a way to increase tourism, adding to the country’s existing $3 billion debt to China with several billion dollars more in loans for new roads, rail lines and infrastructure.
Hun Sen opened the languid beach town of Sihanoukville to massive Chinese investment. In two years, the Chinese have transformed the port into an unlikely Las Vegas on the Gulf of Thailand — unlikely because it is illegal for Cambodians to gamble. Thirty casinos have opened, with 70 more under construction, making it the fastest-growing gaming district in the world, according to a Bloomberg report.
The big profits from the casinos and new resorts are going to Chinese businesses that, in turn, are pushing out local shops and restaurants. While Cambodians can work at the Chinese casinos and resorts, their wages barely cover the rising rents and cost of living.
In January, Cambodian businesses appealed to their provincial government for help, citing not only economic problems but social and cultural conflicts, including an increase in drunk driving, prostitution, money laundering and human trafficking.
The national government put together a task force to ease tensions, but it went nowhere. Today, with Chinese signs, Chinese restaurants and shops and those thousands of tourists speaking Chinese, Sihanoukville feels as much like an outpost of greater China as it does Cambodia.
That doesn’t bother Hun Sen, who in April said he’d had enough complaints about Chinese businesses in Cambodia.
“There are some opinions that are fully ill-intended,” he said at a public ceremony in April. “They criticize Chinese companies, Chinese people in Cambodia; 1.2 million Chinese tourists bring a lot of income.”
That is just one example of the power of Chinese tourism investments.
Cotri’s Arlt said he is convinced that Chinese direct investment in foreign countries will take over ever larger pieces of the tourism industry. Chinese companies and Chinese technological advances in areas such as facial recognition will also grow in global importance.
“Made in China,” he predicted, “will dominate the way tourism is organized in the coming years.”
By Elizabeth Becker