Flag for new wave of Chinese tourism

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China’s ”second-tier” cities – a vast, untapped and increasingly wealthy market of more than 100 million people – will be the focus of a campaign by Australian tourism officials.

Tourism Australia will spearhead today a drive by domestic airports to attract tourists from such cities. Research shows the travel profile of those living in secondary cities is almost identical to those in Beijing, Shanghai and Guangzhou.

The Routes Asia forum at Chengdu, a new aviation hub in central western China, is being held so airline planners can decide which future routes should be developed based on demand.

Soon, Australia could have direct flights to cities such as Chongqing (population 7 million), Hangzhou (population 9 million), Nanjing (8 million) and Tianjin (13 million). The research is based on 13 cities, but the geographic strategy will target more than 30 in three phases up to 2020.

The managing director of Tourism Australia, Andrew McEvoy, said the low-cost Singapore Airlines subsidiary, Scoot, planned to get into 10 second-tier cities.

”There are other airlines, Hainan and others in China, who would consider flying from some of these second-tier cities directly to Australia,” he said. ”Second-tier city constituents have the same mindset as first-tier cities and they are getting up to the same level of income. They want to travel, and Australia … is No. 1 in their mindset. Our mission is to hold or grow market share in a growing outbound market.”

The job of domestic airports, which for the first time will present a combined voice on the issue, is to convince the airlines there is enough demand from Australia so aircraft are not flying home half full. There were about 372,200 outbound resident departures to China for the year to January, a growth of 9 per cent on the previous year, according to research for Tourism Australia.

The vice-president of the Routes Asia forum, Nigel Mayes, said: “Air service development is a highly competitive environment and we would encourage others to take a leaf out of team Australia’s book by ensuring they provide a clear picture of what destinations and their airports have to offer.”

Figures released last week showed the strength of the Australian dollar was taking a heavy toll on the nation’s tourism industry.

Luxury Stores Pull Out Mandarin Phrase Books to Make the Sale

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They were not celebrities. They were not government officials. They were Chinese tourists with a lot of money.

Though luxury brands started opening stores in Beijing and Shanghai years ago, Chinese shoppers still spend more on luxury products abroad than they do at home, according to the consulting firm Frost Sullivan. Price is the major reason: Because of China’s taxes, luxury products are about a third cheaper in the United States and elsewhere.

European luxury stores have been catering to Chinese tourists for years. Now high-end retailers in the United States are pulling out their Mandarin phrase books and trying to convince Chinese visitors that Americans can do luxury, too.

“What started as a trickle has now become a flow,” said the vice president of the antiques store Macklowe Gallery, Ben Macklowe, who recently sold a Tiffany lamp that cost in the low six figures to a Shanghai visitor. “There’s been prosperity across so much of Asia that you’re starting to see it much more in the profile of the tourist on Madison Avenue.”

A record number of Chinese visited the United States last year — nearly 1.1 million — and the country accounts for one of the top-growing tourist groups here, according to the Commerce Department. The number of visitors is expected to almost double by 2014, according to the U.S. Travel Association. Chinese visitors spend about $6,000 each on every visit here, versus the $4,000 that visitors from other countries spend on average, the association says, and their top activity is shopping.

Although some tourists spend money on Disney trinkets and at the outlet malls they have traditionally frequented, luxury brand purchases are surging in part because American stores carry a broader range of products than their counterparts in China, said Julia Zhu, consulting director for Frost Sullivan.

Tiffany, which made almost a quarter of its United States revenue last year from foreign tourists, has added Mandarin-speaking sales staff to its major stores, as has Burberry, where more than half of sales at its flagship stores are to tourists. Representatives from Tourneau’s Manhattan office recently accompanied New York City officials on a visit to China to encourage more tourism in the city.

At its United States stores, Montblanc sells Year of the Dragon pens and has staff members who speak Mandarin and Cantonese. It is also printing Chinese-language brochures about its products and selling wallets sized for Chinese currency.

Despite having more than 100 stores in China, Montblanc is going after Chinese shoppers on vacation abroad. “Yes, we are in the major cities, but when you travel, you’re in the mood to enjoy and experience the moment,” said Jan-Patrick Schmitz, chief executive of Montblanc North America. “We certainly will do more and more marketing toward them.”

Retailers in the United States lag behind other countries. Part of that is because of visa issues; it is easier for Chinese residents to get visas to Europe. High-end American retailers like Saks Fifth Avenue and Bloomingdale’s are urging the government to speed up the process here. President Obama said in January that he planned to increase visa-processing capacity from emerging markets like China and Brazil by 40 percent this year.

The American stores also have to overcome an idea that luxury can come only from the old world.

“The European brands, they see prestige, history, heritage,” said Sunny Wong, group managing director of Trinity, a company that owns and operates high-end European retail brands in China. American brands, by contrast, are seen as “contemporary, lifestyle” rather than pure luxury, he said.

American retailers are racing to prove Mr. Wong wrong.

Bergdorf Goodman in January held a private runway show at its Fifth Avenue store for a group of Chinese tourists, followed by a meet-and-mingle with designers like Mr. De la Renta, Peter Som and Zac Posen. Then, with Bergdorf’s fashion director looking on, Mandarin-speaking assistants helped the Chinese customers shop throughout the store.

“There are lots of brands that are already very well-known in China, but Bergdorf’s strongest footprint is in New York, so getting them to know that brand when they come here is a very important goal for us,” said Chris Noble, president of Affinity China, a luxury travel operator that organized the event.

Affinity China also arranged a meeting with Aerin Lauder, a granddaughter of Estée, and a tour of J. Mendel, the fur brand, with a designer and one of the Mendels. “They took them backstage, and showed how materials are selected and how the pieces come together, and showed them the craft,” Mr. Noble said. “We’ve got a lot of interest in the craftsmanship behind the luxury pieces. People like to be able to say, ‘I saw how this was made, I met the designer.’ ”

Mr. Macklowe, the gallery executive, recently held a seminar with Champagne and chocolate for Chinese tour operators.

“You have to tailor your message for the crowd, and for this crowd it was, ‘These are very exclusive things, these are very authentic things, these are very high-end things that you can recommend to your clients without reservation,’ ” he said. “We tried to give them a sense that what we do only exists in one place on earth.”