u Visit California China Office Monthly Activity Report February 2014 Prepared by AVIAREPS Marketing Garden China I. INDUSTRY UPDATE Economy The global property report Investment MarketBeat 2013 said development land sales in China's secondary cities helped the PRC record the highest volume of real estate investment in Asia-Pacific region in 2013, The investment totalled $358 billion, more than 70% of the region's outlay. The report said a record $487 billion was invested in real estate in the region, an increase of about 13% over the previous year. The National Bureau of Statistics (NBS) reported that China's per capita disposable income reached 18,311 yuan ($2,993) in 2013, an increase of 8.1% in real terms. Chinese economists expect GDP growth to remain at 7.5 percent year-on-year for 2014, the same as in 2013, sustained by economic recovery in developed countries, slower RMB appreciation and growth in consumer spending. The Chinese currency Renminbi, or the yuan, weakened 8 basis points to 6.1192 against the U.S. dollar on February 26, according to the China Foreign Exchange Trading System. Outbound Travel Market Chinese government statistics show the number of group tourists travelling overseas reached 4.725 million during the Spring Festival holidays (Jan 31- Feb 6), up 18.1% compared to 2013. China National Tourism Administration said most outbound tourists travelled with their family, and the majority were within the 35-45 year age bracket. Island destinations such as Phuket, Bali and Jeju were 'hot' destinations, and the price of average travel packages soared 10.2%. 1
A new report by Asia brokerage group CLSA predicts the number of Chinese outbound tourists will double in six years, hitting 200 million by 2020. It said that higher pay, more annual leave, relaxed visa policies, worsening mainland pollution, and overloaded domestic tourism infrastructure will all be factors driving a new wave of Chinese travelers abroad. The UN World Tourism Organization said Chinese tourists' travel expenditure rose 28% in the first three quarters of 2013. Travelers from China will account for around 40% of Asian outbound travelers by 2030, according to a new travel and tourism industry report jointly published by TripAdvisor and Boston Consulting Group (BCG). Within the same time frame, China will likely overtake the U.S. as the world s largest domestic travel market, the report said. By 2030, Chinese urban travelers will take 1.7 billion domestic and outbound trips annually, up from 500 million today, and spend US$1.8 trillion on their trips, nearly seven times current expenditures. The report showed China s outbound leisure market will grow the fastest, with its travel and tourism spending increasing by 15% year-on-year between now and 2030. Competitive Environment Visitors to Canada will automatically be considered for a multiple-entry visa from February 6, 2014, said Canada s Citizenship and Immigration Minister. Multiple-entry visas will allow qualified visitors to come and go from Canada for six months at a time for up to 10 years without having to re-apply. Sri Lanka Tourism reported the number of Chinese visitors rose by 224% in January, reflecting the effectiveness of promotional campaigns launched in 2013 to attract the China outbound market. The Australian Government announced an extension of its business visa program to include 3-year multiple-entry visas for Chinese business travelers. New Zealand Tourism is promoting the nation as Middle Earth as its seeks to extend the success of its marketing based around the two home-grown blockbuster movie series The Lord of the Rings and The Hobbit. Consumer Trends The 2013 FIT Traveler Report published by China online travel platform Mafengwo.com shows the U.S. west coast is the No. 1 overseas self-drive destination for Chinese tourists, and honeymoon trips on island destinations are a new preference for young Chinese couples. The report, which analyzed 30 million users 2
travel behavior, hotel booking data and destination ranking, also indicated a shift from sightseeing to more active interests, plus increased use of bank cards (mostly from China CITIC Bank, Huaxia Bank and Bank of China) rather than cash for visitor spending. The College Students Travel Report for 2013 indicates FIT is the most popular travel method (67.85%) of Chinese college students and train travel is their most preferred transport option (65.09%). The joint report by Youth Tourism Research Institute and China University Media Union also shows blogs (58.27%), Weibo (35.24%) and Weixin Moments (22.51%) are the preferred social media platforms for sharing travel experiences. Digital sharing of travel images is highly popular (69.75%) but few (17.45%) share a written record of their trip. Printed photos or SMS are no longer popular. Travel Trends The results of an independent study for TripAdvisor, the world s largest online traveler forum, show 29% of its patrons visit the site several times a month, 12% say they check it at least once a week and 26% regularly use it more than once a week. More than 80% say the site s reviews help them feel more confident in their travel decisions, and 93% of respondents feel that a hotel stay is very important to the overall trip experience. Media Trends The number of Internet users in China has reached 618 million and the Internet penetration rate now stands at 45.8%, according to China Internet Network Information Center's latest figures. Chinese NASDAQ-listed online media company Sina Corp has selected banks for an initial public offering of Sina Weibo, its Twitter-like microblogging service. Weibo's market value is estimated to be $4 billion. United States-listed Dangdang Inc, a major e-commerce player in China, and Yhd.com, a Chinese online supermarket that is majority-owned by Wal-Mart Stores Inc, are expected to announce a merger in March that would result in a significant China market dominance. Airlift 3
Guam Visitors Bureau (GVB) announced that Chinese New Year charters operated by Dynamic Airways brought in 800 Chinese tourists. Including the charters operated by United Airlines, 1,780 Chinese tourists visited Guam for the holiday period. Guam received 10,384 Chinese tourists in 2013, up 14.9% compared to 2012. The first direct charter (January 30) from China to Tahiti has been hailed as a great success. The charter program was hosted by Tahiti Tours and involved cooperative arrangements with Huayuan International Travel Service, Byecity.com, Caissa International Travel Service, China Travel Service and China Youth Travel Service. The Air Tahiti Nui charter, involving a 14-hour direct flight, carried 293 mainland visitors. Chinese tourists going to Tahiti had previously needed to transfer in Tokyo and travel 24 hours. Ethiopian Airlines, the fastest growing airline in Africa, will launch a daily Boeing 787-8 service between Addis Ababa and Shanghai Pudong on March 24. China Eastern Airlines signed an agreement with Disney Destinations on January 24 to help promote Disney theme parks around the world, especially the Shanghai Disney Resort which is now under construction. The memorandum of understanding includes brand promotions, product marketing and promotion of Disney resorts in the United States, France, Hong Kong and Shanghai. II. ACTIVITY UPDATE A. Travel Trade Marketing A-1. Major Sales Calls Visit California China participated in a press conference in Nanjing organized by Nanjing Daily for the launch of self-drive tour products in America. As the first destination for the products, Visit California supported the press conference, giving away gifts to the audience in order to generate more interest in California as a self-drive tourism heaven. 4
5
Visit California China worked with United Airlines in preparation for the March 20 Chengdu Mega Seminar to promote the airline's new service from Chengdu to San Francisco from June 11. Visit California China successfully collaborated with Brand USA, San Francisco Travel Association, Los Angeles Tourism & Convention Board, Palm Springs Convention and Visitors Bureau and Universal Studio Hollywood to train travel agents from Chengdu, Chongqing and surrounding areas. A-2. Travel Trade Shows/Events ************************************************************************** B.VC Beijing Office B-1. Hotels and Airlines VC Beijing had its monthly meeting with Air China in which co-promotion for the upcoming low season and summer holiday was discussed. VC Beijing would like to cooperate with Air China to launch products which will focus on family holidays and self-driving in California. The products will involve flying with Air China from Beijing to California and staying 5-7 days in the Golden State. VC Beijing will start to find industry partners to develop appropriate products. VC China had a meeting at Marriott's International Regional Sales Office in Beijing with Mr. Mike Waterman, Southwest Region Sales and Marketing VP. VC Beijing expressed thanks for Marriott International's continuing support and its hopes for closer cooperation with Marriott properties in California to show Chinese travelers the true spirit of the Golden State. VC Beijing invited Marriott California hotels to participate with airline partners in the design and launch of low season and summer holiday tour packages. It also requested support from Marriott for Fam trip sponsorships during 2014. Marriott said it would like to sponsor the VC Fam for Chengdu media in April. B-2, Major Sales Calls VC China visited Grand China MICE to discuss its next group which will hit San Francisco in late April. The group of 40-50 persons would like to visit Pebble Beach as well as Napa Valley. They also intend to visit local farms to gain a unique experience of California life. The group will stay in San Francisco area for five days and experience golf activities, hot air ballooning and the wine train, among other activities. Visit California shared this information with Ms. Sun Xue, 6
Senior Account Manager, and will send her the detailed information (including relevant industry partners) for reference. VC Beijing will also monitor the group's progress and provide essential support to Grand MICE to ensure the visit's success. VC China met Amanda Zhang, General Manager of North and South America Travel Center, during its regular sales call to CYTS Outbound. The agent is one of Visit California s key tour operator partners and always provides strong support. VC Beijing has worked with CYTS during the year to promote California in low seasons, to keep launching products each month and focus on California only. CYTS presented VC Beijing with a support wish list which includes pop-up banners for display in retail stores and cost-sharing of advertising in newspapers and magazines. VC China will address these requests to provide as much support as possible to CYTS. VC Beijing helped Beijing Shanshui Holiday Travel Service launch a new California road trip product on its Taobao online shop. VC Beijing gave guidance on product design to optimize the itinerary which involved many California destinations along the State Route 1 highway. Beijing Shanshui Holiday is a new entrant to promotion in China of the U.S. and California and VC Beijing hopes to build a good relationship with the agent. Below is a screen shot of the products. VC Beijing made a visit to Hitour.cc for a meeting with CEO Summer Xia. Hitour.cc is an OTP which is dealing with online sales of outbound tour packages as well as theme park tickets and local one-day trips. It has launched products in gateway cities Los Angeles, San Francisco and 7
San Diego and would like to develop other California products relevant to the surrounding areas. VC Beijing provided Mr. Xia with information about hot-air balloon rides, the wine train trip and winery tours in Napa Valley and Sonoma County. VC Beijing will maintain close contact with Hitour.cc to encourage its launch of more California products. VC Beijing provided agency in-house training, including a destination presentation of Grand California, for staff of China Peace International Tourism-Beijing Star MICE. The training was initiated by Brand USA and Visit California participated with Los Angeles Tourism and Convention Board. The 10 attending staff were all managers and operators and the training lasted 40 minutes. VC Beijing introduced the general tourism resources of California and highlighted the following: Visit California Chinese Official Website VC OTP Travel Trade Portal for China Tour Operators Social Media Campaign (Ms. Gao Yuanyuan) The company only recently started its U.S. division and VC Beijing will work strongly to help it develop California products. 8
B-3, Marketing Activities / Events UAL Chengdu co-training VC China's planning for trade training in Chengdu, co-hosted with United Airlines, included the following: Distributing opportunity details and participation requests to California industry partners Designing backdrops Developing seminar training itinerary and schedule Issuing attendee invitations and developing talking-points Sourcing give-aways Issuing VIP speaker invitations UAL Chengdu Trade Fam VC China will escort the trade Fam (March 10-16) of 10 tour operator partners from Chengdu and Southwest China area; they will stay in California for six days and visit San Francisco, Los Angeles and the central coast. The Fam is preparation for the upcoming launch by United Airlines of its new Chengdu-San Francisco route on June 11. On return to China, the tour operators will design and launch California and west coast products in Chengdu area. VC China had a meeting with CYTS MICE to get information about the progress of the Perfect China Mega MICE group. The group visa interviews started on February 21 in Beijing and Shanghai and by end of month 91 of 941 participants had been rejected. VC Beijing consequently initiated talks with consular representatives to overcome the visa issues. The success of this group visit relies on every participant having a chance to visit California so VC HQ sponsored a reference letter to the U.S. Consulate asking for its full support of CITS MICE and Perfect China. VC Beijing will work with consular staff to ensure as many participants as possible visit California in May. C. Public Relations D. C-1. Media Monitoring (clippings and publicity calendar) 9
Visit California China office secured 53 items of PR coverage during February with an estimated total circulation of 14,250,000 and estimated advertising value of US$ 2,332,205. C-2. Press Releases Distribution Visit California China office distributed two press releases (below) to key media representatives in China, and followed up to ensure coverage. Only in California - Outdoors & Adventure Ready for Romance: California Honeymoons & Couples Getaways C-3. China E-Newsletter Visit California China s February E-Newsletter contained the following content specially prepared for Chinese media. California's Must-See Events (continued) Romantic Getaways & Honeymoons in California C-4. Media Liaisons Visit California China office made 16 press calls to major travel trade, daily newspapers, magazines and portal sites to pitch for California features: 1. Ms. Linda Zhang, Feature Director, Tatler 2. Mr. Vincent Zheng, Editor-in-Chief, Global Traveler 3. Ms. Shen Jing, Project Manager, In Culture 4. Ms. Eugenia Uang/Ms. Iris Peng, Publisher/Co-Publisher, MOOK Publications 5. Ms. Amanda Zhang, Reporter, Jiang Nan Tourism News 6. Mr. Xu Min, Managing Editor, mg Men s Guide 7. Ms. Chloe Yu, Feature Director, World Traveller 8. Ms. Doris Ye, Editor, Orient Morning Post 9. Ms. Yang Yizhi, Editor, 163.com, 10
10. Ms. Zhang Yichi, Editor-in-Chief, City ZINE Travel Issue 11. Ms. Fan Yuejiao, Editor, Lifestyle 12. Ms. Huang Jian, Editor-in-Chief, Traveler Weekly 13. Ms. Wang Yuan, Senior Editor, Traveler Weekly 14. Ms. Yan Jia, Editor, Youku.com 15. Ms. Zhang Ao, Editor, CNR 16. Ms. Deng Yanqiong, Editor, Blog Weekly Magazine C-5. Media Calls Highlights Media: National Geographic Traveler Circulation: 600,000 Profile: one of the very high quality and poplar travel magazine circulates to 800,000 experienced and sophisticated international travellers every issue. Topics: Travel in San Francisco Bay Area, California Follow up: National Geographic Traveler will publish an exclusive San Francisco Bay Area feature in April to introduce the travel resource including scenery, shopping, wine and food, culture to Chinese travlers. Media: Bank of China VIP DM Circulation: 2,000,000 Profile: a high quality magazine dedicated to bank s card members, with a strong target to the 3H market (high education, high income, high consumption) in major cities in China. Topics: Travel in California Follow up: Visit California China office pitched California travel resources and position California as the leading travel destination in the U.S. Media: Noblesse Circulation: 230,000 Profile: an exclusive luxury lifestyle media tailored made to the upper class audience in major cities in China. Topics: California Road Trip Experience Follow up: Noblesse will publish an exclusive California feature to introduce the travel resource including winery tour, wine and food, scnery, and shopping highlights to Chinese travlers. Media: Lifestyle Circulation: 250,000 11
Profile: Topics: Follow up: Life Style, as the most significant member among magazines of Life Style Group, is the one of the most influential newspapers in Beijing-Tianjin-Hebei area of China, featuring detailed fashion and lifestyle information. It is commonly recognized as The first brand of lifestyle newspaper in China by professionals. Readers target at white-collard workers mainly from 18-35 who have got large consuming capacity with far higher income than average. Beverly Hills Lifestyle is preparing for a feature on Beverly Hills, presenting the destination as the luxurious destinations in California. The article will be published early March. C-6. Press Fam Trip National Geographic Traveler/Trends Traveler Magazine VCA China office secured the media s post fam after their SeaWorld s anniversary celebration tour in later March 2014. The magazine circulates to 800,000 experienced and sophisticated international travellers every issue. VCA China office is now working with head office to follow up with CA vendors for itinerary consolidation, which will highlight the road trip experience, including San Diego, Fresno, Yosemite, Sonoma, Mendocino, San Francisco Bay area etc. 12