Prepare for the Arrival of Chinese Tourists

China is poised to become the world's second-largest tourism market in the next two years, but is the world ready for the flood of Chinese travelers?According to a new study from the Boston Consulting Group, the answer is no.

Chinese consumers, thanks to rising incomes and a bustling economy, are powering a travel boom that's set to catapult China's tourism market past Japan's by 2020, the study says. According to BCG's projections, China's combined domestic and international tourism revenues are expected to increase 14% annually for the next 9 years -- creating a 5.5 trillion-yuan, or roughly $838 billion, tourism market, up from 1.5 trillion yuan last year – with revenues from outbound Chinese tourism alone expected to grow a whopping 381% over that span.

Despite the eye-popping numbers, the research group says, few companies in or outside the country have equipped themselves to cater to the swelling crowds of Chinese voyagers.

Among the most obvious indications of how unprepared the industry is for the coming wave of Chinese tourism, the study says, is the failure of many restaurants, hotels and airports to use Chinese characters on signs and menus—a simple gesture that would help them attract China's international travelers and keep them coming back.

Hotels and destinations also need to step up their marketing to make themselves known to a country of tourists who don't have prior experience hitting the road, the report says. Unlike in other markets—where previous trips and word of mouth often help people decide on honeymoon destinations and plan summer vacations—Chinese rely heavily on travel agents and tour packages. When they do branch out on their own, the study finds, they tend to stick to hotel names they know and restaurants they've heard of.

And unlike Western travelers, who think of staying in a hotel as an experience unto itself, Chinese typically see hotels as a place to sleep for the night, BCG says.Retailers should also think about adding customer services, such as Chinese translation or specially-trained sales forces, says the study, which is based on a survey of 4,250 Chinese travelers.

Of course, some companies are making the effort to win over Chinese tourists. Luxury retailers, such as Burberry, are already hiring Chinese-speaking sales staff at their Europe-based stores to help them cater to Chinese shoppers, who make 56% of their luxury purchases overseas, according to investment research group CLSA Asia-Pacific Markets.

Resort company Club Med, too, is working to supply the Chinese market. The French vacation company invested in a ski resort in northern China last year, and has created partnerships with travel agencies in Shanghai and Beijing. Club Med also hosts occasional celebrity events to attract attention and high-end consumers, the study notes.

Developing the ability to accommodate Chinese travelers may have recently become even more urgent, at least in certain markets. Japanese tourists, who powered hotels in the Asia-Pacific and Hawaii over the past few decades, are expected to decrease or halt travel in the aftermath of the natural and nuclear disasters that have occurred in their homeland.

As a recent Bloomberg report points out, the catastrophes will likely accelerate a travel decline that began several years ago and boost a reliance on China.Japanese travelers spent $25 billion in 2009, compared to $44 billion from Chinese tourists, according to figures from the United Nations World Tourism Organization cited by Bloomberg.

Source = marketwatch