Wooing the wealthy tourist

Southeast Asia lures high-spending Chinese with shopping rewards, easier visas, exotic experiences.Come May and October — two of the three Golden Weeks in China and the peak periods for travel — tourism offices in Southeast Asia hope that their marketing initiatives have done enough to attract globetrotting mainland Chinese citizens to their shores.

Southeast Asia, like the rest of the world, is scrambling to capture as big a slice as possible of this lucrative and growing segment.

For most Southeast Asian countries, tourism represents a sizeable contribution to their GDP, or has the potential to do so. The World Travel & Tourism Council reported that direct contribution from the sector to the region’s GDP was expected to be $86.9 billion — or 4.2 percent of total GDP — in 2011.

In Malaysia, for example, the tourism industry accounts for 7.4 percent of GDP and is the fifth-largest industry in the economy. The 24 million-plus tourists that visited Malaysia last year generated over RM58 billion ($19 billion) in receipts.

In Singapore, tourism makes up 3 percent of the GDP. “The industry has enjoyed strong year-on-year growth in both visitors’ arrival and tourism receipts since 2009,” confirms Edward Chew, regional director, Greater China, Singapore Tourism Board (STB). The republic registered 13.2 million international visitors and S$22.2 billion ($17.6 billion) tourism receipts in 2011.

Proximity puts the region in good position to capture the Chinese outbound traffic. As they begin to venture beyond Hong Kong and Macao to explore other parts of the world, nearby Southeast Asian destinations like Brunei, Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam hope to become their natural next stops.

China Outbound Tourism Research Institute’s (COTRI) analysis of outbound travel trends in the third quarter of 2011 confirms as much. Malaysia, Thailand and Singapore were among the top 10 destinations for Chinese tourists, coming in fourth, seventh and ninth respectively. Phuket (in Thailand), Bali (in Indonesia) and Sabah (in Malaysia) ranked in the top 10 island destinations as well as top 10 destinations for self-guided tours; Singapore was also in the latter list. In addition, Chinese tourists include Bangkok, Singapore and Kuala Lumpur in the top 10 cities to visit.

A Malaysia Tourism Board (MTB) representative says in terms of the top 10 tourist receipts, China was in third place in 2010, contributing RM3 billion to Malaysia’s tourism revenue. This clearly shows the importance of the market to Malaysia’s tourism industry.

Chew reports the same: “China has consistently remained one of the top five visitor-generating markets for Singapore since 2004. Just last year, we received nearly 1.6 million Chinese visitors, representing a 35 percent jump from 2010.

Interestingly, the profile of the Chinese tourists in the region is evolving. It appears Southeast Asia is shedding its “cheap and good” image and attracting more sophisticated travelers with a penchant for shopping — especially for luxury goods — and new experiences.

Satima Tanabe, deputy general manager of Gaysorn Shopping Centre, a high-end shopping mall in Bangkok which receives about 6,300 Chinese tourists a year, says the center is seeing younger, better educated visitors who earn more. “They tend to spend on luxury products and prefer to travel on their own rather than join tour groups; so they spend more time learning about the destinations they visit,” Satima says.

Joyce Yap, chief executive officer of retail of Kuala Lumpur’s premium shopping mall, Pavilion, concurs. “Our Chinese visitors typically come from first- and second-tier cities and are more affluent. On average, they spend between RM2,800 and RM3,000 per person at the mall, primarily on well-known luxury fashion and beauty brands.”

To cater to the Chinese shoppers, both Gaysorn and Pavilion offer Mandarin-speaking concierge services. Pavilion has also tied up with China UnionPay to facilitate the use of Chinese-issued credit cards at the mall. The partnership has become a strong branding platform to reach out to Chinese travelers as well as a marketing tool to incentivize them to spend more and enjoy exclusive shopping rewards. Yap says they will also be looking at developing more Chinese cuisine options for their Chinese customers.

Similarly, STB reports a rise in spending in fine dining restaurants and high-end retailers by affluent Chinese tourists. “The diverse profile of visitors from China also means they are now looking beyond mainstream products and are seeking in-depth experiences to appreciate the country’s heritage and cultures,” says Chew.

Singapore’s two integrated resorts, Marina Bay Sands and Resorts World Sentosa, for example, are among the offerings that have whetted the interest of foreign visitors. “With our world-class accommodation, the region’s first and only Universal Studios theme park, along with a plethora of dining, shopping and entertainment options, we are well-positioned to cater to Chinese visitors who prefer a longer visit rather than a ‘touch and go’ approach to travel,” says Robin Goh, assistant director for communications at Resorts World Sentosa. A concerted effort is made to ensure Chinese guests feel at home, he says, and this includes dedicated Chinese brochures, collaterals, website, signage and having Mandarin-speaking team members on duty.

While Thailand started 2012 strong with a 7 percent growth in the tourism industry in January and a deluge of Chinese tourist arrivals, the possibility of more flooding and a recent bungled terror bombing in downtown Bangkok could mean that the fight for Chinese hearts and wallets will narrow down between Malaysia and Singapore.

Arrivals from China to the two countries have been on an upward trend in the last three years. In 2011, Malaysia attracted 1.25 million Chinese tourists versus Singapore’s nearly 1.6 million. On average, they spent approximately RM2,770 during their stay in Malaysia and S$1,200 in Singapore. Shopping accounted for 37.8 percent of overall spending in Malaysia, accommodation 27.6 percent, and food and beverages, 11.9 percent. Meanwhile, Singapore lived up to its reputation as a retail paradise with shopping taking up 50 percent of the Chinese visitors’ total expenditure while accommodation and food and beverages totaled 17 percent and 8 percent respectively.

Moving into 2012, MTB has set its sights on drawing in 1.3 million Chinese visitors, particularly of the high-spending type. It is intensifying initiatives to promote existing products while aggressively pushing niche products. Helicopter and golfing tours and high-end shopping at the newly opened Johor Premium Outlet are some of the attractions MTB is promoting to lure wealthy tourists.

This February, the Malaysian government moved to make it easier for the Chinese to enter the country — a crucial decision as COTRI reports visa services were found to be the key factor for Chinese when choosing a holiday. With the appointment of a joint-venture company to process visa applications in China, individual tourists and tour groups alike will no longer need to apply for their travel documents at the Malaysian mission in the republic.

Singapore, on the other hand, has trained its sights on the growing segment of frequent independent travelers (FIT). “Last year, we launched the ‘New Discoveries’ campaign in China, which focuses on customized offerings. This includes working with selected tour agencies to develop specific packages,” Chew explains.

The campaign spotlights hidden gems like the Ann Siang Hill and Haji Lane precincts where an eclectic mix of niche international and local designers can be found together with local dining favorites — off-the-beaten-path, in-depth experiences that more sophisticated FIT visitors prefer.

But mass tourism is not overlooked. Exciting developments like the Gardens by the Bay, the international cruise terminal, and the River Safari, Asia’s first river-themed wildlife park, will appeal to FITs and tour groups alike. Chew adds, “These, coupled with a calendar of events such as the Asia Fashion Exchange, Formula One night race, the World Gourmet Summit and the Annual Great Singapore Sale continue to attract both first-time and repeat visitors to Singapore.”

The general consensus is that Southeast Asia wants quality, high net-worth travelers to make the region part of their holiday plans. Yap concedes that the biggest Chinese spenders will likely flock to Europe and the United States first but she hopes Southeast Asia will draw the wider middle-class on their initial sojourns out of China.

“We have not fully tapped the Chinese market. Hopefully airlines will add more routes and reach other cities within China to bring in more tourists,” she says.

Source - chinadailyapac