Increased Outbound Travel, More Spending On Gold And Jewelry Expected This Year
With celebrations of Chinese New Year in full swing, major luxury brands and retailers expect to see a boost over the next month as more wealthy Chinese and outbound tourists open up their wallets. Considered one of the most auspicious years in the Chinese Zodiac, the run-up to the Year of the Dragon 2012 has seen brands around the world rush to create China-only limited editions catering to the country’s emerging luxury consumer, while national tourism authorities have worked to promote outbound travel to China’s notoriously free-spending tourist-shoppers.
Though we’ve recently seen such efforts in places like Hong Kong and Seoul, the likes of London, New York and elsewhere are hoping to benefit from an anticipated rise in luxury spending during Year of the Dragon festivities. As the Australian notes today:
As with Christmas in the West, the Chinese new year is seen as a stimulus to consumer spending, a time when families and friends spend extravagantly on presents, clothes, food and decorations. At the most luxurious end of the market, dragon-themed purchases include Rolls-Royce’s red Year of the Dragon Phantom, with seat coverings embroidered with dragons and door sills announcing “Year of the Dragon 2012″ in lights. Despite a price tag starting at $1.1 million, the car has already sold out.
In London, luxury brands and high street retailers are keen to tap into the relatively new cultural trend of traveling overseas during Chinese New Year, rather than following the tradition of heading home to celebrate with relatives. As retail analysts Global Blue recently reported, the easing of travel restrictions was instrumental in the 64 percent growth in spending by Chinese tourists in the UK last year, a trend that saw their spending total £165million (US$256.5 million).
Hoping to continue this momentum, retailers in London shopping hotspots like Bond Street have rushed to hire more Mandarin-speaking staff, while landmark department stores like Harrods have installed UnionPay terminals to accept the only domestic Chinese debit and credit card.
Mark Di-Toro, from VisitBritain, said: ‘The first half of 2011 witnessed a record high in outbound tourism from China. The UK is already benefitting from these high spending visitors who are coming to Britain to shop in their droves.
‘In the West End, Chinese shoppers are reported to spend an average £1,310 during a trip with half of Burberry’s sales in London coming courtesy of Chinese tourists.’
Gordon Innes, chief executive of London & Partners, the capital’s official promotional organisation, said: ‘With its large population, strong economic growth and growing social mobility, China is viewed as a lucrative tourism prospect.
‘In the year ending September 2011 visitor arrivals increased by about 40per cent with the average stay length among Chinese visitors twice the average of all overseas tourist – making them prodigious spenders.’
While luxury brands and retailers in the UK chase what they’re calling the “Peking Pound,” the US is making moves to bring in the “Beijing Buck” by streamlining the visa application process and encouraging more tourists from China, as well as Brazil and other emerging nations. Aimed specifically at enticing more of these travelers to shop in the US rather than Europe, last week President Barack Obama signed an executive order tasking the State Department and Department of Homeland Security with beefing up the visa processing capacity for visitors from China and Brazil by 40 percent this year, an effort that is expected to see 80 percent of non-immigrant visa applicants get their interviews within three weeks of submitting their documents.
As Bloomingdale’s chairman and chief executive officer Michael Gould said last week, “Anything the government could do to facilitate visitors to the U.S. is an enormous positive.” Noting the massive number of Chinese tourists he saw in Paris and London after Christmas last year, Gould added, “We need to make the Chinese, the Brazilians and tourists from other countries feel more welcome [in the US].” As sources told My Retail Media, tourists — including both international and domestic travelers — account for somewhere between 25-30 percent of sales at Bloomingdale’s 59th street flagship in Manhattan.
With the focus in major tourist destinations like New York now on attracting more Chinese tourists, we’re seeing this motivation manifest in new and interesting ways. While Chinese tourists have flocked to New York in record numbers in recent years, spending an estimated $877 million in the city last year alone, those traveling independently have often been left to their own devices. In November, looking to tap demand for recommendations among China’s well-heeled outbound travelers, YUE magazine launched in New York, and this week, the membership-based network Affinity China is presenting Dragon Week in New York, a series of exclusive events catering to high net worth Chinese tourists.
With the visa application process expected to gradually ease and cities like New York offering customized resources for China’s growing ranks of outbound travelers, US destinations may catch up to — or surpass — their European counterparts sooner than we might expect.