A veteran in the travel and tourism industry within the United States, Jake Steinman, Founder and CEO of North American Journeys, has seen many changes including the emergence of China as one of the largest overseas source markets for inbound tourism to the United States before it even took off. Jing Travel spoke to Jake about his experiences and his thoughts on the China tourism outlook over the next few years.
Tell us more about yourself, how you got into the travel and tourism industry, and what you do today.
I sold a publishing and event company in 1993 and was too young to retire so I wanted to do something where I could write off travel, which was a passion of mine. The first event we created was Active America Travel Japan which was designed to promote Japanese travel to the United States for sports activities like golf and skiing and was sponsored every year by Northwest Airlines. This event went on for 19 years and in 2009, when Northwest merged with Delta, they wanted us to create a similar event for the Chinese market. Today, Active America China is the largest of the five boutique trade shows that we produce, along with two industry newsletters and the trade website www.touroperatorland. All of our products can be found at www.northamericanjourneys.com
What’s changed in just the last five years in the China to U.S tourism market?
The Chinese inbound market at first followed the early days of Japanese market—tightly structured groups using standard tour itineraries in a few cities with operators making commissions on attractions and shopping venues that catered specifically to Chinese visitors. It then began to mature exponentially faster than the Japanese market. The primary changes are the growth of mobile research, and with that, the emergence of independent travelers, the trust they put in user-generated content and reviews when they select places to visit; and the Chinese diaspora spread throughout North America opening many new cities to Chinese travelers. Additionally, many Chinese send their children to the United States for English study programs that they have become a formidable category to pursue.
What changed in just the last two years?
In order to deliver value to Chinese free independent travelers (FITs), receptive operators are offering tailor-made tours where they can rationalize higher fees. The incredible growth of direct air service to and from second and third-tier cities in both China and the United States and the growth of mobile payment systems in the United States such as Apple Pay that will eventually expand into Chinese systems such as WeChat and Alipay. Also, Chinese shopping has moved from deluxe to more mainstream brands, and standard budget tours are no longer profitable.
What missteps do you see over and over again by suppliers in the travel and tourism industry?
What I see is suppliers misreading “signals” given by Chinese buyers during appointments and meetings. For example, nodding their head doesn’t mean they want to buy, it means they understand or that they’re too polite to ask further questions. Also, so much follow-up just seems to go down a rabbit hole because the Chinese buyers don’t really buy directly from suppliers (although they try to do so to see if they can get a lower price). It’s easier for them to buy through receptive tour operators who not only package everything for them but function as financial intermediaries who are willing to wait 60-120 days for payment.
The other misstep is that people jump into the Chinese market because it’s the flavor-of-the-month or their boards and managers push them into it prematurely so they can say they’re in China. They need to understand how to develop a product that the Chinese want to buy first and then craft a story around the product in a way that Chinese buyers and travelers will find it useful. Also, the shopping centers pursuing Chinese visitors that are most successful are outlet malls en route between gateway cities and national parks or those that have the budget to pursue social media marketing tactics that reach FITs.
What do you think Chinese travelers want U.S. destination marketing organizations (DMO) to know?
I feel that the best thing a DMO can do is to produce a “Free Wifi Hotspot” map outlining the places they can connect when they are in the market. Also, though it may sound counterintuitive, it’s easier to find destination and supplier information on WeChat and other social media than on a dedicated Chinese website because these sites aren’t updated in real time by traveling peers and therefore are not indexed by Chinese search engines as well.
Secondly, they want Chinese food for breakfast and local dining options for lunch and dinners, even more so if it’s been mentioned on WeChat. Lastly, with 60 percent of the travelers from China now traveling as FITs, they will probably not trust their Chinese language websites, and DMOs now have to become familiar with influencer marketing.
Who’s doing it right?
Among states, aside from Los Angeles, San Francisco, and Las Vegas, I would say Oregon, Utah, and Wyoming are the states doing well with FITs after having “sculpted” their products in a way that the Chinese are finding them useful and educating their industries. The Florida Keys is another DMO that has been successful. Chinese patrons to the Stone Crab, a seafood restaurant that actually brought the fisherman in to educate them about the catch of the day, posted about the restaurant on social media and since then the restaurant exploded with Chinese visitors. The Florida Keys destination marketing organization leveraged that into a full-blown Chinese outreach program at Active America China Summit last year and other shows.
How do you think the expected influx of Chinese tourists will change the industry?
It already has as most of the marketing momentum from the industry is focused on the Chinese industry and, oddly, the number of receptive operators keeps expanding.
Is there anything else you’d like to add?
What keeps me up at night is if our administration’s trade policies and bellicosity somehow trigger a travel ban from China and modeling how long it will take to return to normal flow of travel. Additionally, what’s missing right now with digital marketing options in China is the ability to link it directly to bookings and sales. Given that nearly 100 percent of Chinese travel with their smartphones, eventually WeChat and Alipay will probably be able to track where they visit with some high degree of accuracy.