Travel industry trying to counter trade war
Chinese middle class lucrative to tourism
WASHINGTON — Washington, D.C., has dangled hotel discounts tied to the Chinese Lunar New Year.
Arizona has promoted its outdoor attractions to draw visitors during another popular Chinese holiday.
San Francisco has expanded its social media presence on Chinese apps to market year-round travel to millennial tourists.
Across the country, the U.S. tourism industry is trying to counter one of the casualties of the trade war with China that is still raging despite a temporary truce this month: A drop in the flow of affluent Chinese visitors to the U.S. As the conflict has dragged on for 15 months with no meaningful breakthrough, the travel industry is trying to minimize the damage.
It has good reason. An enlarged Chinese middle class has become a lucrative market for the U.S. travel industry. Close to 3 million Chinese tourists visited the U.S. last year. And they spent liberally: An estimated average of $6,700 per person per trip — exceeding the average spending of international tourists by more than 50% — according to the U.S. Travel Association.
Concerns among U.S. tourism agencies have grown as Beijing has warned that Chinese travelers to the United States may face harassment. Compounding the problem is increased difficulty in obtaining U.S. visas.
The number of visitors from China dropped nearly 4% in the first half of this year after a nearly 6% drop in 2018. More broadly, the U.S. share of the global travel market has slipped in the past year, and travel and hospitality groups blame the trade conflicts and intensified competition from rival countries. To close the gap, they’ve urged the government to extend funding for the U.S. national tourism marketing agency and to work more closely with overseas trade fairs and tour groups.
At the same time, tourism marketing agencies for states and cities are hedging their bets by intensifying their outreach to countries other than China. Utah and Los Angeles, among others, are trying to expand their presence in nations like India, whose large and youthful middle class is seen as a potentially rich source of tourist dollars.
Yet there is no easy way to replace a drop in Chinese tourism. Some U.S. tourism agencies say they worry that Chinese travelers feel unwelcome in the country under the Trump administration. Warnings from Beijing about traveling to the U.S. have likely reinforced that view.
“With the trade war, with some of the travel warnings, with some of our visa challenges that we’ve had, we’ve seen a little bit of a dip in Chinese visitors,” said Theresa Belpulsi, a senior official at Destination DC, the city’s tourism marketing office.
Tourism is one of the few industries where the U.S. has enjoyed a substantial advantage over China. In 2018, Chinese tourists traveling to the U.S. spent $30 billion more than American tourists visiting China did. Yet that edge may be shrinking.
“The U.S. is just losing market share,” said Adam Sacks, president of consulting company Tourism Economics. “Something’s made the U.S. uncompetitive, and I would target the trade war as one of the reasons.”
Larry Yu, a professor of hospitality management at George Washington University, warns that once impressions of an unwelcome environment take hold, they’re hard to erase.
“The trade war creates a kind of environment in China that makes people think twice,” Yu said. “Even though we know that Chinese demand is high, the current environment makes people substitute the U.S. for another place.”