Betsy Wall, Executive Director FOCUS ON CHINA Friday, December 14th Hall of Flags, State House Boston, MA Betsy Wall, Executive Director

PROGRAM OF EVENTS 10 – 11am Overview of China Visitation Data & Visitor Profiles 11– 11:45am Overview of the Chinese Leisure Market & the Tour Industry in China 11.45 – 12.30pm Lunch break 12.30– 1.30pm The Chinese International Student in Massachusetts – A Primer 1:30– 2:30pm Panel of Experts - Understanding the Marketplace 2: 30 – 3pm Q & A

US-China Group Leisure Travel Memorandum of Understanding (MOU) signed December 11, 2007 US Travel Destinations are allowed to market their brands in China Increase in number of Chinese tourists to the US Chinese travelers will become more familiar with different US destinations

China inbound tourism to the US is the fastest growing tourism source to the USA and will continue to be so for the foreseeable future.

US Government granted Chinese visitors ‘Approved Destination Status’ (ADS) visas Stated Goal of the U.S. Dept of State “Increase non immigrant visa processing capacity in China and Brazil by 40 per cent in the coming year’ Recognition of Obama Administration to both protect US borders but nurture international visitation

What Are The Facts?

International Traveler Spending from United Nations World Tourism Organization OUTBOUND!

Top Origin Markets for International Travelers to the U.S. Origin of Visitor 2011 2011/2010 12/11 May YTD (000s) (% change) (% change) International Total * 62,711 5% 6% 1 Canada 21,337 7% 4% 2 Mexico 13,491 0% 5% Overseas ** 27,883 6% 9% 3 United Kingdom 3,835 -0% -2% 4 Japan 3,250 -4% 14% 5 Germany 1,824 6% 12% 6 Brazil 1,508 26% 19% 7 France 1,504 12% 5% 8 South Korea 1,145 3% 12% 9 China (PRC) 1,089 36% 42% 10 Australia 1,039 15% 6% Here’s the performance by the top origin markets in 2010. 2010 Highlights: * 9 of the top 10 countries posted increases United Kingdom posted the only decline * 7 of top 10, and 13 of top 20 posted double digit increases * Record for 6 of top 10; 9 of top 20. * International travelers include all countries generating visitors to the U.S. ** Overseas includes all countries except Canada and Mexico. Record year for travel to U.S. 8

Top Travel Export Markets ($billions of 2011 receipts) Travel Passenger Total Travel Receipts Fare Receipts Origin Country 2011r Receipts 2011 Canada $19.4 $4.6 $24.0 Japan $10.1 $4.6 $14.8 United Kingdom $9.0 $3.0 $12.0 Mexico $6.4 $2.8 $9.2 Brazil $5.9 $2.6 $8.5 China $5.7 $2.1 $7.7 Germany $4.9 $1.4 $6.3 Australia $4.3 $0.7 $5.0 France $3.8 $1.2 $5.0 India $3.1 $1.3 $4.4 South Korea $3.7 $0.1 $3.8 U.S. TOTAL $116.1 $36.6 $152.7 In comparison, here are the top 11 travel and tourism export markets for the U.S. Travel exports are made up of travel receipts – the in country spending and passenger fares – the money non-residents spend on U.S. carriers to fly to the United States. 2011, China was one of 5 top 11 travel export markets to set a record. (Australia, Brazil, Canada, China and Korea set records) Whereas China was 9th in arrivals they are 6th in spending. Of the total travel receipts in 2011, Chinese travelers spend more per traveler than any of the top 11 markets shown here. In 2011, their spending per travelers was over $7,100. r = revised

Chinese Visitors & Spending (1997 – 2011, current $’s) In 2011 visitor volume was a record 1.09 million, while spending was a record $7.74 billion. visitors (000s) spending ($billions) Visitors (lhs) Spending (rhs) Sources: Department of Commerce, Office of Tourism Industries; Department of Commerce, Bureau of Economic Analysis

Chinese Traveler Superlatives Since 2007 (1st new record among current string of records) Including 2007, five consecutive visitor volume records—one of the longest record strings; Highest visitor volume growth rate—by far—among top 40 origin markets (174% vs. 136% for Brazil); 3rd-highest visitor growth volume among all countries (700k vs Canada’s 3.6m and Brazil’s 900k); Highest visitor spending growth rate (187%) vs Brazil (170%); 3rd-highest growth spending volume among all countries ($5b vs Canada’s $7.6b and Brazil’s $5.3b);

Chinese Visitors’ Top U.S. Ports of Entry 5 #5 Blaine, WA 74k (6.8%) #3 Chicago (ORD) 129k (11.8%) 3 #2 San Francisco (SFO) 166k (15.2%) 4 6 2 #4 New York (JFK) 119k (10.9%) 1 Los Angeles (LAX) 18.50% 201,497 2 San Francisco (SFO) 15.20% 165,682 3 Chicago (ORD) 11.80% 128,960 4 New York (JFK) 10.90% 119,019 5 Blaine, WA 6.80% 73,673 6 Newark (EWR) 5.40% 58,413 7 Detroit (DTW) 5.20% 57,038 8 Honolulu (HNL) 4.60% 50,084 9 Seattle (SEA) 3.60% 39,450 10 Washington (IAD) 2.60% 29,244 1 #6 Newark (EWR) 58k (5.4%) #1 Los Angeles (LAX) 201k (18.5%)

Top Cities

Key Activities

Activities, continued…

International Visitors to the U.S. and Projections (2000-2016) Arrivals in Millions Before we get to the forecast for the top Asian markets and specifically for Korea, here is the big picture for travel to the U.S. over the next several year. This forecast was issued in April 2012 and revises downward the October 2011 forecast as have most other forecasting entities. The blue bars are actual arrivals and the bars in red our the current revised forecast. As you can see, we plan to set new records for total arrivals for the next several years posting 4 to 5 percent growth each year. This is still in line and actually slightly stronger growth than the United Nations World Tourism Organization forecasts in its latest forecast for global travel. They like us revised downward the forecast for global travel over the next several years, but both of us show growth. Let’s look at Asia and specifically Korea Sources: U.S. Department of Commerce, ITA, Office of Travel & Tourism Industries; Secretaria de Turismo (Mexico); Statistics Canada. -- April 2012 forecast

OTTI Travel Forecast Inbound Travel to the U.S. from Asia China is forecast to see high single digit growth in its GDP growth over the next several years. The currency exchange rate will remain stable and falling slightly. China will continue to move up the rankings each year and by 2014 is projected to be the 5th largest arrival market, ahead of Brazil, Germany and France. The growth rates for China will greatly exceed that of any of the other markets within the region as you can see, but it will also be faster than any of the other 40 countries we forecast. Source: OTTI - April 2012 forecast

Forecast for Chinese Visitation to the U.S. It only seems fitting to go to the fortune cookie for this market…

What does this mean for MA?

Chinese MA Numbers Visitation to MA: 139,000 visitors Est. Visitor Spending: $285 million State & Local Taxes: $18 million

Massachusetts prestigious academic institutions are critical to the image of the state in China Prep Schools Undergraduate courses Postgraduate courses Executive Training Business Investment

MOTT Moving Forward in China Capitalize on Brand USA partnership as they develop marketing strategy for China Strengthen relationships with Chinese receptive operators and tour operators Coordinate MA presence at key China trade shows Host press trips and trade familiarization trips Invest in social media & promotional presence

International Marketing Program Questions? Betsy Larkin Senior Manager, International Marketing Massachusetts Office of Travel & Tourism Betsy.Larkin@state.ma.us