Trade Deal Opens Door To Chinese Tourists

U.S. Treasury Secretary Henry Paulson listens to Chinese Vice Premier Wu Yi's speech during the Third China-U.S. Strategic Economic Dialogue at Grand Epoch City in Xianghe, central China's Hubei province, southeast of Beijing, Wednesday, Dec. 12, 2007. AP Photo/Andy Wong

Chinese citizens flush with cash from their booming economy will find it easier to vacation in the United States following a long-awaited agreement that the American travel industry hopes will bring in billions of dollars.

The deal, signed Tuesday by U.S. Commerce Secretary Carlos Gutierrez in Beijing, will allow Chinese travel agencies to market packaged leisure tours to American destinations, and it will permit U.S. destinations to advertise directly to the Chinese public.

With the number of Chinese who travel outside their homeland expected to nearly triple to 100 million people by 2020, an infusion of tourists to the U.S. could help American businesses.

"Potentially in the next 10 years, they could blow out all our other markets," said Bruce Bommarito, vice president of international market development for the Travel Industry Association, a U.S. business group.

Chinese travelers on average spend upward of $6,000 per visit to the U.S. - more than residents of any other nation - according to the Commerce Department's most recent calculations.

Bommarito and other industry players have lobbied heavily for Tuesday's accord, which they believe could open the floodgates for Chinese travelers, who often prefer to book the kind of group tours the agreement will facilitate.

While only 1 percent of Chinese who left the mainland last year headed to the U.S., a new study shows that many consider the U.S. their top vacation dream destination.

In an October survey of 7,000 urban Chinese who were asked what country outside of Hong Kong and Macau they would choose to visit if they were unhampered by any practical considerations, the U.S. was the No. 1 choice, followed by France and Australia.

Participants in the survey, paid for in part by the American travel industry and by the Commerce Department, were contacted by random telephone dial and were not told that the survey was American-sponsored.

While any Chinese person able to obtain a U.S.-issued visa has for years been permitted to travel to America, perceived difficulties at U.S. consulates and misperceptions about visa rules have dissuaded many potential tourists, Bommarito said.

Without the "approved destination status" that Tuesday's agreement confers, U.S. tourist hot spots were unable to open tourism offices in China or advertise directly to the Chinese public. A few cities and states, including Nevada and New York City, negotiated individually with the Chinese government for permission to sidestep some of those restrictions.

Of course, Chinese residents will still need to obtain visas from the U.S. before they can visit, a process that many have found daunting. Consulates have dealt with concerns that some Chinese might not return home from their vacations.

But according to the State Department, the process has already been getting somewhat easier for prospective visitors. One in 5 mainland applicants for a business or tourist visa were denied their request in fiscal year 2007, down from 1 in 4 the previous year.

"China is so huge, and there are so many people traveling in such large numbers, and they like to travel in groups," said Deborah Harrison, senior vice president at Marriott International Inc. "They are also earning more money and they're able to spend it, and I think that destinations such as L.A. and New York and Washington and Las Vegas will really benefit."

Marriott International Inc. has already launched a Chinese-language Web site and has opened 30 hotels in China, partly in an effort to increase brand awareness among the Chinese.

The Commerce Department says it's too early to predict the economic impact of the agreement. In part, the results will depend on how quickly the private sector acts to take advantage of the agreement and on whether the U.S. is able to smoothly handle an increase in visa requests.

Even without the new agreement, the Commerce Department had already predicted that the 320,000 Chinese who came to the U.S. last year would grow to 579,000 by 2011 - but travel industry observers say the number could rise far beyond that.

Still, there is plenty of work remaining.

"The tourism industry here is going to have to also get prepared for handling Chinese visitors, because they do not for the most part speak English," said Noel Irwin Hentschel, CEO of tour operator AmericanTours International.
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