B.C.’s Chinese Tourism Boom

Chinese tourists in B.C. | BCBusiness
More than 200,000 Chinese visited B.C. last year, many of them taking in iconic attractions such as the Stanley Park seawall and Lions Gate Bridge.

Since Beijing decided it liked us in 2009, granting Canada “Approved Destination Status,” the number of Chinese visitors coming to B.C. has exploded. The move is changing the way B.C. is marketed to the world, and is having a far-reaching impact on B.C. tourism operators

It’s the season of summer holidays and those hearty American, German and British tourists will be hitting the roads in RVs and rental cars, checklist in hand, to tackle the iconic attractions of B.C.’s great outdoors. Yet as important as this stereotypical adventurous tourist remains to the local economy, they are no longer the central focus of the folks who market B.C. to the world. These days the roads of Vancouver, Victoria and Whistler are increasingly clogged with busloads of camera-clicking, gift-shop-loving, hop-on-and-off tourists from Mainland China, a remarkable contrast to the independent Anglo-Euro adventure traveller of old. Last year Chinese visitors surpassed the United Kingdom, perennial second-place finisher to the Americans, with a whopping 203,100 visa entries to B.C.—up 26.1 per cent from 2012. Since 2009, there’s been a more than 100 per cent jump in Chinese visitors sleeping, sightseeing and dining in our province.

Two thousand and nine was a pivotal year because that’s when the Canadian government set aside differences with China over human rights concerns and earned a spot on China’s coveted list of nations with Approved Destination Status. With ADS in hand, travel to Canada was open to all ordinary Chinese citizens with financial means and no longer restricted to students, diplomats and business people. China has become the world’s biggest travel market, with more than 80 million tourists travelling annually and spending in excess of $100 billion worldwide. B.C. now wants its share, but the change in market has many implications, both positive and negative, for tourism operators and businesses across the province.

For inbound tour receptors such as Vancouver’s TPI Silkway—which organizes five- to eight-day-long bus and train tours of Vancouver, Victoria, Whistler and the Rockies, as well as eastern Canada—ADS coupled with a rapidly growing Chinese middle class has been a boon to business. “I’ve been in this business since 1999,” says Roy Chou, director of sales at TPI Silkway, from his Richmond office. “When Canada got ADS approved, it was a huge jump for operators like us.” In 2009 TPI handled 559 clients from Mainland China; the following year the company handled 2,561, and by 2012 that number had jumped to 7,000 (representing more than 1,100 per cent growth from pre-ADS days). The company has had to triple its Richmond staff, to 12, to accommodate the growth, as well as add four sales reps in China.

TPI Silkway is not alone. CAL Travel and Tours, which offers railway and bus tours, golf vacations, northern lights tours and other packaged trips to a Southeast Asian clientele, used to focus almost entirely on business and government travellers for its Chinese market; since the change with ADS, the Richmond-based operator has seen business from China take off. In 2009, Chinese nationals accounted for just eight per cent of the 2,670 clients CAL handled; last year the company made travel arrangements for 2,000 Mainland Chinese residents, representing half of its business.

As the share of Chinese visitors and their impact on B.C.’s $13.5-billion tourism economy grows, the province is seeing some high-profile investments in the hospitality sector from Chinese interests.

For Forebase International Holdings it was a matter of seeking the right property in the right market. Last October the company, based in Chongqing, China, bought Victoria’s luxury Brentwood Bay Resort and Spa for nearly $14 million. It’s the first North American investment for Forebase, which specializes in hotel real estate and has several properties in Mainland China. The company declined to comment about its investment; however, Randy Holt, vice-president of DTZ Victoria Real Estate Ltd. and the realtor who handled the sale for Brentwood’s former managing director Dan Behune and his partners, believes Forebase is on the hunt for other hotel properties in B.C.

“Brentwood was the company’s first investment in North America and I don’t think it will be its last,” Holt says.


Image: Hubert Kang
More than 200,000 Chinese visited B.C.
last year

Also last October, Richmond-based SSS International Travel Co. Ltd. got a development permit and unanimous approval from Nanaimo city council, complete with a 10-year property-tax exemption, to construct a $50-million, 240-suite hotel with a rooftop restaurant on the city’s waterfront. The group expected to break ground this spring, with an anticipated opening in 2016. SSS, which also declined an interview request, is a subsidiary of Suzhou Youth Travel Services Co. Ltd. and one of China’s largest travel companies, with annual gross revenues of more than $175 million. SSS’s Nanaimo investment is a bold effort to vertically integrate the supply chain by delivering clients to their own hotel, and the Vancouver Island city of some 80,000 is happy to play co-host.

“It’s a huge opportunity for us,” says Sasha Angus, CEO of the Nanaimo Economic Development Corporation, which helped broker the deal, adding that the hotel is expected to host 70,000 visitors annually.

In many ways China is a natural fit for the province’s tourism sector. As a Pacific Rim gateway, B.C. has a large and influential ethnic Chinese population, numbering more than 400,000. The history of the province is deeply entwined with China. Whether it’s the immigrant Chinese miners who worked the treacherous coalfields of Vancouver Island, labourers who helped forge the Canadian Pacific Railway through the rugged interior of B.C. or the shopkeepers and miners who populated the streets of historic Barkerville and the Chinatowns of Vancouver and Victoria, you don’t have to go far to unearth a history rich in Chinese heritage. Furthermore, Chinese visitors view B.C. as a safe, clean destination that’s easy to access; more than 50 flights from Mainland China are touching down every week at YVR.

Yet, although everyone is talking China these days, the Chinese tourist is still a relatively new and somewhat unfamiliar entity, at least in terms of how B.C. has marketed itself in the past. Destination B.C. (formerly Tourism B.C.) has traditionally traded heavily on B.C.’s boundless wilderness, adventure and natural appeal. These are the fresh-air attributes embodied by the “Super, Natural B.C.” brand, which has resonated very well with the Brits, Americans and Europeans, especially those of Germanic persuasion who seem to have an insatiable appetite for wild British Columbia. That’s not necessarily the case with the Chinese traveller; the wilderness and natural image of B.C. may appeal to them, but most tour operators with experience in the market say they’d rather spend their time experiencing it through the windows of a tour bus, between visiting sites of historical interest, dining and going on shopping excursions (bringing gifts back to friends and relatives is a cultural expectation). Outdoor adventure for the average Chinese tourist is a trip to Capilano Suspension Bridge or a ride up the Grouse Mountain gondola. They might go sport fishing for half a day, but whether or not they actually land a fish is secondary to getting a taste of the experience and being able to tell friends about it back home.

In the spring of 2014, under its new CEO Marsha Walden, Destination B.C. was undergoing a corporate strategy review that included a re-branding process that may see the “Super, Natural B.C.” tagline replaced by something that the organization says reflects the “changing consumer dynamics.”

“China is very, very important to us,” says Maria Greene, Destination B.C.’s director of overseas marketing. “There are three basic factors to consider: Can they get here? Do we have product they’re interested in? And are they travelling here now? The answer is ‘yes’ to all three,” says Greene. “I can’t confirm percentages right now but I can tell you that since China is our largest market after the U.S., we will ensure the budget adequately covers the marketing activities we would like to undertake in China this year.” (The organization spends $27,555,000 annually on all marketing activities, accounting for a little more than half of its total annual budget.)

While the opportunities for B.C. are obvious, the shift to the Chinese market is not without its challenges. Unlike other major in-bound travellers, the Chinese like to travel overwhelmingly in organized tour groups, typically restricting their B.C. experience to the Victoria-Vancouver-Whistler axis. Nationally, they have traditionally fallen into what Greene calls the classic “two, two and two category”: two days per province.

“We want them to stay longer in B.C. and also to get them out into other parts of the province,” she says. “We still have some work to do.”

Last winter, Destination B.C. was a partner at Canada Ski Café, a promotional venue sponsored by the Canadian Tourism Commission at Nanshan Ski Village, one of China’s largest ski resorts roughly 60 kilometres from Beijing. Destination B.C. was there touting the province’s 13 major ski resorts, but Greene says it’s too early to judge the success of the marketing push. Sun Peaks Resort—one of the resorts at Canada Ski Café—decided last January to celebrate Chinese New Year for the first time, with a parade, decorations throughout the village and Chinese-themed menu offerings at local restaurants. Christopher Nicolson, president of Tourism Sun Peaks, says the effort was targeted primarily at Chinese Canadians in the Lower Mainland, but with an eye to the potential for winter enthusiasts from China.

“The Chinese ski market is a long-term thing. It’s really in its infancy right now,” Nicolson says, noting that while he’s keen to prospect the new market, he’s far from willing to stake the future of Sun Peaks on Chinese tourists.

Image: Hubert Kang
Chinese visitors are increasingly important
to B.C.’s $13.5 billion tourism industry.

Investing in the Chinese tourist requires an understanding of some market and cultural idiosyncrasies. For example, according to Alice Lin, a director at CAL Travel and Tours and treasurer of the Canadian Inbound Tourism Association, “Chinese people want to do the most number of things in the minimum time.” Roy Chou of TPI Silkway says the Chinese also plan and book holidays last minute, unlike their European, British, American and Australian counterparts. This presents challenges for on-the-ground operators who want to engage with the Chinese market but have a booking system and tradition that requires advance reservations and often a non-refundable deposit—conditions that Chou says the Chinese tourist would find onerous. Diet is another issue: cold continental breakfasts often de rigueur at mid-range accommodations don’t cut it with Chinese guests. They want a hot breakfast and quite often prefer a traditional conjee, or rice porridge. Some operators in the mainstream North American hospitality industry have adapted operations to meet this demand. For example, in 2011, Delta Hotels and Resorts introduced “Ni Hao” at one of its Alberta properties. The program, which trains guest services personnel to greet Chinese guests in their own language and offer amenities such as slippers and tea in the rooms, has now been adopted at all of the chain’s B.C. and Alberta hotels.

Chou says such initiatives are important when it comes to interacting successfully with the Chinese visitor. He also says a substantial portion of TPI Silkway clients combine vacationing with fact-finding about education, business and investment opportunities, estimating that 10 per cent of the company’s guests end up making investments or immigrating to Canada. And the typical trip to Canada is changing. The Chinese visitor of old thought nothing of embarking on a frantic 10-day whirlwind cross-Canada tour starting on the West Coast and including stops at Banff, Toronto and Montreal. Chou says he is now seeing the emergence of niche Chinese travellers, for example driving clubs and camera buffs, looking to book trips in B.C. In addition, there’s an increasing interest in dedicated trips to just B.C. and Alberta rather than a coast-to-coast Canadian odyssey.

This is good news for the marketers at Destination B.C., souvenir shop owners and other operators that lie in the path of these bus tours, but not necessarily great news for the operators that have much more invested in the “Super, Natural B.C.” brand. It boils down to a rural-urban divide over how B.C. should allocate its tourism marketing resources. Beyond the Victoria-Vancouver-Whistler corridor, B.C.’s increasing obsession with the Chinese tourist market gets lukewarm reviews.

“Destination B.C. and the Canadian Tourism Commission are pulling resources away from traditional markets, which are the U.S., U.K. and Germanic Europe,” says Evan Loveless, executive director of the Wilderness Tourism Association, whose more than 80 member companies and organizations peddle a tourist product (sport fishing, adventure tourism, bear viewing and other nature-based ventures) that’s based mostly in the rural, remote reaches of the province. “Basically, the Chinese market has no relevance to the wilderness, adventure and ecotourism sector. They’re simply not calling to book trips with our members.”

Amy Thacker, CEO of the Cariboo Chilcotin Coast Tourism Association, shares the skepticism. She says B.C. has been down a similar road before with the Japanese and Taiwanese. In those cases, the market never matured to the point where travellers began booking trips in big numbers with the guest ranches, fly-fishing outfits and other nature-based operators that characterize her region, which flies by the catchy handle, “Land Without Limits.”

“For the most part we haven’t been a good fit for the Chinese market, with the exception of Barkerville,” Thacker says, referring to the refurbished Cariboo gold rush town with a strong historical link to China. “And I really don’t see great potential for us in that market.”

But with the tide of Chinese tourists now usurping traditional visitors from Europe and the U.K., it’s a market the province can’t afford to ignore. Back at the bustling Richmond offices of TPI Silkway Canada, Roy Chou sees no end in sight to his company’s growth potential, and believes one day some of those Chinese tourists might even be a force to be reckoned with on the slopes of B.C.’s ski resorts.

“I think there’s still huge potential. Vancouver is a gateway to the Pacific Rim and the rest of Canada,” Chou says.