China

In 2009, CTTC opened three new full representation offices in the People’s Republic of China in the cities of Beijing, Shanghai and Guangzhou. Already, China is one of California’s top international markets with 273,000 (-9%) visitors in 2008. Chinese are the number one spenders among the primary and secondary markets, with average spending of $1,459 per trip and an economic impact of more than $398 million. In June 2008, China and the United States signed a memorandum of understanding that allows China-based tour operators to market and promote leisure travel to the U.S. With nearly 40 million outbound Chinese travelers (less than 3% of the population) and expected growth to 50 million by 2010, visitation to the U.S. is projected to continue to grow at double-digit growth well into the next decade. California already has 55% market share of all Chinese traveling to the U.S.

One unique characteristic about this travel market is that almost 88% all outbound travel comes from three markets: Beijing (27%), Shanghai (39%) and Guangzhou (23%). Because of the enormous scale and diversity of the Chinese travel market, each three markets can be considered as separate entities with unique consumers and market characteristics. Since long-haul outbound travel is still relatively new to most Chinese, the travel trade plays an important role in promoting overseas destinations. China has officially registered 400 companies that are allowed to sell long-haul travel product. It is CTTC’s strategy to focus on the top 40 producing tour operators that have a reputable and proven track record.

China is considered an emerging market, and it is the gateway cities of Los Angeles and San Francisco that will immediately benefit from this new and rapidly growing market. However, there is still a strong interest in seeing and experiencing as much as possible in a short amount of amount of time. Complementing the gateway experience, CTTC also features select experiential theme products: theme parks, shopping, national parks & world heritage sites, wine & food, and art & culture. With such a complex and competitive media landscape, CTTC has focused on key target markets to hone messaging and make the best use of available funds. Consumer market research conducted in October 2008 identified the following three core target audiences that tested most responsive to California product, messaging and creative: Business + Leisure Travelers (30% of market) and Middle to Upper Income Leisure Travelers (10% of market).

Two Year Plan
Year 1
Capitalize on the June 2008 memorandum of understanding to promote leisure travel to California via the Chinese travel trade and media. Develop basic tools for the travel trade, both online and offline; focus on introducing a wide range of new California tour products in market; and rapidly expand media visibility via unpaid media coverage through private and public communication channels.

Year 2
Develop proactive co-ops with major Chinese travel trade, airlines, media and consumer brand partners, establishing high visibility California promotions in the market. Ensure California products are available at all major travel agents. Focus on expanding California package with a strong reliance on the gateways of Los Angeles and San Francisco.

Key Strategies

• Capitalize on the implementation of June 2008 memorandum of understanding to promote outbound leisure travel.
   
• Establish and enhance strong government to government business relations between California and China.
   
• Focus on core markets of Beijing (27%), Shanghai (39%) and Guangzhou (23%), based upon outbound travel, population and infrastructure.
   
• Target corporate + leisure travelers, along with high-income consumer segments.
   
• Focus on developing new tour California exclusive products that highlight the gateways of Los Angeles and San Francisco.
   
• Leverage TV and Web exposure opportunities.
   
• Intensify online promotions with local market portals.