China's burgeoning moneyed class is hitting the road some 20 million traveled abroad last year, spending $48 billion on everything from hotel rooms to Louis Vuitton bags.
But for the most part they're not coming to Los Angeles.
Instead, much of the business has been lost to Las Vegas, where 90 percent of Chinese travelers coming into the United States stopped last year, lured by gambling and a far more aggressive marketing effort.
Also, Las Vegas has established itself as a serious retail center with venues such as the Forum Shops at Caesars that offer many of the same stores as Rodeo Drive in Beverly Hills.
The success of Las Vegas in luring the Chinese highlights a strategic difference between its approach and that of L.A. tourism officials.
In June, the Nevada Commission on Tourism capped a yearlong effort to establish a beachhead in China when it opened a tourism office in Beijing. It was the only state to win approval for such an outpost.
"There are upwards of 100 million to 300 million Chinese people emerging into middle class who have the money and have an interest in traveling," said Chris Chrystal, spokeswoman of the Nevada tourism office. The country has a population of 1.3 billion, and "if you only got a tiny percentage it would still be very significant," she said.
LA Inc., the convention and visitors bureau, has yet to establish an office in China. Only within the past year has it signed a contract with a Chinese representative to gather market intelligence.
The local visitors bureau is still focusing on the recovery of Japanese and Korean tourism lost in the wake of the Sept. 11, 2001 terrorist attacks. Japanese tourists to Los Angeles spent $302 million last year, off from $486 million in 2001, a year in which the last three and a half months were essentially lost to the industry.
The United States doesn't have approved destination status from China's National Tourism Administration, which means organized tour groups can't come into the U.S. from China. Individual tourists from China wishing to visit the U.S. must first apply for a visa.
In 2003, 45 percent of visitors to L.A. from China were here for business purposes, 24 percent came for leisure travel, 23 percent to visit with friends or relatives, 4 percent for conferences or conventions and 3 percent for study or teaching purposes, according to LA Inc.
Even if more tourists were interested in a visit to Hollywood, there are obstacles starting with a limited number of direct flights.
"You can create all the demand in the world, but if you haven't got the distribution system to satisfy demand, that's futile," said Michael Collins, LA Inc.'s executive vice president.
Recent steps, such as a July air services agreement, will permit a nearly five-fold increase in U.S-China air services over the next six years.
Until this year, the only U.S. carriers permitted to offer direct flights between the two countries were Northwest Airlines Corp. and United Airlines, and while both carriers offer connecting service between LAX and China, neither appears to be loading up on L.A flights.
Northwest added a route between L.A. and Guangzhou via Tokyo in October and United, which was granted an additional seven flights per week, chose to add daily service between Chicago and Shanghai. The carrier now has two direct flights from Chicago to China, two from San Francisco and none from Los Angeles. American Airlines is seeking approval to add a Chicago to Shanghai route, and Delta Air Lines, which has an agreement to sell seats on China Southern Airlines out of Los Angeles, is trying to add an Atlanta to Beijing flight.
Los Angeles snags some share of the Chinese tourist market, even if it comes as a side trip to Vegas. Through the first six months of 2004 there has been a 64 percent increase in the number of Chinese visitors from the year-earlier period, putting the region on track for 57,000 visitors.
L.A.'s limited efforts come as the number of Chinese tourists is expected to grow by 12.8 percent annually through 2020, three times the world rate and on pace to hit 100 million, according to the World Tourism Organization, a United Nations agency.
Still, the Chinese leisure tourist remains an elusive target for the United States. Since China's National Tourism Administration has not given blanket approval to the U.S. as a destination, passports have been mostly limited to businesspeople, students or those with relatives overseas who are willing to sponsor them.
"It's an opportunity we can't convert on," said Jack Kyser, chief economist of the Los Angeles County Economic Development Corp. "You just have to gnash your teeth."
As recently as seven years ago, China forbade leisure travel. After granting approved destination status to primarily Asian countries, the China National Tourism Administration on Sept. 1 added 26 European destinations to the list of approved destinations. The U.S. has not applied for this status.
Bloomberg News contributed to this story.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- TOURISM - Japanese Jet To Las Vegas, Missing L.A.
- Big Fan of China
- Hainan Airlines Launches Changsha-Los Angeles Route
- LAX Losing International Business
- Visa Reform Deserves Welcome Mat
- East Meets West, Again; Enticed by Great Deals, Japanese Return to L.A.
- Executive Summary / The Pacesetter
- Asian Accents