This Week's Herman Trend Alert

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  The Herman Trend Alert

April 23, 2008

US Losing its Tourism Lead to China

For years, the United States has held the number one position as the world's most popular travel destination. However, according to the World Tourism Organization, by 2015 China will be number one.

Some hotel chains, including Wyndham Worldwide, are already making moves to capitalize on this trend. The chain opened its first hotel in Beijing in 2004. Since then, it has grown to have 67 properties in China, including Howard Johnson and Days Inn locations.

The chain Super 8 intends to double its mainland locations by the end of the year. According to Mitchell Presnick, Super 8 China's chief executive, "When economies experience this kind of growth, one of the first things that happens is people want to travel". (from BusinessWeek)

Overseas tourists are flocking into China to see the Great Wall and the Terracotta Soldiers in Xian. Interestingly, tourists seem to be unconcerned about the current unrest in Tibet. As the fourth most popular destination country, behind France, Spain, and the US, China enjoyed visits from 132 million tourists who spent USD$42 billion in calendar 2007.

One of the factors in China's tourism growth is the August Olympics, expected to attract 820,000 visitors from overseas. This year, China expects to have 150 million foreign tourists, an increase of 14 percent over 2007. In addition, the Chinese are increasing their domestic travel. This uptick is expected to spur tourism revenues to grow by some 18 percent, to reach $183 billion.

This increasing competition for the US travel industry, which employs more than 17 million people and generates $740 billion annually in economic activity, is why Tim Schneider of Schneider Publishing is backing a grassroots initiative for the National Tour Association to create an executive branch Office of Travel & Tourism.

The NTA will also push for the adoption of the Travel Promotion Act, which would provide funding to promote the United States as a travel destination in the international marketplace. Other countries have been strongly supporting tourism for years. Look for the US, in anticipation of the Boomer retirees' desire and resources for travel, to put some promotional dollars behind this long-overdue effort.

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