This summer's advent of direct flights from Shanghai puts hotels in preparation mode
POSTED: 1:30 a.m. HST, Jul 3, 2011
LAST UPDATED: 2:26 p.m. HST, Aug 5, 2011
Hawaii's visitor industry is rushing to prepare for the first wave of visitors that will arrive later this summer on direct flights from China.
Companies are ordering Chinese-language signs, printing marketing materials and putting Chinese inserts into menus throughout Waikiki. Hotels, luxury retailers, restaurants, interisland carriers and ground transportation companies are taking steps to capture as much as they can of this fast-growing market.
"We want to get ahead of the game before the deluge comes," said Conchita Arceo Malaqui, general manager of Retail Properties for Outrigger Enterprises' Waikiki Beach Walk, which is home to more than 60 tenants.
"Our merchants are excited to do what they can to greet these visitors appropriately and make them feel comfortable enough in Hawaii to want to come back," Malaqui said. "We know that we can't take them for granted."
The burgeoning China market has had a fragile albeit promising start in Hawaii. Though only 66,048 Chinese visitors came here last year, the Hawaii Tourism Authority reported that arrivals grew 57.5 percent from 2009. More than 30,500 Chinese visitors came to Hawaii through May, and by year's end could top 80,000, the HTA said.
China Eastern Airlines said last month it intends to begin twice-weekly nonstop service between Shanghai and Honolulu on Aug. 9.
The flights are expected to add only another 12,198 visitors this year. However, many in the visitor industry see these flights as their first opportunity to make inroads into the lucrative China travel market. In the past, obstacles such as a lack of direct flights, cumbersome visa policies and limited visitor marketing in China made Hawaii a hard sell.
An easing of restrictions in 2008 allowed travel agents their first opportunity to market leisure travel in China. The Chinese outbound travel market grew to 40 million in 2009, with about 45,000 Chinese visiting Hawaii.
With the flight impediment removed, HTA anticipates that annual arrivals from China will surpass 100,000 by 2013. The China projections are still a long way from the 1.2 million Japanese visitors that visited the isles in 2010.
The tourism industry considers the Chinese tourism cycle to be where the Japanese tourism cycle was 25 years ago, said Sam Shenkus, director of marketing for The Festival Cos., which manages Royal Hawaiian Center.
"We are all excited about this market," Shenkus said, adding that the center, which already has a Chinese website, signage and marketing collaterals, is bringing in a Chinese-speaking intern this summer to build merchant language and cultural skills.
Direct flights are a step in the right direction, said Angela Vento, regional director of sales and marketing for Starwood Hotels & Resorts Worldwide Inc. in Hawaii and French Polynesia.
"The direct flight means that there is an interest and a commitment from companies to get people here," Vento said. "Direct service is essential because it makes the trip manageable and will encourage more Chinese travelers to come to Hawaii."
Direct flights are needed to build arrivals from China so that the market can qualify for visa waiver status, an essential step for future growth, she said. Hawaii saw increased opportunities in the Korea market once the onerous visa process was lifted, Vento said.
As it stands now, a Chinese citizen wanting to visit the U.S. must appear in person before a U.S. consul official to obtain a visa. With only five U.S. consulates in the country, that requirement can be a significant hurdle.
"A visa waiver would facilitate travel and make it that much easier for the Chinese to get here," Vento said. "We saw airline access to Hawaii from Korea and visitor arrivals from that market grow once the visa waiver came."
While multiple carriers offer direct service between Korea and Hawaii, China Eastern, with the backing of Ctrip and Utour China travel sellers, is the first carrier to offer direct service from China. Hainan Airlines has had approval to fly between Honolulu and Beijing since 2009; however, the company has cited visa requirements as a "formidable barrier to travel to the U.S."
It's important that Hawaii work with China Eastern and its travel partners to nurture the market, Vento said.
"Our ability to maintain these flights is critical to what the future will hold," she said.
Keeping these visitors satisfied once they arrive is important, as well. As a result, hotels like Hilton Hawaiian Village have hired Chinese-speaking staff, and some, like Aston Hotels & Resorts and Starwood Hotels & Resorts, have opened sales offices in China.
"It was quite an investment to open those offices without flights," said Shari Chang, senior vice president of sales, marketing and revenue management for Aston Hotels & Resorts. "However, in retrospect it was extremely fortuitous. Having people on a daily basis in China to answer questions is very helpful."
A few chains, like Starwood and Outrigger Hotels & Resorts, also have opened properties in China or are developing hotels there in the hopes that brand recognition will encourage Chinese visitors to book their resorts here.
Starwood's top executives in White Plains, N.Y., have temporarily moved their headquarters to Shanghai through July 11 to oversee a whirlwind opening of hotels, Vento said.
"We open a new hotel in China every two weeks during that period," Vento said, adding that Starwood will soon have 180 hotels in China.
Outrigger will open a new resort on Hainan island in four years and is scouting more opportunities in China, said Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises Group.
"One of the values of having a property in China is the ability to offer the Outrigger experience in their domestic market," Wallace said. "While they are there, we can offer the opportunity to come visit in Hawaii."
C.J. Chen, chief executive officer of BCM International, a Web design, translation and China marketing company, said China has the potential to overtake Japan as Hawaii's top international market. Arrivals from China are still low compared with those from Japan, but their per person, per day spending is the state's highest, Chen said.
"They drop over $350 a day — that's way better than Japan, so everybody is excited about that," said Chen, who has seen his consulting business grow in the last few years from a startup to one that works with more than 70 percent of local hotels.
"Those that don't take steps now to prepare for this market will regret it later," he said.
The timing could be right for China's market to accelerate much faster than Japan's did in the 1980s and 1990s, Wallace said. Chinese travelers are sophisticated, and today's marketers have the advantage of better technology and more globalization, he said.
"These entrepreneurs know what they are doing," Wallace said. "They are making large bets that they can do this, so we are glad to give them terrific rates to open up the doors."