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Huan-yin ni dao Whistler

China granting Canada ADS opens potentially humongous new market for Whistler, but the key word is ‘potentially’

"Could it become 10 to 15 per cent of our market share in the next 10 to 15 years? That’s our hope."

— Barrett Fisher, president of Tourism Whistler

"We’re going to have to educate the business community on certain culturally sensitive issues and that’s a role the chamber can play. We can make sure we know how to deal with the destination visitor from China."

— John Nadeau, Whistler Chamber of Commerce president

 

If tourism professionals are right, Whistlerites might be greeting their newest batch of visitors with a hearty, "Huan-yin ni dao Whistler" (pronounced: Hwaan-ying-knee daw) thanks to Canada recently receiving Approved Destination Status from the People’s Republic of China. This new designation will allow Chinese leisure travellers, as well as existing business travellers, to come to Canada. However, when the Mandarin version of "Welcome to Whistler" will become part of resort workers daily lexicon won’t likely be determined for at least a few years.

The fact that China has moved from being considered a developing nation struggling under an oppressive communist regime to sporting the strongest economy in Asia may come as a surprise to many Canadians. And now, thanks to five years of extensive lobbying and negotiations by the Canadian Tourism Commission and the Canadian government, China is ready to come visit Canada – albeit with a number of conditions.

Over the last 50 years, the PRC has been represented by such iconic media images as people commuting by bicycle, parades with thousands of youth hoisting placards of Chairman Mao and, more grimly, a lone student standing in the path of a tank in Tiananmen Square.

Many continue to think of the PRC as a primarily rural country where equality as defined under its communist government amounts to little more than the shared privilege of poverty. And while more that seven out of every 10 Chinese continue to live outside of urban centres, classifying the enormous nation as poor is an outdated assumption. Over the last 20 years China has made moves towards a more free market economy, much like Russia did under Mikhail Gorbachev’s leadership. In the past decade, China’s economy has undergone incredible growth, and with it, a type of prosperity that parallels 1960s North America, with its rampant consumerism and flourishing middle-class.

Clearly, this isn’t your mother’s China, anymore.

To illustrate how far China has come, last Valentine’s Day Shanghai and Beijing audiences had the chance to celebrate with a performance of Eve Ensler’s Vagina Monologues . The play is performed royalty-free on that day – known as V-Day – with the proceeds being used to fund causes that work to end violence against women. The award-winning play – frank discourse on the complexities of female sexuality featuring the word "vagina" hundreds of times during its 90-minute performance – was well received.

A reviewer for the English-language, Chinese culture magazine, Peking Duck , suggested that Ensler’s revolutionary work posed "unique challenges to the average Chinese viewer who was unaccustomed to such matter-of-fact usage" of the V-word. Fair enough. The play, when presented throughout North American in the ’90s proved challenging to a lot of people, but that was the point. However, a comment written in response to the review was fundamentally more revealing. "The vast majority of the Chinese male students in the audience were dismissive of the play’s content."

This observation is hardly surprising, the PRC has never been known for its progressive politics around women’s, or minority, issues. In fact, China has received the dubious distinction of being a country with a government that blindly allows systemic and widespread human rights violations. And despite well-documented cases of human rights abuses verging on epidemic proportions, North America, with its ceaseless craving for affordable products has increased its business with China. Our consumerist culture has propelled the PRC’s socio-economic machine, effectively helping to build its middle-class.

Will this exploding Chinese middle-class take the place Japanese tourists in Whistler held into the early ’90s? Tourism Whistler and The Whistler Chamber of Commerce are hoping so. And the expected numbers are impressive: at one point Japanese tourists made up 15 per cent of the resort’s entire market.

Tourism Whistler, the organization characterizing the news as "excellent" and something that "Whistler businesses have long awaited," greeted January’s announcement that Canada has received ADS from China with enthusiasm.

"The approved destination status is something we have been looking forward to for five years," said Barrett Fisher, president of Tourism Whistler. "China has one of the largest outbound tourism potentials in the world, and ADS opens the door to significant opportunities for Canada, and for Whistler in both summer and winter."

A country with more than a billion citizens, 100 million of them expected to be defined as middle class (defined, for families, as having an annual income in excess of $70,000 US) by 2020, could have enormous implications for the entire Canadian tourism industry. Thanks to initiatives such as the ADS, outbound travel in China increased 224 per cent between 1993 and 2001. This figure reflects the first years of the ADS program, when only 28 countries had received the designation. Today there are twice as many outbound travel options for Chinese travellers, with Canada becoming the 64 th ADS country. The World Tourism Organization anticipates that China will become the fourth largest source of outbound travel by the end of the next decade.

John Nadeau, president of the Whistler Chamber of Commerce, finds the numbers, and the potential of this new market to be staggering.

"Sitting at a dinner party with a couple of accountants I started to run through the numbers (pertaining to Chinese outbound travel) and I think the average spend was around $4,200. And that’s from existing Chinese visitors," says Nadeau. "Let’s assume Canada can pick up one per cent of that. That’s one million visitors per year, if you multiply that out by the average spend that’s $4.2 billion."

To put that $4.2 billion figure into perspective, in 2001, just over 71,000 business travellers from China pumped $123 million into the Canadian economy. Nadeau thinks the best way to help foster the development of this astounding new market is to take a pro-active approach.

"Just by virtue of who we are I think we’re going to get a lot of that business," opines Nadeau. "And when that happens our members are going to see an increase of business."

While participation in winter sports has levelled out throughout the Western world, the number of Chinese taking up snow sports is growing at an astronomical 1.5 million per year. That’s a whole lot of lift tickets. (The numbers are attractive enough that Vancouver-based Intrawest is currently in discussions to develop a number of projects to take advantage of China’s growing interest in skiing and snowboarding.)

"When you look at other markets where skiing has been on the decline due to aging boomers and other demographic issues, you compare that to China where you are seeing this exponential growth – we definitely look at that," says Fisher in reference to how, in part, TW will market the resort.

But it will take more than the offer of powdery slopes to develop the Chinese market in Whistler.

"We’re going to have to educate the business community on certain culturally sensitive issues and that’s a role the chamber can play. We can make sure we know how to deal with the destination visitor from China," Nadeau explains.

Cultural sensitivity training will be new but necessary territory for the chamber.

"The Chinese have different customs than we do and they speak a different language so we’ll have to find ways of engaging communication," he says.

While technological advances, such as improved translation software being available for handheld devices like Palm Pilots and BlackBerrys may play an important role in communication, Nadeau emphasizes that the human factor must also be considered.

"Do we need to run Chinese language skill courses? Do we have to educate people on customs issues, such as how you hand out a business card? We’ll have to look at that."

Education may prove to be an exceptionally valuable two-way street. First, by educating resort workers as to the intricacies of Chinese culture and providing rudimentary language skills the resort climate would be far more welcoming to Chinese tourists. Second, by offering Chinese tourists the opportunity to learn English in Whistler a new economic sector could be opened to the community.

"There’s a huge demand for people in Asia to learn English and I think this could be another huge opportunity for Whistler," suggests Nadeau. "Maybe we could fill in the shoulder seasons by offering what they call destination education."

Clearly, Nadeau is thinking out of the box. There is more to offer this new market than unparalleled scenery and recreation opportunities. There are a lot of potential new tourist dollars at stake, and he’s committed to making sure chamber members get their share.

The head of TW is a little more cautious when it comes to making predictions on what the influx of Chinese tourists will mean for the resort.

"It’s difficult for us to make a projection, because we don’t have a baseline. If you look at Vancouver for example, they have to date received a number of Chinese business travellers," says Fisher. "Vancouver being part of the Pacific Rim is part of the business hub. Whistler has not been a target."

Saying that, Fisher is quick to point out that TW has done its homework.

"We’ve done an analysis on the market. On the product/market match that market has expressed incredible interest in adventure tourism, eco tourism so they’re very much looking for that outdoor, genuine experience that Whistler portrays very well.

"Historically there might have been a very elite upper-class and a dominant lower-class, so as you see that move towards more wealth to a middle-class that’s clearly a sign that a market is ready to be explored."

But don’t expect the sounds of Mandarin peppered with phrases like "vertical" and "half-pipe" to be echoing through the village next month.

"Keeping in mind that negotiation of the terms of the agreement could take up to a year," says Fisher. "This is not as immediate as we would like it to be, but this is clearly the first major inroad."

The fly in the ointment

With humongous numbers being bandied about in reference to the potential economic impact China could have on Whistler, it is hard not to be enthusiastic. But maybe we need to hold off adding "Huan-yin ni dao" to our cache of international phrases because of what’s not being said.

Over the past year, journals such as The Economist and International Herald Tribune have been predicting the burst of China’s economic bubble. Growth has been too high for too long and the country is beginning to feel the effects of inflation. While this trend became apparent in 2003, last year the economy grew even faster, at an estimated 9.1 per cent – a problem compounded by over-investment. A good example of how out of control the economy has become are real estate princes. In Shanghai, the cost of an average 80 square metre (860 square feet) dwelling is 27.5 times the average household’s annual disposable income. Comparatively, a similar dwelling in Vancouver costs less than 10 times the average household’s annual disposable income.

The question here is would it be in China’s interest, in the face of a declining economy, to issue exit visas for people to spend their leisure dollars outside the country? Would it not be more likely that the highways and by-ways of Shanghai would feature shiny, new billboards promoting "Hangout in Hunan"?

Cindy Gobin, head of marketing for Tourism B.C., is reluctant to comment on the potential financial benefit of the ADS until the negotiations outlining the criteria for obtaining exit visas is complete. She does acknowledge the role China’s current economic environment will play.

"China’s economic climate certainly factors in, but since we’re getting such a small share of the Chinese market now, the ADS will have a positive effect on tourism," says Gobin. "Whatever kind of small share we get out of China is going to be significant here."

Gobin believes one of the most important defining factors determining the impact of the ADS will be the number of exit visas that China issues.

"At this point, we don’t know what that quota will be," she says.

The conditions governing Chinese wishing to acquire exit visas for leisure travel to Canada include that all travel be conducted within a group, tours carried out by licensed tour operators and that individuals will be required to pay travel agencies a significant cash deposit that is refundable upon return. While Gobin could not comment on what this figure might be, the proposed figure for travel to the U.S. – should they fulfil the requirements of ADS status – has been set at 100,000 yuan, approximately $12,000 US. For a family of four, that would amount to more than $58,000 Cdn.

Imagine for a minute that Canada was China and the U.S. was Canada. Would you go through the hassle of finding nearly $60,000 to leave as a deposit with your travel agent to take your family to Disneyland? Maybe you’d reconsider that road trip to Barkerville or blow your vacation stash on a tour of the Atlantic provinces.

Obviously a tactic to prevent defection, the issue of what the Chinese government calls "prolonged stays" will also be addressed thorough the choice of tour operators and travel agencies to insure maximum security. Representatives from the Chinese Consulate in Vancouver and the Chinese Embassy in Ottawa did not return calls requesting information pertaining to defection threats under the ADS. However a U.S. Department of Commerce report titled The Trouble With ADS cited an overstay rate of 0.29 in connection with visas issued under the ADS stipulations.

Another possible snag in China becoming a major market for Whistler ironically may be the country’s new-found love affair with winter sports.

"They’ve got the terrain and the weather, all they need is the infrastructure," points out Gobin. "They could grow their own ski market and become competition for us in attracting Asian skiers. Long term they could become both a market and a competition for us."

In the meantime, Gobin thinks it’s fair to compare Canada’s potential gains to those that Australia encountered. One of the first countries to receive ADS status in 1999, Australia saw its numbers of Chinese travellers rise from just under 8,900 business travellers in 1992 to a total of more than 120,000 Chinese visitors in 2002, a quarter of whom were travelling under ADS-issued visas. If Canada were to experience a similar rate of growth in Chinese tourists, the final figure would be around 50,000 shy of the one million mark. And at $4,660 per visitor (the figure quoted by Tourism B.C.) those visitors would supersede Nadeau’s dinner party estimate by $.3 billion.

Now if only potential meant the same thing as certain.

Planting seeds

Regardless of what economic forecasters may be saying, when it comes to money if prediction was science we would have all have become "dot com" millionaires in the late ’90s.

According to the Chinese astrological calendar, 2005 is the Year of the Rooster, and therefore a very good year for planting the seeds of business. But once the seeds are planted there’s the matter of tending the garden, something that Fisher, who headed up TW’s marketing division before taking the helm as president, knows well.

"Once you have free reign to market it takes three to five years before you see any critical mass coming out of a market. And then looking to the long-term, beyond 2010, I think most of our partners like the Tourism Commission, Tourism Vancouver and Tourism B.C. are looking to really 2015 to 2020 before we anticipate China will be a large target market," says Fisher. "Could it become 10 to 15 per cent of our market share in the next 10 to 15 years? That’s our hope."

The economic and social variables that will determine the impact of Canada receiving ADS from China are many. Any economic impact of this new agreement will not really begin to be felt for at least three years. The full impact won’t be known for considerably longer.

Counting your chickens before they hatch is never a good idea, even in the Year of the Rooster.



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