‘Ready or not, here we come’

It may have been dubbed as a three-day vacation but it was still a busy day for Dr. Wang Xiang Dong, a surgeon at the Tong Ren Hospital in Beijing. Together with more than 40 Chinese professionals mostly from the medical sector, Wang has been touring scenic spots on Saipan as part of a getaway package.

“The colors of the sea and the sky give us a deep expression and this island gives us a very peaceful feeling. We get relaxed here,” Wang said. “The decoration of this hotel [Hyatt Regency Saipan] is very special, fit for the place near the sea.”

He also appreciated the sights of World War II remnants, which he and his group toured earlier that day. In the afternoon, he said his group dined at a Chinese restaurant at Saipan’s premier tourist district, Garapan. “The prices of food, including the hotel, are not much expensive.”

Another Chinese surgeon, Liu Ming, said, “Saipan is too beautiful. I like the Bird Island.”

With the scheduled signing of the Approved Destination Status agreement between the Commonwealth and the Chinese government in December, industry players are already expecting the influx of Chinese tourists into the islands. For those who may not have noticed it, though, the Chinese tourists are already here and it will not take long before huan ying (Welcome!) and ni hao (Good day!) may soon add themselves to the locals’ smattering of Japanese and Korean greetings.

‘CNMI’s 2nd biggest market’

Even before the ADS agreement is formalized, visitor statistics released by the Marianas Visitors Authority in October show that the number of Chinese visitors are now the second highest among the CNMI’s tourists, next to the Japanese.

Some 3,541 visitors came to the islands that month, 64 percent higher than Chinese arrivals in October 2003. The Chinese total reached 3,541, overtaking the number of Koreans who visited the islands that month. Year-to-date, the number of Chinese tourists who have visited the Commonwealth is nearing the 30,000-mark.

Despite the skepticism by some economists on the potential of the Chinese market, the Pacific Asia Travel Association keeps stressing the importance of China as a tourism market.

In a conference held on Saipan in December 2003, PATA’s Strategic Intelligence Centre managing director John M. Koldowski said that Chinese spending on travels is anticipated to reach $100 billion by 2008.

Koldowski also noted that there were more departures from China than from Japan in 2002, with over 16 million Chinese traveling outside the country. This phenomenal growth in outbound Chinese travelers is in sharp contrast to the 3.74 million outbound Chinese in 1993. Koldowski said this growth is at a faster pace than that achieved by Japan in decades.

With a population of over 1.2 billion, China’s “super rich” class equates to almost 11 million people. The middle class, which comprises 8.1 percent of the population, earns an equivalent of from $4,000 to $12,000. In Australia, Koldowski said Chinese tourists spend an average of A$5,638 during a visit; in Singapore, S$498; in Thailand, US$610.

Koldowski said the Asia Pacific region is clearly one area of growth in world travel, saying that such growth would trickle down to the CNMI.

Tinian Dynasty is optimistic

Although there are no regular flights servicing direct flights between China and the CNMI, the Tinian Dynasty Hotel and Casino, which has been chartering China Southern Airlines to bring in Chinese tourists, disclosed that about 22,720 visitors had come to the CNMI from January to October this year.

The bulk of this total—15,050—came from Guangzhou; 6,500, from Shanghai; and 1,170, from Beijing.

“Once the ADS is approved, it is estimated that Chinese tourists’ arrival to CNMI will increase to 100,000 in the first year and gradually climb up to 200,000 per year in three years time,” said TDHC general manager Tom Liu.

“The Chinese government allows each citizen to carry a maximum of US$5,000 for each overseas trip. If each visitor just bring half of that, to CNMI, [this will result in up to] $250,000,000 being spent in the CNMI [by 100,000 Chinese tourists]. The government will realize at least 15 percent or $37,500,000 in tax collections through BGRT, hotel occupancy tax, beverage tax, CPA tax, airport arrival/departure fees plus landing fees,” he added.

However, Liu said that, unless more hotel rooms are built on the islands, the maximum number of Chinese tourists should be limited to 200,000 to accommodate these visitors.

Tinian Dynasty charters the China Southern Airlines for two flights weekly from Guangzhou. It partners with Century Tours in chartering two China Eastern Airlines flights weekly from Shanghai. Tinian Dynasty also charters flights from Beijing during long Chinese holidays—the Chinese New Year, and the periods May 1-7 and October 1-7.

The charter flights by TDHC and Century Tours bring in a total of four Chinese flights from China every week.

Unlike Liu’s optimistic projection, however, Century Tours projects Chinese arrivals to reach about 100,000 by 2010.

“Since all flights operate on a back-to-back basis, there could only be a fixed number of Chinese visitors coming to Saipan at any given time,” said Century Tours president David Sablan. “The visitors that arrive on Wednesday return to China on Saturday. The visitors that arrive on Saturday return to China on Wednesday. We anticipate the total number of arrivals from China under the present trend of charter arrangement will be pretty much fixed at about 4,000 per month average or 48,000 to 50,000 arrivals for this fiscal year.”

Sablan said that the annual Chinese arrivals for the next five years will increase at a rate of 10 percent to 15 percent.

“The CNMI must, however, be cautious that the influx of visitors from China does not get out of hand to an unmanageable level. This will be detrimental to the well-being of the CNMI and might even be counter productive,” he added.

Without the charter flights, Chinese arrivals to the CNMI would have been practically zero.

“Thus the charter flights must continue even at the expense of charterers losing millions of dollars each year. There must be subsidy or incentive from the government to encourage charterers to continue to bring in flights until such time that airlines decide to fly the routes on their own,” Liu said.

Continental dips into China

Continental Micronesia vice president for sales and marketing Wally Dias said the air carrier has begun offering travel packages between Guangzhou and Saipan via Hong Kong.

This development came with the launching of direct flights between Hong Kong and Saipan earlier this month. He said Continental began looking at Hong Kong and Guangzhou as travel markets several months ago in anticipation of the ADS approval for the CNMI.

Dias also said Continental would look into the possibility of providing charter services.

“If we can find additional demand, we will consider increasing the flights,” Dias said. “We’re pleased with what we’ve seen so far.”

Currently, the markets meet Continental’s expectation of 75-80 percent of the 310-seating capacity per week. In Hong Kong, Dias said Managaha Island instantly became popular among travelers.

Dias said, however, that Continental would not be offering direct flight services between China and Saipan, considering the cold bilateral ties between the United States and China.

Despite this, Commonwealth Ports Authority executive director Carlos Salas is still optimistic that regular scheduled flights would service Saipan and China directly by next year.

Salas said China Southern Airlines has submitted an application with the U.S. Department of Transportation to service Tinian, Guangzhou and Shanghai.

“I believe there were discussions for direct flights from Beijing,” Salas said. Northwest Airlines, Salas said, has begun servicing China and the U.S. mainland.

Despite the anticipated increase in Chinese arrivals, Hyatt Regency Saipan said it is not gearing up for the market at this point when no regular flights service China and the CNMI.

Its present clientele, according to general manager Michael von Siebenthal, come from Hong Kong and Taipei, except for a group of mostly medical doctors who arrived earlier this week from Shanghai.

Once regular flights become available, however, Siebenthal said Hyatt could easily tap into the China market, saying there are currently seven Hyatt hotels in the Asian country. “The Chinese public knows Hyatt.”

CNMI gets ADS

Anticipating the ADS approval by the Chinese government, the MVA invested some $500,000 earlier this year to prepare for full-blast marketing of the CNMI as a tourist destination.

The MVA has tapped the services of public relations firm Ruderfinn, an American company based in China, to be its marketing arm in separate offices in Beijing, Shanghai, Guangzhou, and Hong Kong.

Within the Commonwealth, the MVA’s board members recently conducted inspections of different sites on its three major islands—Saipan, Tinian, and Rota—to assess the condition and help maintain the sites’ conditions, asking the Division of Parks and Recreation to carry this out.

Century Tours’ Sablan, who is also chairman of the MVA board, disclosed that the authority has been working with various agencies to prepare the islands for increased Chinese arrivals, such as the inclusion of the Chinese language in public signages and the use of international traffic signs.

“The trend in Chinese arrivals into the CNMI is expected to grow significantly….The arrival numbers for fiscal year 2004 as compared to FY 2003 showed positive double digit growth, and we anticipate the trend to continue for at least the next two to five years,” said MVA managing director Vicky Benavente.

Benavente estimated that Chinese arrivals would reach about 50,000 by the end of FY 2005, nearly double the 29,238 total registered in FY 2004.

In early October this year, China’s National Tourism Administration informed the CNMI of the ADS approval, although the status remains unofficial to date until an official agreement is signed by the CNMI government and China’s State Council.

Benavente said the signing of ADS documents were originally scheduled in November, but the event had to be postponed due to China National Tourism Administration chair He Guang Wei’s trip out of China. She said the official signing has been tentatively set for mid- to the latter part of December.

“The official document will be signed in Beijing between our government officials and China’s,” she said.

Gov. Juan N. Babauta said he invited U.S. Department of Interior assistant deputy secretary for insular affairs David Cohen to attend the ceremony.

Is the CNMI ready?

The question that need’s to be asked now is: Is the CNMI ready for the Chinese tourists? Anecdotes circulating among hotel personnel have already identified two potential barriers: cultural and linguistic.

“They’re arrogant. They don’t know any English,” said a hotel employee at one of the top hotels on island.

At least two guests did not pay their phone bills, claiming that they did not use the services from their hotel rooms, narrated the employee, who spoke on condition of anonymity. “Everything at the hotel has a system. The phone calls came from their rooms,” the employee insisted.

The employee noticed the increase in Chinese tourists staying at their hotel beginning July, when these guests occupied about 30 to 40 rooms weekly. Before this period, the employee said Chinese tourists only occupied about three to five rooms a week.

The employee also encountered language barrier problems. She could not speak Chinese; the guest could not speak in English.

“If you don’t understand Chinese, some of them would laugh at you,” the employee claimed.

An employee working at the Saipan International Airport lamented the alleged mess left by some Chinese guests before departing after being stranded by supertyphoon Chaba.

“One just left used baby diapers in one corner, while leftover food was scattered,” the airport worker said. “There were trash bags that they did not use.”

What needs to be done

“We have to learn the culture of our visitors to learn to cater to them accordingly. What we might see as ‘arrogance’ might just be natural behavior to others. Let’s learn to adjust and we will all get along with one another. As stated earlier, we should bring in Chinese guides to work with us. This solves the problem we are facing,” said MVA’s Sablan.

Sablan said the CNMI government should allow the hiring of Chinese speaking workers who would serve the China market.

Even during the PATA conference last December, Koldowski already anticipated language barrier and cultural differences as problems. He gave several tips on how to deal with Chinese tourists, saying that besides learning Chinese, tourist attractions must perform well beyond the clients’ expectations because of the importance of “word-of-mouth” in the Chinese culture.

“Chinese would prefer sincere attitude rather than casual style—for example, greeting them always by last name if possible, with their title like ‘General Manager’. This shows their status and gives them ‘face,’” he said.

“The manner of the speaker is considered more important than the content, so one needs to inject sufficient flattery and protect everyone’s face. The Chinese are traditionally suspicious of ‘foreign devils’ so work hard at creating trust,” he added.

Many Chinese love shopping and dining, he said. However, they don’t like Western food much. “For breakfast, they are more comfortable with traditional food items like congee, noodles or steamed buns.”

TDHC’s Liu said major infrastructure development would have to be done to upgrade existing tourist sites. Development of theme parks, water parks and other recreational facilities should also be encouraged, he said.

“Additional restaurants and upscale shopping centers are minimum needs to provide variety of activities for the visitors to do and places to go during their stay,” Liu said.

For MVA’s Benavente, her agency would begin conducting exit surveys among Chinese tourists to better understand their expectations and satisfaction level in their visit to the islands. The survey will boost information relayed by travel agents that Chinese tourists enjoy sightseeing, the beaches, diving, shopping, and most especially, dining.

Benavente also disclosed that the CNMI would participate in the World Travel Fair in Shanghai this January.

“We are planning travel agent seminars in partnership with MVA members in order to disseminate information about our tour products, destination attractions, hotels, etc,” Benavente said.

“Our competitive advantage includes the fact that we will be a fairly new and exciting destination to these travelers. The U.S. label is another added value to our destination, and the fact that we are able to actively promote and advertise once the ADS signing has taken place, will greatly help in getting our message out to millions of potential visitors,” she added.

Even before these plans are implemented, Dr. Wang, the surgeon from Beijing, indicated he was impressed with the natural beauty that Saipan has to offer.

“I have heard the name Saipan, but I didn’t know the exact conditions here. When I came, nature’s beauty here is a deep expression,” Wang said. “If I have a friend who wants to travel, I will introduce him here.”