China's tourism offers opportunities for U.S. food sales

AgExporter, Nov, 1993 by Diana Sedney

An army may march on its stomach, but so do armies of tourists, as China is finding out. The influx of foreign visitors there is topping all projections and necessitating a second look at imports of foods that supply this sector. One beneficiary may be U.S. exporters who target their sales at China's growing number of hotel food and beverage managers.

When China's international tourist revenues hit $3.95 billion in 1992, officials of China's National Tourism Administration (CNTA) recognized that their $4-billion receipt projections for 1993 were too conservative. Hotel and food managers are now faced with the task of feeding these hungry tourists who are eager to try new cuisines, but at the same time relish the taste of home.

China's rapidly expanding economy (12.8 percent GDP growth in 1992 and still climbing through the first half of 1993) is attracting worldwide attention as tourists and business representatives flock to the Middle Kingdom. Hotel occupancy rates are rising. In Beijing, the No. 1 destination of foreign visitors, summer 1993 hotel occupancy exceeded 80 percent. Many airlines are expanding their flight schedules to accommodate increased demand.

Visitors looking for all the comforts of home can stay at any of China's four and five star hotels, with new choices opening monthly. For travelers on a budget, there are more than 780 choices of 1- to 3-star accommodations as well as a multitude of unrated hotels and guest houses. In major cities, particularly those building trade development zones, the demand for first class accommodations is already outstripping what was considered an oversupply.

Year(s) of the Tourist

The CNTA is working to expand its tourism resources and take advantage of China's thousands of years of history, wide-ranging natural resources and scenic beauty, ethnic diversity and cultural centers. By aggressively targeting foreign tourists, China is building its newest resource, foreign exchange.

Universities in four Chinese provinces have started departments of hotel management.

In 1994, China will join its neighbors to promote "Visit Asia Year." The repatriation of Hong Kong in 1997 will prompt another "Visit China Year." In 1999, China will celebrate the 50th anniversary of the founding of the People's Republic of China.

Japan, U.S. Top Tourist Rolls

China welcomed more than 4 million foreign tourists in 1992, an increase of 48 percent over 1991. Japan and the United States send the largest number of tourists, but account for less than 40 percent of visitors. Residents of Taiwan, Hong Kong and Macau are not counted as foreign guests, but rather "compatriots." They accounted for 33 million visitors in 1992. However, if domestic travelers are added to the tourist rolls, the number swells to 367 million.

But food and beverage managers are not limiting themselves to the tourist trade. Now that hotels accept local currency as well as the foreign exchange certificates that foreigners must buy, walk-in trade has become an important segment of hotel/restaurant revenues.

Hotel promotions are advertised through print, radio and television media to attract local residents with rising per capita incomes. While China's 1992 per capita income of $371 may not sound impressive by Western standards, a recent study by the International Monetary Fund (IMF) puts this number into better perspective. The IMF evaluation of economies based on purchasing power equity ranks China's economy as No. 3 in the world.

Making Contacts, Building Markets

Exhibitions targeted at the hotel trade, such as recent ones in Shanghai and Guangzhou, offer excellent opportunities to contact China's hotel managers to introduce new products and equipment. The CNTA will sponsor "Food and Hotel China 94" in Beijing on Sept. 26-29, 1994. This will be China's first international exhibit specifically targeted toward hotel suppliers. Some of the individual sectors to be included in the show will be bakery and confectionery, snack foods, drinks and food ingredients.

Demonstrations of food products and their preparation targeted at food and beverage managers have been a particularly effective method of introducing new foods. Guangzhou recently established a Western-style food association to promote food awareness and restaurant management for this popular type of cuisine. Distribution and supply companies for the hotel trade are just beginning to get organized, but as Chinese trade restrictions are reduced or eliminated, these companies will play an increasingly important role in making imported food products available.

China's flourishing hotel trade offers exciting opportunities to U.S. exporters looking not just at the foreign visitor trade but also at venues to introduce their products to China's consumers.

For more information, contact:

U.S. Agricultural Trade Office-- Beijing
U.S. Embassy
PSC 461, Box 50
FPO AP 96521-0002
Tel. (011-86-1) 505-4575/76
Fax. (011-86-1) 505-4574

U.S. Agricultural Trade Office--
    Guangzhou
U.S. Consulate
PSC 461, Box 100
FPO AP 96521-0002
Tel. (011-86-20) 667-7553
Fax. (011-86-20) 666-0703