Highlights of Program

China: Building The Opportunity

Sponsord by

October 4, 2016

Background…

China NiHao™ is a association of

multi-dimensional professionals in

travel and transportation focused on

assisting communities, airports and

businesses in accommodating the

growth in Chinese visitation to the

USA.

On October 4, 2016, the Harrisburg

International Airport sponsored a

China-Welcome™ workshop which

outlined the continued opportunities

in the region for additional Chinese

tourism. These are the highlights of

that event

2

The Goal: Building & Keeping

Harrisburg China-Welcome™

And bringing more of these folks here

What We Do

Functional China-Welcome™ Programs

More than cultural training… much more

Positioning venues and communities in the Chinese travel-decision

Analyzing new potential Chinese visitation potential

Preparing venues to assure seamless transit and use of venues

Working with communities in building new Chinese traffic flows

Assisting regional communities in attracting more FIT traffic via the

local airport

5

Let’s Keep In Mind… Things Change

China – USA - 1977

Closed. The Red Guards. Cultural revolution. Repression.

Streets empty of cars. Near-zero discretionary income.

Effectively zero traffic to the USA.

Flying out of China required hijacking a MIG-17.

China – USA – 2016

2016 – Beijing streets choked with Buicks & BMWs. Three

million China-US tourists – more than 20 million

through 2020

The key point here: this is a traffic segment that is

constantly in flux – It will change for Pennsylvania, too.

议程 The Harrisburg Program

Drawing More of China To Pennsylvania

Objective One: Characteristics of the Chinese Segment

Objective Two: Keeping The Region China-Preferred

Objective Three: Defining Your Role & Opportunity

Objective Four: Focusing On Your Specific Plan

Some Basics…

• Chinese leisure travel represents the #1 growth

market for US secondary venues… Like Pennsylvania

• Attracting and keeping this segment means being

China-Welcome™ - both here, and in China!

• Being China-Welcome is not a goal. It’s an on-going

process and effort

• The currently strong traffic to this region can grow, or

it can be eventually allowed to divert to other regions

• Today, we’re going to explore how this region

continues to be a major and growing part of Chinese

itineraries.

7

They’re out to get the Chinese to come there, instead of Pennsylvania…

Some Great Realities…

China-generated travel represents the biggest

opportunity for US communities and airports in the

next five years…

The potential demand for China-US traffic is at least five

fold more than what is experienced today…

Chinese travelers are choosing destinations that meet

their general decision-requirements.

Largely, the US has not been the choice because of the

distance, lack of nonstop flights from key Chinese cities,

and unfriendly connection mechanisms at US gateways.

That has changed – and Pennsylvania is in their

planning.

Critical To Keep In Mind…

The current China-visitor profile will – will – evolve…

As the market grows, the demands and booking-drivers

will evolve, too

Imperative: Monitor and anticipate the shifts in the

demographics and travel channels

“China ready” is a moving target… as travel tastes

change, and other US venues get aggressive,

Pennsylvania must evolve its China outreach

9

Historical Info Is Not Future Planning Data

There are lots of studies and research on China-US

travel … All reflect conditions that are now

fundamentally changing… and it’s all positive for communities that prepare…

• US as a destination choice will move up

materially…

• More nonstops from China will cut travel time –

a major deterrent to long haul travel choices…

US gateway hubs are poorly-postured to

encourage connect traffic.

A new ball game… and there are huge

opportunities

10

They Get To The USA By Air… But It’s

Tough Connecting To Harrisburg

Historically, the route is into a gateway hub and

onto a motorcoach…

As more nonstops are opened from more major cities in

China, there will be increasing propensity to connect on

to secondary airports to initiate the itinerary…

One of the immediate objectives of all secondary US

airports must be support of programs to make our

international gateways truly accessible to international

connections.

Today, they are – repeat, are – choke points to new

China traffic into Harrisburg International – these can be

addressed at Chicago, Washington and Charlotte.

That’s Boyd Group International.

ry across the globe

Despite forecast growth, the 2020 figure is still well under 5% of the total global China-outbound

traffic

The China-US Market Is Barely Tapped

Airport CityEst. US

Potential

Current

Capture

Net

Opportunity

Percent

Captured

广州 /白云 Guangzhou 1,344,368 171,026 1,173,342 12.7%

成都 /双流 Chungdu 1,028,685 143,242 885,443 13.9%

深圳 /宝安 Shenzhen 967,366 171,026 796,340 17.7%

昆明 /长水 Kunming 913,824 22,575 891,249 2.5%

西安 /咸阳 Xi'an 802,945 32,228 770,717 4.0%

重庆/江北 Chongqing 789,112 25,929 763,183 3.3%

杭州 /萧山 Hangzhou 690,534 10,728 679,805 1.6%

厦门/高崎 Xiamen 531,256 19,780 511,476 3.7%

南京 /禄口 Nanjing 466,708 25,887 440,821 5.5%

武汉/天河 Wuhan 461,308 51,097 410,211 11.1%

长沙/黄花 Changsha 455,785 25,790 429,995 5.7%

青岛/流亭 Qingdao 443,287 34,739 408,548 7.8%

郑州/新郑 Zhengzhou 421,254 13,961 407,293 3.3%

Totals 14,548,897 748,008 8,568,423 5.1%

Forecast US air

demand at top 13

cities, after Beijing and

Shanghai…

Lack of sufficient

nonstop service

chokes off demand

from these points.

The third-world

nature of most of

our air gateways

constricts the ability

of these consumers

to connect by air to

Harrisburg.Source: Boyd Group International Preliminary Airports:China™ 2016 Forecast

Realities of Future China-US Air Service

1. Many will be from “secondary” Chinese points

2. For US carriers, that will mean near-exclusive applications to

hubsites such as United/SFO, American/LAX, etc.

3. Chinese carriers are looking at new city pairs – not just big cities.

China- Boston. China-New Orleans, etc.

4. Chinese visitors will increasingly opt for connecting flights into

the interior of the US. Places like Spokane, Bangor, Sarasota,

Buffalo – and start the itinerary from there.

5. The new millennial Chinese consumer will be much more

demanding in regard to the level of China-Welcome™ at US

destinations.

14

Harrisburg Is China-Accessible

Three daily single connects from Beijing…

June, 2017 schedule – connect times between 90

and 180 minutes at the hub.

Connect Point Depart Time Arrival Time Connect Length Depart Time Arrival Time Carrier Efficency

Washington.IAD 6:25:00 PM 7:55:00 PM 130 10:05:00 PM 11:00:00 PM United 97.5%

Chicago/ORD 4:10:00 PM 4:30:00 PM 90 6:00:00 PM 8:49:00 PM United 95.4%

Toronto 6:05:00 PM 6:45:00 PM 100 8:25:00 PM 9:49:00 PM Air Canada 99.8%

There Is Harrisburg-China Air Traffic

London is traditionally and normally the #1 international market from US cities… at

Harrisburg, Shanghai is stronger… known traffic to Shanghai and Beijing out of

Harrisburg International is @ ten passengers a day… that we know about

With upgrades to facilities at Chicago, Washington, etc, more

traffic will connect into Harrisburg.

Rank City Psgr PDEW % Originating

1 Cancun 3,328 4.6 97.9%

2 Toronto 2,643 3.6 62.8%

3 Vancouver 2,642 3.6 63.1%

4 Shanghai 2,292 3.1 73.3%5 Montreal 2,256 3.1 65.3%

6 Mexico City 2,161 3.0 62.9%

7 London 2,054 2.8 73.1%

8 Grand Cayman 1,951 2.7 92.2%

9 Punta Cana 1,791 2.5 97.8%

10 Montego Bay 1,689 2.3 94.7%

11 Tokyo 1,519 2.1 49.9%

12 Guadalajara 1,453 2.0 50.9%

13 Beijing 1,384 1.9 62.5%

Source: Boyd Group International Airports:China™ Analyses

Let’s Look At Our Chinese Guests

A Prospective Plan…

All travel categories are growing – but it’s the opening of all of America that has Chinese visitors spending their holidays in the USA.

For Harrisburg & the region,

this represents enormous

new additional potential for

tourism.

While slower in growth, the

business sector is also

critical to Harrisburg – which

means that more pressure

needs to be put on

improvement of air

gateways.

2008 2009 2010 2011 2012 2013 2014 2015

Holiday 20.0% 21.0% 16.0% 27.0% 30.0% 32.0% 34.0% 39.0%

Visit Friends & Relatives 34.0% 22.0% 24.0% 24.0% 20.0% 21.0% 22.0% 20.0%

Business 49.0% 45.0% 42.0% 30.0% 19.0% 16.0% 16.0% 14.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

The Mix Is Changing

Let’s Look At Some Metrics…

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Shopping 90.0% 88.0% 90.0% 92.0% 94.0% 87.0% 87.0% 85.0% 89.0% 87.0%

Sightseeing 50.0% 51.0% 45.0% 57.0% 48.0% 54.0% 78.0% 78.0% 79.0% 81.0%

National Parks/Museums 25.0% 29.0% 23.0% 27.0% 24.0% 29.0% 36.0% 37.0% 40.0% 45.0%

Small Towns/Countryside 23.0% 22.0% 19.0% 22.0% 23.0% 23.0% 36.0% 34.0% 39.0% 41.0%

Theme Parlks 25.0% 28.0% 28.0% 27.0% 33.0% 36.0% 34.0% 34.0% 34.0% 36.0%

Historical 45.0% 47.0% 43.0% 43.0% 45.0% 26.0% 23.0% 26.0% 25.0% 30.0%

Cultural/Ethnic 24.0% 21.0% 25.0% 29.0% 23.0% 28.0% 23.0% 22.0% 22.0% 24.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Evolving Travel PreferencesThe spike in

sightseeing bodes well

for Harrisburg…

Note tha the decline in

“historical” is likely

due to changes in the

definitions of the

categories.

Point: the potential

demand is going up –

but so is the

competition from other

US venues.

2008 2009 2010 2011 2012 2013 2014 2015

Spend Per Triip $2,594 $2,926 $4,874 $6,096 $9,306 $10,586 $11,635 $13,490

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000 Longer Trip Time & Increased Spend Per Trip

Includes the effects of

longer visitation, and

increased shift of high-

spend Chinese

consumers from other

global venues due to

new visa system.

Caution is urged in

regard to reliance

increase in spending –

the focus will likely

shift as more high-end

consumer products

are made cost-

effective in China.

So, What’s “China-Welcome?”

The Three Openers To Chinese Visitation

• Low Anxiety --- Comfortable

venues, welcoming venues

• Familiarity --- Aware of the

destination well ahead of time.

• Guidance & Support---

Knowing that their needs will

be met on-site

Harrisburg & the

region have made

enormous strides in

being China-

ready.

But this is a process

of outreach into

China, not just

having slippers in

the hotel room.

Communication Touch Points (CTPs)

Like all travelers, destinations are

chosen based on where they are

comfortable…

Can’t be comfortable if there’s no

communication.

That means opening the venue to

wayfinding that addresses this…

24

Going To China?

They’re Ready for Us…

Shanghai

Pudong

Beijing Chengdu

Our Gateways Are Culturally Third World…

San

Francisco

Seattle

Chicago O’Hare

The message to the

millions of visitors

from China:

You’re on your

own

Unfriendly Gateway Hubs Deter On-

Ward Connectivity

A Chinese visitor has a very tough time navigating US connect points – so, they focus on ground transportation to secondary cities.

This deprives airport such as Harrisburg thousands of potential passengers each year.

If You Spoke No English, How Welcome Is

This? Airports & Venues…

A China-Welcome™ Venue

Preparation for transiting communication

touch points...

A deployable China-Kit™ that addresses all

key CTPs where guidance or support or

location promotion are needed…

Clear support and communication-

anticipation - Proactive attention paid at

every step

Result: Word of mouth support when they get back to Changsha

Being China-Welcome™

means anticipating travel

communication touch

points.

More Reasons For Harrisburg To Stay

Aggressive… Things Change

There are several issues that demand futurist planning…

A change in political winds could shift traffic volumes

Changes in the Chinese economy – could spike or decline

investment in the US

Changes in Chinese tariff policies – effects on shopping

Changes in tastes – the sector is still young and developing

New competition that’s more “Sino-aggressive”

More Information…

Contact us at www.ChinaNiHao.org

Let’s Move On…

Now that we have an ideal of getting

Pennsylvania China-Welcome™ …

Let’s dig deeper into the aspects of the

Chinese leisure market….

Jack Lok and Chris Spring …