The past year was one of historic milestones, record successes and new frontiers for California’s travel and tourism industry. As the Golden State’s international footprint continues to expand, Visit California’s marketing efforts are reaching further and deeper into global markets than ever, inspiring more audiences around the world to Dream Big.
“Around the World” is a three-part series recapping Visit California’s efforts on the international front from the past fiscal year, highlighting additional points for consideration as we look to strategic considerations for FY17/18 and beyond. More updates regarding strategy, activations and conditions in these global markets are forthcoming throughout the year. In the meantime, consider this your international market update CliffsNotes!
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The vast continent of Asia contains California’s No. 1 overseas market; a market with perhaps the most growth potential of anywhere in the world; and two markets characterized by long-term investment, steady growth, and a shift toward enriching, meaningful travel experiences.
China continues to break all records and hit milestones ahead of forecast schedules. California is on track to welcome 1.3 million Chinese visitors this year as Chinese visitor spending approaches $3 billion — that’s more than France, Germany and the U.K. combined.
By 2020, China will be California’s largest international market, jumping above Canada and Mexico to nearly 2 million annual visitors. Airlift has been growing to meet demand, with the volume of nonstop flights to California tripling in the past three years alone. It’s now easier to get to California from all regions of China with 15 gateways and counting.
Visit California is focusing on expanding its marketing footprint with a tailored regional approach to maximize the potential of the 100-plus cities that have populations exceeding 1 million.
The Challenges: Keeping up with demand and understanding the market nuances.
The Opportunities: Opportunities abound across the ultra-luxury, mass market, family, FIT, groups and MICE segments.
Marketing Tip: Ensure your destination is China Ready with services to cater to Mandarin-speaking leisure and business travelers.
India is being looked to as the next China in terms of future accelerated growth and limitless potential given the sheer population size of 1.2 billion, of which 750 million are under the age of 35.
India’s outbound travel market is estimated to reach 50 million by 2020, and California visitation projections show 50 percent growth in the same time frame. Currently, California commands 27.5 percent market share from the Indian outbound travel market to the U.S., accounting for 306,000 visitors last year.
In 2017, California is projected to see an uptick in arrivals of nearly 10 percent, with double-digit growth predicted each year for the foreseeable future. Air India recently introduced nonstop service to SFO, a milestone as it is the first nonstop flight between California and India.
The Challenges: The ease of getting a visa will likely be impacted by the current administration’s policies.
The Opportunities: Interest in niche and experiential travel is growing particularly for the family, luxury, outdoor and entertainment segments; tech-savvy Millennials are pursuing fly-drive itineraries, as well as adventure and sports experiences.
Marketing Tip: Travel trade professionals are developing experiential itineraries that include festivals and special events to meet demand for customized, personalized trips.
Japan has an aging population — those over 65 now outnumber those 14 and younger two to one — and they are eager to travel and relive their youth. In the younger age bracket, trendsetting women in their 20s are the largest segment of female travelers, accounting for more than 1.5 million outbound travelers.
After three years of declines, outbound travel for 2016 was up 5.6 percent, with growth spurred by cheaper tour package prices, eliminated fuel surcharges and a stronger yen. Nearly 60 percent of Japanese indicate a desire to travel overseas, the highest percentage since 2009. It is estimated that visitation to California will continue to slowly but steadily climb to hit 578,000 in 2020.
The increase in online bookings has allowed OTAs to grow their online product offerings and feature more diverse destinations not often covered in traditional tour brochures.
Demand for once-in-a-lifetime and luxury experiences are on the rise, and as with most Japanese travel, there is a focus on magnificent scenic views, known as “zekkei.”
The Challenges: No country in the world faces the prospects of such a large population decline as Japan, a fact that threatens the future economic growth of the country; increased demand for travel has created capacity challenges for flights to California during peak periods.
The Opportunities: Solo travel is on the rise; there is a growing interest in traveling as a family, and Japanese parents are willing to spend on “educational travel” to expose their children to new and enriching experiences.
Marketing Tip: Sixty-seven percent of leisure travelers now book online, creating opportunity in the digital space to target travelers.
The number of Korean outbound travelers has been rapidly growing, reaching 22 million outbound trips last year — a 19 percent growth over 2015. The Korean travel market is now 35 percent larger than Japan’s outbound market thanks in part to the stable currency, expansion of budget carriers and increase in paid holiday time.
Last year, 489,000 Koreans traveled to California and spent $1.1 billion. A 20 percent increase in the volume of visitors is forecast by 2020. The Korean travel market is highly seasonal with the most popular travel periods during summer and winter school breaks as well as the two biggest holidays, Lunar New Year and Korean Thanksgiving.
A dramatic growth in FIT travel led to the shift from “cookie-cutter” tour products to authentic, inspirational and more experiential travel.
The Challenges: Political uncertainties elevated over ousted President Park’s scandal have increased downside risks to the country’s economic growth, weakening consumer confidence and foreign investments; Koreans are also very conscious of safety issues, and the constant firearm violence in the U.S. is a major turnoff.
The Opportunities: “Solo” is the latest buzzword in Korea when it comes to searches for places to drink, eat and travel with an emphasis on the positive effects of self-care; new school policies excuse students’ absence for overseas trips during school weekdays, creating potential for targeted edu-tourism.
Marketing Tip: Dingo Travel and Travelholic are two new influential digital content providers who produce short, impactful video clips for mass distribution that generate great social media buzz.