China Monthly Activity Report California Travel and Tourism ...

CTTC China August 2009 Report Prepared by East Communications
China Monthly Activity Report
California Travel and Tourism Commission
August 2009
I. Industry Update:
China among the first to pull out of global recession
A. China Economy Update
China Central Government continues to implement its infrastructure-oriented “RMB 4
trillion” fiscal stimulus which has led to a surge in new bank lending. Governmentinfluenced
investment has soared. Market-based investment has lagged, although
positive signs have emerged in the real estate sector. Consumption has held up well.
Very weak exports have continued to be the main drag on growth, but import volumes
have recovered in the second quarter of 2009 as raw material imports rebounded. In all,
China’s growth is unlikely to rebound to very high single digit rates before the world
economy recovers. It is projected GDP growth of 7.2 percent in 2009 and 7.7 percent in
2010, top the growth among leading economies.
(Reference: World Bank)
B. Chinese Yuan Exchange Rate
With the alleviation from the global recession, currency exchange rates in China has
stabilized. Exchange rate of Chinese Yuan to a US dollar stays at 6.8319 level. This rate has
been stable since early this year.
(Source:Bank of China)

CTTC China August 2009 Report Prepared by East Communications
C. China’s foreign exchange reserve
In the end of June, 2009, the China’s foreign exchange reserve remaining at
2,131,600,000,000 US dollars, growing at the rate of 17.84%. At the end of June the RMB
exchange rate is 1 US dollar exchanges 6.8319 Yuan.
(Source:Bank of China)
(Source:Ministry of Finance)
China’s foreign exchange reserve
Nielsen: Destination promoters should advertise on internet
Jan-Jun 2009 Financial Revenues
Unit: billion USD
End of January 2008 End of March 2009 End of June 2009
The Internet has become the most popular medium for Chinese travelers seeking information
about their trips, according the latest Nielsen China Outbound Travel Monitor in August
2009. The Nielsen survey found that travelers will search for conventional destination
information ahead of their trips (61 percent of leisure trips taken), and then turn to online
travel discussion forums (48 percent) to fine-tune their plans -- suggesting that opinions and
comments about travel experiences posted to online forums are nearly as likely to influence
travelers’ decisions as the destination websites themselves. Conventional travel agents were
approached on only two in five (41%) travel occasions. (Chart 1)
The Nielsen survey also found that travelers were much more likely to recall seeing Internet
advertising for travel destinations, compared to seeing travel advertising on other mediums.
Close to 70 percent could recall seeing travel advertisements on the Internet, with only four in
10 recalling seeing a travel ad in a magazine or newspapers, at a travel agent, or on TV and
radio. (Source: Nielsen China)
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CTTC China August 2009 Report Prepared by East Communications
China tourism market new regulation
Widely considered as the Chinese government stepping up to crack down bad practices in the
tourism industry, the China National Tourism Administration passed a bill on May 1, 2009 to
root out zero-fee tour packages in order to protect tourists' interests and ensure a healthy
development of the Chinese tourism industry. The violator will be fined the maximum of
RMB500,000 (appr US$73233.5).
Zero-fee tour packages are those that charge travelers no upfront costs, or fees lower than the
real cost of services, for transportation and lodging. However, travel agencies gain their money
by often charging travelers exorbitant rates at souvenir stands, scenic spots, or restaurants.
Travelers often complain that they feel cheated.
The practice has been widespread on the Chinese mainland since the SARS epidemic in 2003.
The mainland agencies picked up the trick from Thai agencies when partnering on Southeast
Asian routes. It applied to almost every route, from several hundred yuan domestic trips to
high-end European tours.
This practice obviously damaged the Chinese tourism market, says Shao Qiwei, director of the
CNTA. From 2006 CNTA has taken action to end the illegal activity of travel agencies and tour
guides, which lead to a total fine of RMB 20 million (appr. US$2,929,342). Shao Qiwei also said
that the CNTA will pursue their course to clean up the travel market of “zero-fee” package tours.
Establishment of US China Inbound Travel Association
The US China Inbound Travel Association was established in Los Angeles on August 27, 2009.
The association aims at promoting tourism business between the US and China. Its 150
members are mostly composed of tour guides, travel agencies, coach companies and tourism
product providers in the Chinese community in the US.
China Overseas Travel Trends
The numbers express the potentiality
of China’s outbound market. China has
become the largest tourists generating
country in Asia. The fast development
of China’s outbound tourism market is
changing the shape of Asia-pacific
outbound tourism market and that of
the world.
Under the impact of the Global
financial crisis, the number of western

CTTC China August 2009 Report Prepared by East Communications
tourists traveling around the world shrunk substantially. In the meantime, however, the ratio of
Chinese tourists in the international tourism market increased. This has attracted the tourism
bureaus and the tourism-related enterprises of various nations to flock into some large cities
such Beijing, Shanghai and Guangzhou to do business promotion and attract customers.
China’s domestic tourism to grow
China Tourism Research Institute’s research indicated the number of domestic tourism is
expected to see over 200 million travelers, up 13% than last year’s. And the tourism revenue
will come to more than 100 billion yuan (appro US$14,646,713,936), which represents an
increase of 25 %. As the vacation time increased by 1 day, the tourist spending per capita will
climb from 448 yuan (US$65.62) in 2008 to about 500 yuan (US$73.23) this year. Meanwhile,
the number of the outbound tourists is expected to hit around 600 millions during the Golden
Week.
China’s October Golden Week to peak travel
The forecast analysis pointed out that the October golden Week is the most important week in
the Chinese tourism industry. The number of travelers and the tourism revenue from this week
is usually 1.6 times more than that from the Chinese New Year Holiday. According to the
research in this year, the Golden Week tourism industry is in a good condition so far and
business performance is significantly improving after the H1N1 setback. However, the fear to
the H1N1 influenza remains a major factor that is affecting the tourism economy.
Agency and Transportation Trends
China Eastern Airlines, the 3rd big airline in China, completes with the 5th big airline -
Shanghai Airlines on July 13, becomes the biggest influence of the east China area. China
Eastern Airlines has opened the Shanghai - Los Angeles's scheduled flight (1.3.5.7), and
the Shanghai Airlines also plans open the Shanghai - Los Angeles's scheduled flight in the
next year.
From now on, every foreign student passenger from Beijing or Shanghai, depends on the
effective student visa, can obtain an extra checked luggage by booking the UA ticket in
its Chinese website.
On June 3, Delta Air opened its Shanghai to Detroit direct flight. By adding its flights to
Detroit, Delta passengers can have access to an addition of 250 local cities.
On June 22, Air China announced that it is extending its North America call center
service to the entire Canada. This call center is located in Los Angeles, USA providing
Chinese and English bilingual services. The free service hot line is 800-882-8122 with
service hours for American Eastern Time Monday through Friday from 6am to 5 pm.

CTTC China August 2009 Report Prepared by East Communications
On June 4, the American biggest travel company American Tours International, joined by
CTS Shanghai, CITS Shanghai, CYTS Shanghai, SAL Shanghai and Kang-Hui Shanghai,
founds the “Trust Travel Alliance (TTA)” jointly in Shanghai. They promoted 3 highquality
traveling lines including “Cross America”, “The Classic Tour”, as well as “The
Happy Sunshine Tour”. It is reported that “Cross America”, 20 days of US culture
experience, was launched on August 9.
Post H1N1 Rebound in outbound travel in China
The H1N1 Flu has kept the Chinese tourists grounded since its outbreak early this year.
However, an August survey of Chinese motivation to travel has resumed to a 95% of normal
level, according to the China Tourism Research Institute. United Airlines’ booking in August for
economy class is 100%.
The National Day holiday (Golden Week) and Mid-Autumn Festival fall on the same week and
thus create the longest "Golden Week” in the history. China Tourism Research Institute
forecasted the highest holiday spending in the upcoming "Golden Week” because of the
increasing traveling desire.
II. Activity Updates
A. Technology
1. CTTC Chinese official Website
CTTC China office launched its official Chinese
website after its opening events earlier this year.
The completely localized Chinese website offers
information for both Chinese tourism industry
and Chinese consumers on the tourism resources
that California offers. Branded “Sunshine
California, Window to America”, the website also
draws links between China and California on our
historical ties through culture, immigration,
education and travel. Following the launch of the official Chinese website, China office
maintains a monthly update on the content offering “Quick News”, new images and updated
Chinese press releases to the website.

CTTC China August 2009 Report Prepared by East Communications
B. Communications
1. China Travel Channel “Sunshine California” TV segments
With over 300 million
viewers in China, the only
nationwide travel TV China
Travel Channel is in
California to film its first
California travel series
“Sunshine California” (name
is tentative). The TV series
has three segments, each
have 24 minutes air time. It
is scheduled to air in the
end of October.
The three segments feature the abundance of California tourism resources and the Americana
culture that travelers can experience. The crew will film in Northern California with home stay
at a ranch to strengthen the “cowboy” icon. They will go through the wood, the parks, the coast,
the cities, the gateways through Highway 1 enjoying music “Hotel California” in the car. They
will get lessons with surf champion and enjoy an entertainment star like treatment in
Hollywood.
The strategy for this TV series is to reinforce the Americana icons to consolidate California as
the Window to America. At the same time, a lot of new products that are identified as market
drivers will be filmed to support the California Travel Meals program.
2. Monthly e-newsletter
CTTC China office has distributed its first Chinese newsletter in the summer. The
Summer edition features seasonal information about California and an updates of CTTC
China office events over the last quarter.
CTTC China office translated, edited and distributed the Summer issue e-newsletter to
781 subscribers, including travel agents, media on August 6th.
3. Monthly press releases
Four press releases were sent out to 781 contacts which include travel agents and media in
China. The topics were: 1) Summer Travel; 2) San Diego Zoo Panda gave birth; 3) 6 leading tour
operators to create California ONLY products; 4) Wine season is here. Circulation: 338 million.

CTTC China August 2009 Report Prepared by East Communications
4. Media Visits
Beijing
Shanghai
Visited state own China News Services (AP equivalent)'s deputy chief editor
Visited editor-in-chief of Golf Magazine
Participated in the World Magazine's press conference about Celebrity Travel
Visited major travel magazines “world traveler”
Visited travel magazine ”travelling scope”
Visited Shanghai Security Post (major business newspaper for MICE)
Guangzhou
5. Media leads
Visited Guangdong TV
Visited Guangdong Radio
Visited the Cruise Channel
CTTC China office has garnered several media leads that are from influential lifestyle media.
California Place Shanghai media fam (5 media outlets) to California
CTTC China has provided assistance in developing a media itinerary for a fam tour of six
sent by a property developer “California Place Shanghai”. The five media include
Oriental Morning Post, Sina.com, JiefangDaily, CBN TV, DocumentlyTV. The fam is
completed in August. The ROI for this fam is 20 million population.
California Place Shanghai is a residential project that pledges to bring the California
lifestyle to Shanghai to California living.
Guangzhou Cruise TV December fam
Cruise TV is the only channel that is designated to travel alone. The TV station has
already developed a fam tour on Wine tasting in August 2009. They are planning to
organize another fam tour to California and have asked for assistance in developing
their itinerary. CTTC China has met with them to suggest a “All Seasons theme” for their
fam tour. Since December will be the season for winter sports, and a Southern China
audience always dreams of a “White Christmas”, this theme will be able to feature the
nature wonder (California Travel Meal) in the snow, shopping for Christmas (California
Travel Meal for high end experience) and others. Guangzhou Cruise TV has an audience
of 60 million.

CTTC China August 2009 Report Prepared by East Communications
C. Travel Trade Marketing
1. Coop with Tour Operators
In order to promote California Travel Meals which is the crust of the travel trade program
for 2009-2010, CTTC China has discussed with leading tour operators and wholesalers in
China for their support of the program. The way of cooperation is as such: Airlines in the
region will lead the project. They will offer competitive rates to lower the travel cost which
is always key in the China market. We have secured the participation of UA and Korea
Airlines. The airlines companies and CTTC China will invite the tour operators and
wholesalers to discuss marketing and advertising campaigns to fully execute the program
with the consumers. CTTC China will provide informational support in terms of itineraries,
local connections, and some earned media coordination. Thus far, CTTC China has solicit the
following partners to work with in the pilot phase of the program. It is with the
understanding of the airlines that there will be five or more local operators/wholesalers to
participate in the program. The objective of this coop consortium is to launch new California
products for Chinese New Year Golden Week travel which is in February of 2010.
China Youth Travel Services (CYTS), Beijing
China Travel Services (CTS), Beijing
China Travel Services (CTS), Shanghai
China International Travel Services (CITS), Shanghai
Shanghai Jinjiang Tour group co.,ltd
Galaxy tour Shanghai: large wholesaler
UTS tours Shanghai--Hua Mei Holiday
Panda China Travel Services (Panda CTS), Guangzhou
China Merchants International Travel Services (Merchant CITS), Guangzhou
Guangdong Driving Association
Mercury Shanghai (Wholesalers)
2. Coop with airlines
The airlines support is fundamental to the success of California Travel Meals. The CTTC
China office has entered two agreements with Korea Airlines in Shanghai (most popular
airlines in Eastern China) and UA in Guangzhou (most popular airlines in Southern China).
An agreement is being negotiation with UA in Beijing which is already our sponsor for the
Sunshine Super Fam in November for 15 media journalists and 15 travel trade executives.
To increase the publicity for the airlines, we are exploring the option of incorporating the
airlines’ names into the products for their region. For example, KE Sunshine California will
be for Eastern China. UA Sunshine California will be for Southern China.

CTTC China August 2009 Report Prepared by East Communications
3. Tour operator sales visits August 2009
Beijing and northern China
Beijing CYTS
Beijing CTS MICE department
HUAYUAN INT’L Travel Service
Phenix Int’l travel Service
Anjie TOURS
Beijing CITS
Comfort int’l Travel
Shanghai and Eastern China
Shanghai Business Int’l Travel Agency
New SCITS
China Merchants Int’l Travel
Galaxy Tours Shanghai
SSITS
CTS Mice Center Shanghai
Shanghai Women International Travel Service
Guangdong and Southern China
Guangdong news way travel & Leisure INC
CITIC International Travel (Guangdong) Co. Ltd. Event Sharp
CYTS MICE Dept.
GZL International Co.
Airline partners ANA airline
4. TT business leads
Shanghai Business int'l Travel (SBIT) service has a 47-pax group to California in July. Last
month we have already introduced CA Disneyland and Universal studio to them so that
they could develop cooperation with each other and SBIT wishes to have Chinese
brochures, CA hotel info from us.
Shanghai Merchant Int'l Travel is doing a California and Mexico 11 days itinerary which
is a new itinerary for China Market. The fist 25-pax group will depart on Oct 1. We have
made suggestion to them to extend the California days of stay. They agreed and we will
see if the first group is successful.
SSITS, they are doing a government group to CA late August to inspect SFO and LAX
airport region. We are coordinating with SFO and LAX related departments and

CTTC China August 2009 Report Prepared by East Communications
organizations to facilitate the trip for this group. The group will stay in CA from AUG 31
to SEP 6. They did not plan to stay California at first but we had convinced the director
of SSITS and helped her to get the invitation letters from SFO and LAX so finally they
agreed to travel in California.
New SCITS focuses on the whole America 14-day tour, west coast 10 days tour which
includes California and Las Vegas. We are in the process of discussion with them about
how to include our California Travel Meals to their itinerary.
Shanghai Women Int'l travel service is planning to do a winter student tour. They hope
that we can provide school info for them and homestay resource in California. We have
discussed to cover some other attractions in their itinerary. They wanted us to provide
NAPA winery info to them. They are now negotiating with China Eastern airline to get
reduced air tickets so as to enable them to make California-only itinerary.
CTS MICE SH hopes we can provide MICE info of California to them. This year they are
affected a lot by H1N1. But they wish to prepare ahead before H1N1 dies out.
CTTC China office is in talk with Galaxy Tour in Shanghai about their Chinese New Year
tour to California. Estimated participants is 500 pax.
Guangdong new way travel & Leisure INC wants to develop driving tour products. They
arrange many business groups for the local government. They feel driving tour has its
Potential market. They want CTTC china office to provide them with some driving
itineraries in California.
CITIC helps Sunrider arrange 100 pax to Orange country this month. They are going to
hold a NBA Club to attract the attention of NBA fans. They are going to coop with the
Guangzhou and Guangdong Sports Bureau and Basketball Association to promote NBA
tour products. They feel there will be a trend. Many people are very fanatical about NBA.
CYTS Guangzhou wants CTTC China Office to provide relevant information when they
deal or negotiations with their customers.
GZL Guangzhou International Co. is one of the tier one tour operators in Southern China.
They are very interesting in developing an 8-day California itinerary. CTTC china will
suggest itinerary to them. One of their flagship stores will do roadshow in an IT
neighbourhood to promote outbound tourism products.
ANA airline is seeking coop opportunities with CTTC China office. They are trying to tap
in the U.S market. They have point to point flight from GZ-NRT-SFO and GZ-NRT-LAX
daily. They offer attractive price for business class tickets
Beijing Grand Tour has a 16 pax Golf Manager fam coming to California and Las Vegas.
CTTC China has provided assistance in itinerary and hosting them in Palm Springs and
Pebble Beach/Monterey. LA INC and SFCVB are also participating partners of this
initiative. They have taken care of the LA and San Francisco portion of the itinerary.
These managers are now planning for two consumer tours to California – on ein end of
September and other in early November.

CTTC China August 2009 Report Prepared by East Communications
5. August Tour Operator Fam
CTTC China organized the first Travel Trade Fam tour
to California in mid August. The executive level fam of
six participants are also supporters of the California
Travel Meals. As a result, the fam was product
development in nature. They were in California to
scout for new products to add to their existing
itineraries. This is the strategy that CTTC China adopts
which is to extend the length of stay beyond a 3 days
regular itinerary. When the tour operators returned
to China, they are engaging in discussion of launch
new California products.
These six are CYTS and CTS in Beijing, CTS and CITS in
Shanghai, and Panda CTS and Merchants CITS in
Guangzhou. Their products will be California ONLY.
Their fam tour was of three regions in California –
Northern Cal, Central Cal and Southern Cal. They were
taken to new destinations (for the China market at
least) and attractions that are supported by research
as market drivers. Nature, wine, the coast,
universities, Silicon Valley, etc are on the list.
6. Shenzhen & Guangzhou Road Show
China office in Guangzhou participated in the
South China road show organized by the US
Commercial services in the Guangzhou
Consulate. Most of the US tourism bureaus in
China attended this road show to the
Guangzhou and Shenzhen market. China staff
presented a Powerpoint Presentation on
California and facilitated media stories on
California. Staff networked with local tour operators in Guangzhou and Shenzhen. The
participation in such road show strengthened CTTC's partners with the US Consulate in
Guangzhou by supporting their show. CTTC China is already in talks with the airlines and the
operators whom we met in the road show for coop on the California Travel Meals.

CTTC China August 2009 Report Prepared by East Communications
D. Training
1. China Office training Fam
The China office training Fam was from August 7 – 16.
Four staffers from China office participated in this
training fam and obtained a lot of useful information
from the fam. They have taken the classic routes in
California, travelling from Northern California through
the coast down to the South. Staff interacted with the
CVBs that they met and have a better understanding
of the products.
2. California Generic Powerpoint
China office has completed the generic version of
California Powerpoint in Mandarin and English. The
Powerpoint will be used in tradeshows, training
seminars, roadshows, etc.