Chinese Tourism is Low-Hanging Fruit

by Reihan Salam

Given that the U.S. has a very well-developed infrastructure for domestic tourism, attracting more foreign tourists makes a great deal of sense, as the cost of upgrading various public and private infrastructures would be more than outweighed by the increase in economic activity. Mina Kimes observes that Chinese tourists in the U.S. are fueling a mini-boom. In 2011, the U.S. attracted over 1 million Chinese voters, more than twice the amount that had arrived in 2008, and the Commerce Department anticipates that the number will more than double between now and 2017. Each Chinese tourist spends $6,000 per trip on average, expenditures that count as exports that improve the U.S. balance of trade. 

The surge in tourist spending offers an elegant solution to one of the economy’s structural problems — a way for the U.S. to tap into the growth in emerging markets while exploiting its own strengths, including its popular culture, its safety, and its large service workforce. More than 5.4 million Americans work in travel and tourism, and their jobs cannot be easily outsourced. Tourism is one of the few areas in which mature economies are still outperforming emerging ones, mainly because people from Third World countries want to visit First World ones.

Yet Kimes argues that the U.S. is failing to capitalize on this opportunity, despite its powerful advantages:

And yet America’s share of global tourism spending has declined since 2000, from 17.5% to 11.2%, according to the World Tourism Organization. The U.S. may be luring more visitors from China, but it takes in just a sliver of that country’s tourist expenditures, which hit $73 billion in 2011. More Chinese tourists preferred France, the world’s leading destination, that year. Many foreigners view the U.S. as unwelcoming, citing its stringent security measures. “Don’t invite people here and then make them wait two hours to get in,” says Bill Talbert, the head of the Greater Miami Convention and Visitors Bureau.

Part of the problem, she explains, is cultural. During her trip with a Chinese tour group, Kimes fumed as employees at U.S. theme parks and restaurants treated their Chinese customers with contempt. This behavior is a luxury that service sector firms can ill afford. The article is eye-opening.

And it reminds me of a conversation I had some years ago with a friend who lamented that unless the U.S. gets its economic house in order, the brightest future we can expect for our children is that they will become ski instructors to affluent Chinese tourists. What my friend didn’t acknowledge is that even if the U.S. gets its economic house in order, charging exorbitant prices to affluent Chinese tourists is not a terrible way for a young person who loves the outdoors to earn a living, but of course one would hope that there would be other options. 

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.