PBN, September 19, 2012

http://www.bizjournals.com/pacific/blog/2012/09/chinas-super-golden-week-could-mean.html

Hawaii’s tourism industry can look forward toPBN: China’s ‘Super Golden Week’ could mean gold for Honolulu retailers a potential increase in business from Chinese visitors beginning Sept. 30 as travelers from China take advantage of the extended holiday period that happens only once per decade — the convergence of Chinese National Day and Mid-Autumn Lunar Festival.

According to Nihao Media, travel to most American cities from China is booked for this period known as “Super Golden Week” and that in the United States, most Chinese visitors stay and spend their money shopping in Honolulu, New York, Las Vegas, Los Angeles and San Francisco.

Chinese visitors in Honolulu spend more per person per day than visitors from any other market, a projected 2012 average of $396, according to the Hawaii Tourism Authority. They’ve also begun staying in Honolulu for longer periods of time, making it a destination of choice rather than a stopover to or from the Mainland.

The biggest beneficiaries of the Super Golden Week will likely be luxury retailers, according to Catherine Lin, editor in chief of Nihao America, a magazine for wealthy Chinese tourists. Nihao Media research shows that wealthy Chinese visitors to the U.S. spend close to $2,500 on shopping per person per day.

Lin says that some can pay for their trip with the savings in shopping, since luxury items cost 30 to 40 percent less in the U.S. than in China.

The key for Honolulu retailers to cash in will be to have in-store staff members that speak Mandarin, accept China Union Pay debit and credit cards in their stores and to market to customers in a culturally-friendly manner, Lin recommends.

We've all heard it. China will be the next leading economy in the world. With stats such as their GDP growth rate of 223% increase in the last 7 years (according to Google public data as of 2011) and the country's growing influence in the world, we may be seeing just the tip of the iceberg. Hawaii, the State closest to China (approximately half the distance between China and the next State) has reaped handsomely from China's growth in the last couple of years and stores such as DFS Galleria have the numbers to prove it. "Chinese visitors spend more than double what DFS' primary Japanese customers do, said Sharon Weiner, DFS spokeswoman," Kristen Consillio of Star Advertiser reported.  

For more about the effects of Chinese tourists on DFS Galleria, please read:

http://www.staradvertiser.com/businesspremium/20120714__Chinese_influx_energizes_DFS_in_its_50th_year.html

Chinese influx energizes DFS in its 50th year

The store has begun offering high-end items that appeal to the new market

By Kristen Consillio

POSTED: 01:30 a.m. HST, Jul 14, 2012

DFS Hawaii celebrated its 50th year in business this week. The company has seen firsthand the evolution of Hawaii's visitor market and remained resilient amid severe downturns in the tourism market that it solely relies on to stay afloat.

DFS Hawaii, which started as Duty Free Shoppers, a small concession for travelers at Honolulu Airport in 1962, has managed to adapt to the state's changing mix of tourists, most recently refocusing its merchandise to meet the needs of the more affluent Chinese customers slowly gaining a presence in the islands.

"There was no Chinese market for a long time," said Robert Miller, co-founder of parent company DFS Group Ltd., based in Hong Kong. "The Chinese market is now a very important market. Our merchants have to be constantly aware of what the Chinese want."

Chinese visitors spend more than double what DFS' primary Japanese customers do, said Sharon Weiner, DFS spokeswoman. Typically, Chinese men are the consumers buying high-end watches, the priciest of which has sold for $142,300 at the DFS Galleria in Waikiki.

The company that once featured lower-priced souvenirs such as key chains, T-shirts and cellphone trinkets recently sold a one-of-a-kind crocodile Hermes bag with a diamond clasp for a jaw-dropping $191,200.

"We're seeing an increase in the numbers from China. … Their spending is very, very impressive and very important to us and to the state," Weiner said. "People who leave China right now tend to be more affluent. One thing the Chinese like is that we can guarantee authenticity, and in China there are a lot of knock-offs. Hawaii is iconic to the Chinese. It's a very big deal for them to come here."

DFS recently opened two large stores in Hong Kong and Macau.

Over the past two years, the only duty-free retailer in Hawaii has invested roughly $55 million in improvements to the DFS Galleria and airports in Honolulu and Kahului.

The business, which has 770 employees, some of whom speak Chinese, Korean and Japanese, is required to pay concession fees that amount to 22 percent of duty-free sales by international travelers. To date, DFS has paid more than $3 billion in concession fees to the state.

"We've fluctuated very much with the Japanese economy," Miller said. "If tourists don't have disposable money to spend, it has an immediate impact on our business."

DFS Hawaii got its start when Miller, on his way to Hong Kong in 1960, visited a college friend who ran a flower and greeters concession at the then-World War II vintage airport in Honolulu. Two years later Miller received a telegram in Hong Kong from his friend in Honolulu announcing that the bid details for a new duty-free concession had been released. Miller subsequently sent him a $50 check to mail the bid documents, which he said was his best $50 investment ever.

Upon winning the bid, he paid the state an average of about $30,000 a year for the duty-free concession, which now commands $32.3 million a year.

With the changing dynamics of the global market, Miller is confident the Chinese will make up a larger share of DFS' customer base in the upcoming years.

"Hawaii is hugely popular. Hawaii by itself has a great future for tourism," said Miller. "They need a lot of coordination between the airlines and the government. We see it growing now even with all the difficulties of getting visas. The masses haven't started yet. The milk hasn't arrived yet."