American retailers love those high-spending overseas tourists — and they’re frustrated there aren’t more of them.
U.S. retailers are lobbying for a relaxation in the often-complicated visa rules for visitors from China, India and Brazil, three of the fastest-growing economies in the world. The difficulty in getting visas to visit America, particularly for Chinese tourists, causes them to flood stores in London or Paris rather than New York to spend their yuan.
“We are missing an opportunity to attract more international tourists to this country because of the difficult process to obtain tourist visas,” said Stephen I. Sadove, chairman and chief executive officer of Saks Inc. “This is especially true for the Chinese market, which is large and growing. Today, it takes an in-person visit to one of five visa offices in China, then a two-month wait to visit the U.S., in contrast to a 10-day wait for many European countries. As a result, they are visiting Europe and spending significant dollars there.”
David French, senior vice president of government relations at the National Retail Federation, said, “The numbers suggest there is a large block of visitors not making it into the U.S. because of visa waits. They are choosing to take their business elsewhere. I believe the wait is the worst in China.”
According to statistics from NYC & Co., Brazil tourists spent the most in New York City last year, with 589,000 people spending $1.6 billion. There were even more visitors from France, with 596,000, but they spent $1.3 billion.
In contrast, there were just 266,000 visitors from China, spending $877 million, and 185,000 visitors from India, spending $180 million. These are a fraction of the number of Chinese and Indian visitors to France or the U.K. The NRF says international visitors to the U.S. on average spend a total on $4,000 for shopping, food and beverages on each trip, whereas the Chinese spend closer to $6,000.
“When you go to the London or Paris stores, you see all the Chinese and you just say ‘why?’ Why can’t it be the same here?” said one senior level retailer who requested anonymity. “Over there [in Europe], the ability to get visas is so much greater.”
At Bloomingdale’s, “Chinese shoppers represent a growing part of our business. Hopefully, the ability to get visas becomes easier and the traffic from China becomes greater,” said Michael Gould, chairman and ceo. “Brazilian customers are coming here. That part of the tourist business has been enormous. We don’t see the same thing from India at this time.”
There are signs American government officials are beginning to notice the problem. Two weeks ago, Rep. Joe Heck (R., Nev.) introduced legislation to ease delays in the visa application process for Chinese, Indian and Brazilian. The legislation calls for increased staff at embassies and consulates in China, India and Brazil to process visas in 12 days or less. It can take 10 times as long in China, and even longer in Brazil. Heck said his “Welcoming Business Travelers and Tourists to America Act” would streamline the visa process, create hundreds of thousands of jobs and pump $850 billion into the stalled economy.
The bill also calls for a pilot program to conduct interviews for visas by videoconference rather than in person, and to list wait times online. A report on how the State Department is dealing with the demand for applications would be required, and Heck is also seeking to extend the life of visas to Chinese citizens from one to 10 years. Costs for the changes would be covered by increasing visa application fees or adding fees. The bill was submitted to the House of Representatives and is expected to be put up for a vote in committee soon.
“The issue is reaching a head because the economies of these three countries are growing at a pace three to four times that of U.S. growth,” French said. “We view this as a customer service problem. Can the State Department meet this customer service problem in a way that cuts down wait times and lines? The time required to get a British visa for a Chinese citizen would be about 11 or 12 days, compared to 56 to 120 days” for a U.S. visa. “It depends on which consulate office in China where the visa application is made.”
He said the State Department has been reluctant to make changes unilaterally and does not want to do videoconferencing, but has made some modest changes, such as starting to waive visa renewals for Chinese visitors with visas expired within one year. “We think they should expand that to two years to clear the queue faster,” he said.
French also said the long visa times hurt U.S. retailers seeking to bring in staff from overseas for training to work at overseas stores. The situation also hurts foreign retailers who want to come to New York for trade shows, such as NRF’s annual convention in New York.
“There’s more scrutiny all over in allowing people and packages to come into the country,” noted Tom Cusick, president of the Fifth Avenue Business Improvement District, who suggested the tightening up could be related to Sept. 11.
Heck’s bill is a follow-up to the Travel Promotion Act, signed into law last year by President Obama. It added a $10 fee to visas, and that income would be added to $100 million in private investment to fund efforts to promote the U.S. abroad as a destination for travelers. Previously, the U.S. had been one of the only developed countries in the world without a system to market itself as a destination. According to the U.S. Travel Association, if the U.S. had kept pace with global competitors, 78 million more travelers would have visited the U.S., adding $606 billion to the economy over the past 10 years. The USTA also believes that simplifying and speeding up the visa process could create 1.3 million more U.S. jobs and add $859 billion to the economy by 2020 at little or no cost to taxpayers.
Meanwhile, the Chinese are descending on European stores.
“At Harrods, Chinese shoppers represent a significant and growing proportion of Harrods’ top-tier customer base,” said a spokeswoman. “The fine jewelry and watches, fashion, fashion accessories, beauty and wine departments are of key interest, with Chanel, Hermès, Cartier and Louis Vuitton among the preferred brands.
“The introduction this year of over 100 terminals for Union Pay [China’s only domestic debit and credit card] has resulted in a strong response from our Chinese visitors and has been a key factor behind growth of sales to these customers,” she added. “To ensure they receive the optimum shopping experience we have over 70 Mandarin speaking sales staff on hand and Mandarin store guide leaflets, along with key services including worldwide shopping, Harrods Global Blue Tax Free Shopping, later summer opening hours and Harrods Rewards scheme.”
Some 900,000 Chinese tourists visited France in 2010, up 23.4 percent on year, according to French government figures. Those tourists spent 400 million euros, or $543.8 million at current exchange, an increase of 19 percent compared with 2009.
Pierre Pellarey, managing director of Printemps’ Boulevard Haussmann flagship, said international visitors represent 30 percent of the retailer’s business, and China has become the leading contributor over the past two years, ahead of South Korea and Japan, and with an average spend of 1,300 euros, or $1,767 at current exchange. “They come for the international luxury brands, especially accessories and high-end timepieces,” he said.
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