Concerted efforts to attract Chinese tourists to Peru appear to be paying off

In 2015 more than 19,000 Chinese tourists visited Peru, an increase of 16% over 2014, making China the third-largest source market of Asian tourists to the country. In December 2015 Peru won the “Best New Potential Destination” award from Best Travel Media, the official media outlet of the China Association of Travel Services, a signal of the country’s popularity as a tourist destination. Throughout that year, the Ministry of Foreign Trade and Tourism (Ministerio de Comercio Exterior y Turismo, MINCETUR), along with the Promotion of Peruvian Exports and Tourism, had promoted Peru, targeting travel agencies, as well as leading media outlets. The effort paid off. In the first half of 2016, the number of tourists from China was up by 25% year-on-year, while visitor arrivals from Hong Kong, the strategic entry point for MINCETUR’s promotional efforts, rose by 27%, according to the ministry.

Removing Barriers

As of September 2016 Peru removed tourist and business visa requirements for certain Chinese citizens (namely, those with residency or short-stay eligible visas for the US, Canada, Australia, the UK and the European Schengen Area), and simultaneously extended the maximum visa-free stay in Peru for these same visitors to 180 days. The hope is that this will help significantly boost Chinese tourism to Peru.

A small increment in numbers can make a significant difference. For instance, if Peru were to target just 0.5% of China’s new middle class – estimated at around 109m people – that would be 5.5m potential new visitors, observes Martín Vizcarra, Peru’s minister of transport and communication, which puts a more compelling perspective on the government’s ambitious target for 7m tourist arrivals by 2021.

In the immediate term Peru hopes to triple Chinese visitor numbers to 60,000. According to Ctrip, one of China’s leading online travel agencies, bookings for Peru, both package tours and individual trips, saw a 90% rise as of September 2016, with a 100% rise in Peru searches and a 50% increase in bookings between August and September, as news of the visa exemption filtered through and travellers reacted.

Wealthier Chinese travellers dominated these bookings, according to Ctrip. According to PROMPERÚ, Lima, Cusco, Arequipa and Loreto are the most favoured destinations of Chinese visitors, who typically stay about 10 nights in the country and spend between $200 and $300 a day (for an average spend of $1391 in 2015). Almost three quarters, moreover (73%), opt to stay in four- or five-star hotels.

Upscale Visitors

The challenge for operators is not simply to expand the country’s luxury hotel capacity so it can welcome these visitors or to diversify the tourist offerings beyond Lima, Cusco and Arequipa; it is also to design tourism packages specifically targeting Chinese visitors, whether that be brochures and tours in Mandarin, specific food offering, or other services created with the Chinese visitor in mind. While Chinese package groups typically bring their own tour guide with them, there are other ways for Peruvian operators to cater to their needs. The general preference of Chinese travellers is to sleep on a firmer mattress than typically offered to US and European tourists, for instance, while a typical Chinese breakfast veers towards the heartier and more savoury, in contrast to the sweeter tastes of Western visitors.

Economist Carlos Aquino, an Asia expert and an advisor to MINCETUR, suggests there are also opportunities for Chinese tourism companies to invest in Peru. In August 2016 PromPerú took part in the second Pacific Alliance Tourism Roadshow in China, which exhibited in Shanghai, Beijing, Guangzhou and Hong Kong, the four main source cities for Chinese tourists to Peru. “Developing more four- and five-star hotels in Arequipa will help the city strengthen its position as a MICE tourism hub in the region,” Enrique Bedoya, general manager at the Cerro Juli Convention Center in Arequipa, told OBG. That roadshow followed an earlier visit in June to Lima by 20 Chinese tour operators, again under a Pacific Alliance initiative. In January 2017 Eduardo Ferreyros, the minister of foreign trade and tourism, hosted Hua Yitian, director of Beijing Wanda Tourism Investment, to discuss opportunities in Peru.

Straight Shot

While there are no direct passenger flights between China and Peru yet, under a new bilateral deal, China Eastern Airlines began operating a cargo flight in November 2016 between Shanghai and Lima for the exchange of goods, including fresh Peruvian products. President Pedro Pablo Kuczynski, who went to China for his first foreign trip abroad, has said that the development of new air routes between China and Mexico, and Mexico and Peru, is one goal his new government is working on to boost arrivals from China. Speaking at the 11th International Trade Summit organised by the Lima Chamber of Commerce in October 2016, President Kuczynski suggested that an accord with Pacific Alliance member Mexico could bring nearly 500,000 Chinese tourists to Peru. Speaking to OBG in March, Enrique Quiñones, president of the Peruvian Association of Receptive and Internal Tourism Operators, was optimistic, saying he expected growth of about 10% in tourism to Peru in 2017.

Like his industry colleagues, Quiñones also stressed the importance of diversifying Peru’s offer beyond the usual destinations so as to avoid the growing bottlenecks in key spots like Cusco. The advent of new low-cost flights to provincial destinations in 2017 is an exciting prospect for the sector, he noted, and in line with this he emphasised the need for strategic planning at all government levels, provincial and local included, to develop the industry for the medium term.

Opening Up

In terms of the Chinese market, Quiñones pointed out that not all Chinese visitors will benefit from the revised new entry requirements. Ideally, he would like to see a region-wide or Pacific Alliance visa scheme for tourists from places like China and South Korea, noting that these long-haul visitors tend to spend an extended period in the region, visiting several countries and destinations. There is also an argument, he suggested, for joint-marketing campaigns by the Pacific Alliance tourist organisations to further reinforce the growing awareness of and interest in Latin America in Hong Kong and mainland China.

These efforts are clearly paying off, with Peru celebrated as the best country to visit in the Americas for 2017 at the annual Shanghai World Travel Fair (SWTF), the leading travel expo in China, with almost 50,000 visitors and over 750 exhibitors from over 55 countries at this year’s event, held between April 20-23 2017.

Peru was chosen as ‘Best Destination in the Americas” by the SWTF organising committee in acknowledgment of its efforts to attract Chinese visitors, with strong praise for the Peru stand, which centred on Machu Picchu and was immensely popular with the Chinese public and other visitors to the fair. A number of Peruvian tour agencies attended the event. On the strength of this and its related promotional efforts in China, MINCETUR now expects to host over 35,000 Chinese visitors by year-end, compared to 22,000 in 2016.