Heathrow ‘Passenger Ambassadors’ Secretly Encouraging Chinese Travelers to Spend Money at Airport Stores

Chinese woman reading the STC magazineAn investigative report by the United Kingdom’s Channel 4 revealed that Heathrow Airport’s 250 passenger ambassadors—service staff helping travelers at the airport—are actively trying to entice tourists to spend money at airport stores. Passenger ambassadors, who were revealed to earn commission from promoting airport stores’ special offers, were found to often actively pursue Chinese travelers as they are identified as the most likely customer segment to spend big inside the airport.

The Channel 4 report, titled Dispatches: Inside Britain’s Airports, unveils that Heathrow Airport’s passenger ambassadors are responsible for what can be considered unethical behavior. By using hidden cameras and undercover reporters, reporters found that, rather than helping passengers, Heathrow’s passenger ambassadors were eager to nudge tourists toward shopping at the airport’s many stores and restaurants. The Daily Mail, which also sent reporters to the airport to investigate, had one if its reporters ask a passenger ambassador for help to find her gate, only to find the ambassador ignoring the question and instead recommending where to find the “best shops and restaurants.”

In a segment of the Channel 4 report, one of Heathrow’s passenger ambassadors described that after successfully encouraging a traveler to spend money at one of the stores, store clerks would provide information on the amount spent by the traveler, which is then recorded in a terminal. According to the report, Heathrow ambassadors have the target of generating up to 4,000 GBP (US$4,960) in sales every day, with one ambassador claiming to have generated sales for as much as 10,000 GBP (US$12,403) in a single day.

Some airport ambassadors interviewed for the report also admitted to actively targeting Chinese tourists, since they’re perceived as more likely to spend substantial amounts of money in the airport’s retail outlets. The report by the Daily Mail further corroborates this claim and describes one of Heathrow’s passenger ambassadors seen “pursuing a man of Chinese appearance for 100ft, while a couple was forced to ignore another ambassador as she skipped beside them gesticulating outside the Cartier store.”

According to the job description that an undercover reporter received when applying for the job, “the majority of the role will involve interacting with passengers, persuading them to shop if they had not planned to, or encouraging them to spend more by talking to them about offers and promotions.” In contrast, a spokesperson for Heathrow airport described the practice as follows: “We provide fantastic restaurants and stores in order to offset the cost of running the airport, which keeps the cost of air fares down. Passenger ambassadors are an important part of our business, and we expect the team to put the needs of passengers first.”

While some experts interviewed for the investigative piece questioned how ethical it is to use employees who are described as there to help travelers for promotional services, none questioned the legality of the practice.

In the United Kingdom, the growing number of Chinese travelers that the country receives is perceived as a crucial engine for growth in the retail sector, particularly after the Brexit referendum which saw the British pound plunge in value against the Chinese yuan. With countless media reports describing Chinese tourists as “flocking” the country for luxury shopping as the value of the pound dropped, it should perhaps not come as a surprise that sales promoters working on a commission basis actively target this particular customer segment. For airport retail, just like other sectors in the tourism and retail industries, Chinese travelers is a customer segment to be reckoned with—with initiatives that encourage further spending among Chinese travelers potentially extremely lucrative.

Source: Jing Daily / Channel 4

Mainland Chinese shoppers accounted for 75% arrivals in Hong Kong in 2016

Chinese power couple - China Elite FocusShoppers from mainland China contributed 35% of Hong Kong’s total retail sales in 2016, which is up from 15% 10 years ago.

Visitors from mainland China now account for 75% of the tourist arrivals in Hong Kong according to Hong Kong Tourism Board reports, up from 54% in 2006.

Mainland travelers spend an average of 2.7 nights in Hong Kong per trip and spend more than CNY20,000 (US$2,900) each time they visit. And while 5 in 10 visitors buy jewelry and watches on their trips, some visitors who come to enjoy the food (51%) and culture (40%) who spend 10% more during their stay than those who come just to shop.

According to Nielsen’s recent study, Hong Kong covers off on the top 6 reasons that consumers look for when they consider regional travel. Online travel agencies and social media are dominant influencers to mainland Chinese travelers, at 95% and 49%, respectively according to Nielsen.

The Brexit’s One Bright Spot: More Chinese gentlemen getting bespoke suits in London

The STC magazine Sept 2016 CoverA volatile stock market, downgraded credit rating, and plunging pound may be some of the economic woes plaguing the UK after the Brexit vote, but there is one thing that seems set to go up in the near future: Chinese tourist numbers.

According to a recent report in Shanghai Daily, travel agencies are seeing a surge in Chinese travelers booking tour packages to the UK as travel and shopping in the region are set to become much cheaper. According to Chinese travel agency Shanghai Spring Tour, all of its tour packages to Britain have now been totally booked for the summer. Meanwhile, Ctrip has also seen a jump in bookings to the UK.

“An interesting reason for this increase of London travel for affluent Chinese men is the new trend for bespoke tailoring”, said Pierre Gervois, Publisher of the Shanghai Travelers’ Club (STC) magazine, a digital luxury travel magazine for wealthy Chinese gentlemen. “As London is probably the best city in Europe to get a bespoke suit, a growing number of Chinese gentlemen are going to London to see their tailor – such as Benson & Clegg, for example, and take advantage of the favorable exchange rate as well”, Pierre Gervois added.

Advertisement Tower - Gervois Hotel Rating May 2017 featuring Pierre GervoisWith shopping a high travel priority and an acute awareness of where to seek out the best prices of luxury goods and avoid mainland tariffs, Chinese tourists have been known to follow currency fluctuations to get a good deal. This has been one factor in the recent Chinese spending boom in Japan as the weak yen means cheaper prices of luxury goods and premium Japanese brands. When the ruble rapidly plunged in 2014, Chinese travelers and daigou sellers rushed to Russia and cleared out entire luxury boutiques thanks to the cheap prices.

The UK has long been working to attract more Chinese tourists, but its exclusion from the Schengen Area has made the visa application process cumbersome for visitors from China. As groups such as the luxury retailer-led UK-China Visa Alliance have lobbied for easier visa access, the government has made changes such as a two-year multi-entry visa policy for Chinese travelers as well as a partnership with Belgium to grant Chinese visitors with a Belgium-issued Schengen visa access to the UK.

But these efforts for greater EU-related visa access may now be undone, showing it’s not all good news when it comes to Chinese tourism in the post-Brexit UK. UK-Europe package tours could take a hit as participants traveling to both the UK and European countries would have to declare tax-free goods brought from the UK into Europe. This includes not only European countries, but also Ireland, which will now see fewer Chinese tourists entering form the UK.

In the long run, Chinese tourists are risk-averse when it comes to making their travel plans and tend to avoid places seen as politically unstable. The perception of increased political and economic instability could also deter the Chinese real estate buyers who have been flooding to London in recent years.

Source: Jing Daily / TopTier

Major duty-free stores yet to be affected by dwindling Chinese tourists over THAAD deployment

Young Chinese shoppers - China Elite FocusSouth Korea’s major duty-free shops have been operating in the black in recent months despite the number of Chinese tourists declining over the country’s plans to deploy an advanced US missile defense system, industry sources said Monday.

Chinese travel agencies in recent weeks spent sales of tour packages to South Korea as part of the Beijing government’s retaliation against Seoul’s decision in July to have the Terminal High Altitude Area Defense system deployed on South Korean soil later this year. South Korea says the missile system will not target China but only counter threats from North Korea.

HDC Shilla Duty Free said it posted a surplus of 125 million won ($107,982) on 53.2 billion won in sales in January.

It is the first time the joint venture between Hotel Shilla Co. and Hyundai Development Co. recorded a monthly surplus since its opening in December 2015.

HDC Shilla also had 1 billion won in operating profit on 67 billion won in sales in February.

The company suffered 20.9 billion won in operating deficit on 397.5 billion won in sales last year.

Shinsegae DF said its Myeongdong branch in downtown Seoul recorded an operating profit of 1.2 billion won on sales of 75 billion won in January in the first operating profit since last May when the Myeongdong branch opened.

Hanwha Galleria, an affiliate of Hanwha Group, and Doota Duty Free Shop, run by Doosan Group, said they have been improving in recent months with their daily sales surpassing 1 billion won each.

Hanwha Galleria logged an operating loss of 43.8 billion won and Doosan a loss of 30 billion won last year.

The duty-free industry, however, may face tough business conditions in the coming months when the country is expected to receive fewer Chinese tourists in the aftermath of the Chinese government’s retaliation.

“The current geopolitical climate between Korea and China is certainly an issue for Korea’s duty free and retail industry.” declared Pierre Gervois, CEO of China Elite Focus, and Publisher of the STC magazine, a travel magazine in Chinese language.

Chinese clients account for about 80 percent of the sales for South Korea’s duty-free shops, according to industry data.

“We are trying to come up with measures for stainable management of the business while refraining from excessive and cutthroat competition to achieve sales and profits at the same time,” a HDC Shilla official said. (Source: Yonhap)