Spending by Chinese tourists soared by 53% in 2016 to record $215 billion, and cities around the world are competing to gain a foothold in this fast growing market. But how do you attract Chinese visitors to your Museum?
In this presentation from MuseumNext Australia, Dr Lynda Kelly and Deana Varga share the story of how the Australian National Maritime Museum secured 4,000 Chinese visitors from a corporate incentive program, the changes that the museum made to prepare for their Chinese visitors and how they realised the potential to both generate revenue and deliver a great experience.
Deana Varga: So we are going to chop and change between speakers so that’s why we are both on the stage. I would like to first acknowledge the traditional owners of the land and forgive me I am going to say the [unintelligible 00:00:14], I hope I have pronounced that correctly, both their Elders past and present. So, why is the Australian National Maritime Museum talking to you about China and ‘China Ready’?
Well, firstly for those who don’t know, we’re a maritime museum located in Darling Harbour in Sydney and we’re a federal government, cultural institution and the only cultural institution located outside Canberra. I have a background in tourism and business events but have been at the museum for 3 years. So we’ve had a strategy to target international visitors of which China is one of those categories. Part of the risk for us was not only the risk of moving forward with this strategy, but the risk of not doing anything. Part of that, and I’ll talk about that in a moment, but part of that was the circumstances into which we were heading.
So we have had a 3 years national strategy to grow international tourism. We’ve moved from 19% three years ago to over 30% now. Of this our Chinese visitation has moved from number 4 position on our international rankings to just nipping at the heels of the UK which is number 1. The growth for us, in particular with the Chinese, Korean and Japanese markets has outstripped the growth to Australia and Sydney for those three markets. So although you might think they’re coming anyway to Australia and Linda will talk about the data behind that in a moment, we’ve really had to work hard to try and get them to the Museum.
Part of our success is that we have secured two major incentive groups and I will talk about what incentives are, but that was Amway China in January this year, 4000 delegates and NI SKIN Greater China in April last year, also 4000 delegates. But, we are still in the early stages of where we are going, so what we want to do today is share with you our journey and where we are in that journey. We certainly are not experts but we are learning a lot along the way and hopefully you can walk away with some steps so that you can see what the risks are, what the risks are of not doing something and also some really small options depending on what your budgets are.
In terms of numbers we are talking about so year to date, we have 9000 Chinese visitors coming to the museum. Last year we had 9000 in total for the full year and the year before it was 6000. One of the things in terms of moving forward that’s really, really important is having senior management and director support. Kevin [unintelligible 00:02:53] our director really supported this strategy as well as our senior executives and, Linda and I, when we worked at the Maritime Museum, well, when she worked at the Maritime Museum, I am still there we had different reporting lines, we were in different departments and in particular our NU SKIN Greater China was one of the first big incentives that we looked after. And we had a Classic Wooden Boat Festival over that time and Linda was managing that and so the risk for us was the NU SKIN China delegates having a good time and a good experience but making sure our core visitors and our core mission at that time 16000 people, 16000 people coming to the festival, were also having a good time and that the two visitors were co-located effectively.
Before I go on, I am going to hand over to Linda who is going to talk a bit more about the market segments and the growth influx from China.
Lynda Kelly : Thanks Deana. I have to say, having NU SKIN and the Classic Wooden Boat Festival did wonders for our KPI so it was really good but it also meant that we had two different audiences together and it was actually good for each to see the other for the Chinese visitors it was seeing the Museum pumping and for the regular audience, it was actually seeing that we are a tourism attraction and we’re something for everyone.
I am just going to talk a little bit about facts and figures. Those of you that know me know that I love a good statistic and most of these are taken from a really good website called the China Skinny if you’re interested in that. They are a marketing company but they do write a very good blog and they do have a lot of trends on there. I’ll tweet out some of the information after this presentation and also I don’t know about Melbourne … but Victoria I know that Destination New South Wales and Business Events do a lot of research in this area as do Tourism Australia so there is a lot of information in the Australian market on tourism trends.
Just before I go into those statistics in tourism, it’s really about looking at China as an entity in and of itself. It is quite an amazing economy as we all know but a couple of things that were really sticking out to me was the way the Chinese consume content and the way the purchase and consume goods is totally different to a lot of the ways that we do it. They are the largest consumers of digital content, they’re on line and in mobiles. If you are not in the mobile space with this audience then you’re not getting cut through on anything and that’s whether you are a brand, a product or a museum or a country even.
One of the interesting things that’s happening is that it is the Chinese millennials that are driving this growth. I was at the visitor research forum the other day and there was a talk about the Great Ocean Rail and the Chinese Tourism to there and what came out from there is, it’s a bit of a myth that it is the older Chinese that are coming, it’s not, it is the millennials. The thing about the millennials in China is that they are in huge debt. They spending, spending, spending but their debit is, the average Chinese millennial has a debt 18.5 times their income. Do they worry about this? No, because of China’s 1 child policy, they’re actually in line to inherit lots of property, money, whatever, so they’re planning for their future already and they’re going to be a very wealthy upper class of Chinese coming soon. So, many of these millennials are the sole heirs to their parents and grandparents freehold properties and these are worth millions and they’re like to … if they can find one, marry an only child as well, so you have this coming together of great wealth there. As I said there is a lot more information on the Chinese Skinny under consumer driven China.
Did I change this? Is it that one? Okay.
So, what works for the Chinese consumer? Very similar to other consumers, emarketing is everything but video, they are using video a lot more and I heard a stat the other day about how much video is used in the online space, but it’s really about moving image. This market also has a lot more access to flights from cities outside of Shanghai and Beijing so people are travelling, they getting exposed to international things they are very much aware of foreign lifestyles, products and trends and they want that.
ReChat I could give a whole presentation on ReChat, if you’re not on ReChat or you don’t know about ReChat, get on there, find out about it because that is the way you need to market to this audience. Again I can send you some good research on ReChat.
Looking then at Chinese tourism trends for Australia, as Deanna said Chinese tourism is a very big market for Australia, particularly Sydney and we were talking with Melbourne museum colleagues and that’s something they’re looking at very carefully. We know that most do visit Sydney and Melbourne and then they go to the Gold Coast and far north, Queensland. Great opportunities for museums up in there, and that guy from Gympie, the Bone Museum, do something, that would be good.
They are visiting Australia mainly because of safety and security. They perceive that we have world class nature, food tourism is very important but also 48% of Chinese visitors surveyed said they were very interested in or are attending a museum or heritage site so there is a lot of potential there for us. What we have said here is that being ‘China Ready’ really is a no-brainer because they want to come and get a good cultural experience as well.
I know that we have an international audience here so it is not just China Ready for Australia. About five times more Chinese people visited New York last year than in 2009 for example. For the Met China, for the first time in their lives became a segment and really interesting is that the Mandarin version of the Met’s guidebook which collection sells better than any other books in other foreign languages. So, people are visiting and purchasing and consuming. The Getty also they’re their maps in simplified Chinese, audio guides in Mandarin and café menu with special dishes for Chinese visitors and this here is from the Getty just last month with Chinese New Year and their … you can see it. I just lost my train of thought there.
Also wanted to mention that the DCMS in the UK just put out a report recently about decreases in visits to museums in the UK but still reported at 47 or 48% international visitation so maybe if your locals are decreasing, you might well want to look into investing in a tourism strategy.
I am now going to hand it back to Deanna who is going to start talking about what we actually did at the Maritime.
Deana Varga: Thanks Lynda. I just want you to focus on that figure underneath that image, 20 million outbound Chinese travellers currently. We get 1.2, we’ve just pipped the 1.2 million mark in Australia and I know there are a few new Zealanders here, your visitors numbers rank somewhere between the 3 – 400 000 mark so they are travelling and they are going to grow. As long as we have the airline capacity, they are going to grow.
Why the Maritime Museum? I said that we had a risk that if we didn’t do anything we had a situation that was that Darling Harbour was going under construction and Aussies don’t like to go to construction sites so we also had a risk that, because the Convention Centre was being redeveloped, which is now open, we also had our own construction on site. We were building a new attraction called Action Stations and so we had construction around and amongst us so we really needed to focus on mitigating risk of losing audience numbers in our local market and the international market will travel and they are coming to Darling Harbour. We knew they were coming to Darling Harbour, they were going to all the attractions around us, but not coming through our doors. So the risk of not doing anything meant we were going to potentially lose growth. One of the first things we did was to engage an agency to help us decide did we have something worthwhile selling, which markets should we sell to and how do we work on product development? What are the things that are going to be attractive for us?
I mentioned we had a 3 year strategy, part of that strategy was selling the aspects of the Museum that we know. Our outdoor experiences. They were the things the Chinese in particular and our international visitors really liked. One of the things I forgot to mention was we had this brand image, not the brand image of people don’t know about us as a Maritime Museum and what we do, but a brand image with our name. Why would people go to a Maritime Museum? It’s boring, maritime doesn’t translate well into Chinese, why would they go and this was from Australians and international inbound agents. So we really had to overcome that hurdle and we did that by getting a lot of people on site and showing them the experiences.
As a result of that and unintended consequence was we have a fantastic waterfront café, we thought there is no way that the inbound market would be interested in our café. Well, okay, but if you don’t know, we’re right near Chinatown. In Chinatown you can buy a very cheap meal and you can get in and out very fast. It is a different experience to our waterfront café which is exceptional, if you haven’t been there, please do come. I look after the restaurant if you hadn’t figured that out. But the feedback from the agents was we really want that restaurant experience. So we then had to work with our caterer, we outsource our catering, had to be price relative, groups of 10-20 people at a time, a very easy process to book. So we really had some new opportunities which we hadn’t factored in.
In the first 9 months of making the café open we had 1200 people through the café. The risk management for us then was making sure that our leisure visitors were having a good experience while we had groups who are generally noisy, speaking in different languages and want big tables booked. So we were still working out the processes there but, essentially, in our downtime through our café we’ve picked up our volume and we’re just managing yield at the moment because it is a cheaper price point.
So, one of the things is which market do you target? There are actually 3 types of visitors in tourism. Leisure who are those people who you would probably be targeting via normal marketing channels. So, the leisure visitor would be influenced by things like TripAdvisor, By Your Concierge. One of the things you can do if you do nothing else is have Union Pay. Hands up those who know Union Pay? Effectively it’s like a credit card, operates like a credit card, just means the Chinese and more than just the Chinese, it’s used around Asia, have access to their funds and it says “We are China Friendly” – that’s how the Chinese read it. Even if you did nothing else but put some signs up that you accept Union Pay, that’s a good step. The second thing is the leisure visitors generally wont book before they leave home so you’re really at the mercy of whenever they turn up. They can come with a voucher, than can pre-book but it is not the norm.
The second market is the Groups Market. The trend is actually that the groups market is decreasing. Obviously they come in a group, as it sounds, and they will generally pre-book prior to arrival. One of the challenges for us is we generally don’t have time [tickets] and don’t have a product that needs to be booked in advance so we really had to overcome the hurdle of again “why come to a maritime museum”? What did we sell? We sold our outdoor experiences as it’s something you couldn’t do elsewhere in the world. The reason we started on this journey was for the incentive market. We are a member of our Convention Bureau. Most cities have a Convention Bureau and a Convention Bureau wins incentive business well in advance. Incentive business is generally very large groups, they’re being rewarded for something and they come to a city in high waves. I talked about Amway, 4000 delegates, NU SKIN, 4000 delegates, so they come in big waves. Your Convention Bureau, not always but can be the catalyst for helping you win that business. We are going to go through a couple of case studies and I’ll hand over to Linda to talk about our education case study first.
Lynda Kelly: Right, did I flick too far? Ha, thanks. I am no good at this, very confusing.
Okay, so there are two things I want to briefly mention. The first was we commissioned some Chinese tertiary students to do some research into Chinese tertiary students because there is a big catchment of them in Sydney and also New South Wales, there is a huge amount of Chinese international tertiary students or CITS as they are called living and studying in Sydney and they are in our catchment area, but they weren’t coming to the Museum. They’re young and we don’t get that many young adults anyway, but we’ve actually got something to offer them. So, we did the body of research and I blogged that whole research and I’ll send that link out as well. What was really interesting in that study was that the only thing they really wanted was cheap tickets and a date night kind of thing. So Valentine’s day was important, Chinese New Year is very important and also Chinese New Year this year fell the day after Australia day I think, so the students were telling us they would really love to come and do something with Australia day and with Chinese new Year and also use the Museum as a date area because it’s a really nice, safe place to go. The main point here is that they are interested in visiting museums but pricing is really very important to these tertiary students.
The second one I wanted to mention was education groups. I know Deanna said that groups are generally decreasing but there is a market out there for schools that want to come to Australia and want to do a high quality product. The thing that really angered me was when our agent came to us and said “look, there are the kinds of experiences that are being given to Chinese, Japanese and |Korean students in other places” and, to be honest, they were just being ripped off. They were bused somewhere, given a pretty shabby set of documentation with someone who doesn’t really know what they’re doing and then they are bused back and charged a lot of money for that. So, I wanted an ESL programme, a high quality ESL programme at the museum. We had some really good teacher guides that are ESL trained so I saw this as an opportunity to provide a high quality product but the outcome of that is, and let’s be frank and you’ve probably heard it from Deanna, the Museum needs money and the ESL education programme needs money as well, we need to generate revenue. So, what I’ve learnt from offering that programme is that you can offer a really high quality programme, it doesn’t cost a huge amount once it is set up and people will buy it and they’ll appreciate it and come back.
What we wanted to do was give them a deeper learning experience and this deeper experience not based on the traditional clichés and, I’ve stolen your thunder here, a bit of ‘koalas and kangaroos’ because we are finding that is not what they want to come for. Particularly, students want to come not just for an indigenous experience but a whole maritime experience. They’re interested in cork, they’re interested in immigration and they are also interested in Chinese immigration and settlement in Australia, all the things that the Maritime Museum is very well placed to do. I mention this because this is something that pretty much every museum can do because you have educators probably, probably have access to ESL teachers you could bring in and actually run some really good programmes because not only will they pay, but they do appreciate getting a deeper learning experience.
I am going to flick back to you for a time. Here you go.
Lynda Kelly: With NU SKIN, I am going to show you a couple of photos so you get a feel of what NU SKIN was like as an incentive group and also show you a video. Some of the reasons and some of the risks associated with NU SKIN we took a financial hit on the admission of this incentive. It took us 3 years to win this incentive, the reason being there is a distribution chain within the tourism centre. So we actually had to try and convince a couple of different key stakeholders in that distribution chain that we could manage this group because a museum like us hadn’t hosted an incentive of this size before. We have the capacity to take a larger volume of people than 4000 across 5 days and secondly, would the delegates enjoy the experience? That was the other critical part of the question. There were lots of risks involved in this. For us, the risk was the financial compensation.
Again, the director really supported us in being flexible with price and because I have a tourism background, I was able to talk about possibly not getting money on admission revenue but we would make that money on retail, food and beverage. So we took a hit on admissions for this one to get it over the line because that’s what the agent puts their hand in the pocket for but the delegates are the one who spend in the store. We ended up making quite a good sum of money around NU SKIN even though we didn’t on admission. But, the agent who looked after NU SKIN Greater China also looked after Amway China so, as a result we secured Amway China again, I mentioned, 4000 delegates and we didn’t take a financial hit on admissions. You do have to bring your admission price down but we had a different price structure.
Just at the bottom there are three bullet points as to why we won NU SKIN. They key things were, I mentioned Action Stations which was our new attraction, it had Chinese interpretation throughout. It didn’t have Chinese interpretation in the film which we then changed ready for Amway China. The second reason was we were offering a truly unique experience and Linda mentioned no koalas, no kangaroos. This sense of something they hadn’t experienced before and the third reason was branding.
I am going to show you some branding. So, the sign they’re showing there, after Australia, the next incentive was going to Hawaii and that was a big destroyer so, on that sign read something along the lines of see you in Hawaii and there’s a reference to the Hawaiian destroyer. If you look under the National Maritime Museum there is blue and white signage there. It was critical both for this incentive and Amway that we have our branding throughout the Museum. The marketers in the room may be cringing going “that’s not on brand” but again, that is a risk you have to come up with what’s right for your museum and how do you find that right fit? We are working through that right fit and this is during Classic Wooden Boat Festival. You can see the NU SKIN China delegates, they’re highly visible so it was about creating a nice experience for both visitors and everyone did love it.
This is Amway Hong Kong, not actually Amway China, but again the branding was really critical.
I am going to show you a video of NU SKIN Greater china.
Male Voice 1: “We had over a million Chinese visitors come to Australia last year alone. Very importantly for the Museum and maritime stories, the stories we want to share with our Chinese tourists.
Male Voice 2: We have a lot of collateral in Mandarin so inside a lot of the Action Stations we have a lot of the signage in Mandarin, we give all the guests Mandarin information”.
Deana Varga: That just gives you a taste. So, in summary go into the Chinese market or the international tourism market wasn’t risky, it really is rewarding for all. The learning for us that we are still unpacking are about how we train and educate our staff and volunteers. We have 470 volunteers on site, now we have a very good pool of 20 volunteers who speak not only Mandarin but are multi-lingual and we are recruiting those all the time. We proactively recruit Mandarin and Cantonese speakers and we also worked very closely with our onsite suppliers. Our admission staff are outsourced, our catering staff are outsourced as I mentioned, so we have KPIs for those two providers in particular to bring multi-lingual staff onsite particularly focusing on Mandarin and Cantonese.
Also, one of the learnings was our staff really loved this experience and so we recognise that we need to do continual cultural awareness training across the Museum and again, if you’re going to go down this path really taking on board that there needs to be one owner that looks after this market segment, but it is across the whole museum.
In terms of what do you do next, there are some really good examples. We’re not the only ones travelling down this path. Linda mentioned your destination marketing organisation, they really have tool kits available online which are good ways to help you. In May this year the Australian tourism exchange, Tourism Australia’s largest trade show for attracting international visitors.Get on board with some of these trade shows and activities and just get an understanding of what the market potential is. Tourism Australia, Destination New South Wales, I’ve forgotten the Victorian but Queensland Tourism will all be willing to help. Examples if you want to look, Sovereign Hill is amazing, what they are doing particularly in the Chinese market, they have over 100,000 Chinese visitors each year and Port Alfred in Tasmania has done some really good work and I have seen Pure New Zealand is doing some programmes to try and encourage tourism onsite. When I was in Auckland recently I didn’t see too much but again I am not the target market for Chinese.
That concludes the end of our presentation. We’re happy to share a lot of our information and links as Linda mentioned and take any questions.
Deana Varga: A very good question. We have one fulltime staff member who is about 80% tourism and 20% marketing. It is one of our learnings that it really needs to be shared between … so for example managing an incentive like that is a mix between operations front of house. The strategy is really between me, her and our marketing team. Because it’s a new area, we’re really very [light] on.
Lynda Kelly: But I guess that goes to show that we can actually, we don’t need a huge resource to do it.
Question: Hi, I was just wondering, you’ve obviously done a lot of research into China, are you sending any products abroad?
Deana Varga: The question was are we sending products abroad? Do you mean exhibitions going abroad? I will be in China in April and we’ve just built Pirates, some of you may have seen Ian [unintelligible 00:28:20] talk about Pirates yesterday. We’re looking at selling some of our IP around those exhibitions, not necessarily selling the exhibitions because we’re still debating how and where we do that. The short answer is we’ve done some initial thoughts around it, we haven’t sold or taken anything over yet.
Deana Varga: Yes, so we’re members of our Convention Bureau so they proactively win the business so the key for the incentives is the business has to be won for the city first. Often Melbourne is competing against … well, Sydney might be competing again Singapore for example or Qatar to win the incentive business. Once it’s won it is then handed to an agent. We work with the Convention Bureau and the agent and it helps us determine, for example Amway China was in January which is a peak month for us. We really didn’t want it originally. Well, we would never say no to it so we are going to try and work it out so it works to our benefit.
The answer is yes, because you can yield well on those incentive groups. The average dwell time at the museum is 3 – 4 hours, the average dwell time of an incentive is 1 – 1½ hours so you really have a short period of time. So, NU SKIN, why do we want to keep focusing on them, for example during that 3-4 hours the average spend in our store us $2.50 to $3.00, the incentive groups spent $4.00 per person and they were in the store and we had pop up stores, but they were in the store for 15 minutes, maybe 30 minutes of that total period.
Question: Lynda, you mentioned how important it was to have quality [unintelligible 00:30:37 – 40] give an idea of what that actually would look like? What was a quality experience, what do they, I mean apart from using their own speakers or …
Lynda Kelly: It is mostly to do with content and pedagogy so it’s about providing a good learning experience that the students are interested in and engage with. They do want a teacher guide or an educator with them so that is a cost and they also want a workbook, something to take away and they are on digital and that just kills me but they do want a good book with sets of materials, good images that they can then take back to country. Not only for the learning and education side but to show their parents and their families because that is really important for them.
David, the reason I want to talk about the ESL stuff is because it’s you can repurpose a lot of it, like the general tour. I know the stuff you’ve got at the Natural Museum could be re-purposed quite easily and we’ve done it in 3 languages Chinese, Korean and Japanese so that we can adapt it to each different group and they have very easy needs. They want to know about indigenous, know about Captain Cook, they want to know about immigration and they want to see some really cool vessels. We’re very lucky that we have the outdoor experience as Deanna said, it is a real selling point for us. We can talk about it a little later if you want.
Deana Varga: I might just comment about the group, sorry if you don’t mind. The Japanese groups are actually growing. The education groups are a really big market and the education groups, some of you who are old enough would remember when everyone spoke Japanese as opposed to Mandarin. The Japanese interest is really growing in Australia overall and with more flight capacity which is coming to multiple cities around Australia, the Japanese market is one to watch as well.
Well, if there are no more questions, we will wrap up.
Dr Lynda Kelly and Deana Varga share the story of how the Australian National Maritime Museum attracted Chinese visitors to their museum at MuseumNext Australia.