Rigid british visa rules prompt chinese tourists to choose paris over london

Twenty years ago Arabs were famous for spending lavishly in Britain. For example, Dodi Fayed, who was best known internationally as the boyfriend of Diana, Princess of Wales, and the son of the billionaire Mohamed Fayed, bought Britain's famous luxury department store Harrods.

Over the past decade Russian billionaires became the new darlings of the British merchants. Today the Chinese super-rich are surpassing the Arabs and competing with the Russians. Chinese people have become Britain's biggest foreign consumer source.

To make money from these new Chinese customers, the department store chain Selfridges even recruited Mandarin-speaking staff members.

For this year's London Fashion Week last month the British fashion industry hoped the British government would loosen its visa restrictions on Chinese tourists, so as to attract more Chinese customers and to help fill the pockets of the British merchants.

Harold Tillman, chairman of the British Fashion Council, said in an interview with the newspaper The Independent that Chinese tourists would save the retail sector if the government could give them the nod.

Tillman said that the profits of British fashion boutiques would increase by several billion pounds if the restriction on Chinese tourists was loosened. Even from a personal perspective, Tillman also strongly welcomes the Chinese people, because he is also director of the fashion brand Jaeger and Aquascutum. The two brands have been listed as must-buy items on many Chinese tourists' shopping lists.

However, Tillman did not specify to what extent he thought the visa restrictions should be loosened for the Chinese tourists.

In 2010 about 140,000 Chinese traveled to Britain, an increase of nearly 10 percent over the previous year. VisitBritain, the tourism authority, estimated that the number could more than double by 2020. According to its figures, in 2010 Chinese tourists in Britain spent about 1,700 pounds (2,040 euros) on average, more than three times the average spending of all overseas visitors.

The total amount of spending of Chinese tourists is also huge. It surged from 150 million pounds in 2006 to 249 million pounds in 2010. The total amount of duty-free goods Chinese tourists bought in Britain rose 64 percent last year.

Figures from Global Refund, a tax refund company that aims to help foreign tourists claim back the value added tax they pay, show that sales to Chinese tourists in upmarket Bond Street in the West End of London has been growing at an average of 164 percent a year. At the same time, Russian consumption in Britain fell 27 percent.

There is no doubt that Chinese consumers stand to promote economic growth in Britain. However, since the country is not a signatory to the 26-country Schengen Agreement, those wanting to enter Britain as tourists need to apply for a separate visa. That means many Chinese tourists who visit the continent give Britain a miss, and the number of Chinese tourists who go to Paris is five times the number who go to London.

According to British Fashion Council figures, the industry brings in more than 21 billion pounds ($33 billion, 25 billion euros) a year. In comparison, the contributions of the chemical and the automobile industries are put at 10 billion pounds each.

After Tillman became the chairman of the British Fashion Council in 2008, he began to implement his plan to improve the global reputation of British fashion designs. He also planned to transform London into one of the world's top fashion capitals that could have the same reputation as Paris, Milan and New York.

In addition to compiling a report on the economic value of the British fashion industry, the fashion council began to organize young British fashion designers to showcase their talents in Paris, New York, Los Angeles and even in China. At the same time, they have tried to attract US customers, who usually have strong purchasing power.

It would be tragic for the British Fashion Council if billions of pounds of potential revenue were lost to the industry because of the visa restrictions on Chinese tourists.

Perhaps the Chinese are victims of a stereotype, one that portrays London as a dark and foggy city as portrayed in Charles Dickens's Oliver Twist. Films such as Waterloo Bridge and The 39 Steps have added to that stereotype top hats, umbrellas and walking sticks.

The British tourism authority came up with a campaign to change Chinese people's perceptions, encouraging Europe-bound tourists not always to think about Paris, Rome and Prague, but to think more about London, Oxford and Edinburgh.

But there is more to this than just mental images.

For a start, the cost of a British tourist visa for those on the mainland is 800 yuan, compared with the cost of a tourist visa for France of 60 euros (500 yuan) that allows the holder to cross into other the countries in the Schengen Area.

In addition, applicants for the British visa are required to lodge their application in person at one of 12 offices, and this can involve considerable travel. True, those applying for a Schengen visa can face the same logistical difficulties, but having to apply for two visas at two different points must act as some kind of deterrent.

British tourism officials have called on the government to introduce an add-on Schengen Area visa that would ease the passage of those wanting to enter Britain.

It is also worth mentioning that the British film and television industry has played a powerful role to promote British tourism to the world, thanks to productions such as Harry Potter, The Da Vinci Code, Gosford Park, and Pride and Prejudice.

In the 1995 adaptation of the TV miniseries Pride and Prejudice, the scene of Mr Darcy jumping into a pond was shot at Lyme Park in Cheshire. After the series became a hit, the number of tourists visiting Cheshire is said to have risen by 150 percent.

If the British government can effectively combine fashion goods with Britain's tourism charm, the attraction to Chinese tourists will be very appealing, especially with the pound in the doldrums and the yuan on a high.

It ought not to be forgotten either that this year Britain holds a trump card: the Olympics in London.

The author is a London-based Chinese economist, PE/VC investment professional. The views do not necessarily reflect those of China Daily.