For destinations, it can be challenging to justify why it’s worth investing millions of dollars in marketing and building a brand in China. More than anything, it’s difficult to find useful key performance indicators that can measure fortune and misfortune to a sufficient extent.
While it’s clear that China is a tourism market worth putting resources into, a more pressing question is perhaps how much should be invested—and how. Of course, throwing money at a marketing challenge is far from sufficient, especially in a remarkably complex (and different) market like the Chinese tourism market.
For Brand USA, fortunately, its investments in the Chinese tourism market appears to have paid for themselves many times over with increased visitation and visitor spending, this according to an Oxford Economics report commissioned by Brand USA.
The report, which provides a detailed analysis of Brand USA marketing in the year ended September 30, 2017, surveyed all markets where Brand USA was active in 2017. Among these markets, China ranked the third best in terms of return on investment, only trailing Brazil and Korea.
On average, each dollar Brand USA spent on marketing generated $27.70 of visitor spending, totaling an impressive $3.9 billion visitor spending generated by Brand USA’s international marketing efforts.
In China, things looked even better for Brand USA in 2017. In total, Brand USA spent $16.5 million on marketing in China, which in turn generated over 1.1 million incremental visits and around $767 million in incremental visitor spending. In other words, every $144.18 spent on marketing in China generated an additional Chinese tourist arrival in the United States, and every dollar spent on marketing in China generated $46.40 in additional visitor spending.
The long and short of it is, of course, that Brand USA believes its marketing efforts pay for themselves many times over—with marketing in China being even more “profitable” than in the average market.
Overall, China ranked as Brand USA’s second-largest target for investments in marketing, with the United Kingdom being the market where Brand USA employed the most resources (and to the lowest ROI).
While Brand USA and Oxford Economics provide a strong case as to why Brand USA is making a difference—and a substantial contribution to the U.S. economy—with every budget dollar it’s assigned, the organization’s future is still in jeopardy. When the U.S. Senate passed a tax bill in December last year, “it opened the door to the automatic implementation of previous legislation that, in effect, would require the de-funding of Brand USA,” according to The Inbound Report.
If Brand USA and Oxford Economics’s findings are to be believed, assigning a generous budget to Brand USA—particularly for markets like China—is sure to have a substantial return on investment, both in terms of visitation, visitor spending, and the number of U.S. jobs created as a result.
If that’s enough to convince Washington to keep Brand USA around remains to be seen.