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Ralph Lauren Corp
For the past decade, Michael Gould says he’s watched with envy as a “stupefying” number of Chinese tourists lined up outside the doors of high-end boutiques in Paris, Rome, and other European cities. “We find it frustrating to see business going elsewhere,” says the chief executive officer of Bloomingdale’s. Luring more foreign shoppers to New York is more complicated than just spiffing up store windows, though. Post-Sept. 11 security policies mean some wealthy foreign shoppers have to wait months for travel visas to the U.S.
So last May, Gould and his counterparts at Macy’s (M) and Saks (SKS) began lobbying the federal government to make it easier for tourists to enter the U.S. from China and Brazil; retailers say shoppers from both countries have become big spenders when they visit, and demand for visas among Chinese and Brazilians has increased. The average Chinese tourist spends $6,000 while in the U.S., according to the Commerce Dept. In January, President Barack Obama gave the State Dept. 60 days to come up with a way to decrease the time that Chinese and Brazilian tourists have to wait for a visa from four months to three weeks. “We have the kind of brands that are highly respected by these visitors,” says Gould, “and the faster they can get here the better.”
About 40 percent of foreign travelers to the U.S. need a visa to pass through customs. Before Sept. 11, applicants filled out paperwork and waited about three weeks for an answer. Afterward the federal government also began requiring travelers to submit to an interview with a State Dept. employee and to answer questions such as, Have you booked your tickets? and, How much will you spend in the U.S.?
Despite the long wait for travel papers, the sagging dollar had would-be tourists from China and Brazil lining up at American embassies last year, with officials issuing 34 percent more visas to Chinese and 42 percent more to Brazilians than in 2010. “This is a winning situation for retailers because a key reason overseas visitors want to come is to shop,” says David French, chief lobbyist for the Washington-based National Retail Federation. The group’s president, Matthew Shay, visited U.S. officials at the embassy in Beijing last year to ask for help in speeding up the process.
America’s share of global tourism dropped 30 percent from 2000 to 2010, in part because of the “more stringent security requirements imposed after 2001,” according to the Obama administration’s executive order calling for consular officials to interview 80 percent of the visa applicants from China and Brazil within three weeks of receiving their paperwork. The President also ordered State to issue 40 percent more visas for Chinese and Brazilian tourists in 2012. “The more folks who visit America, the more Americans we get back to work,” Obama said.
The State Dept. says it’s launching a pilot program to cut down on interviews of “low-risk” tourists, such as those who received visas in the past, a change that Peter Boogaard, spokesman for the Homeland Security Dept., says “does not diminish the security of the United States.”
With roughly 1.4 million Chinese and more than 1 million Brazilians expected to come to the U.S. this year under the new program, Bloomingdale’s is prepping for the influx by hiring more multilingual sales staff, planning overseas ad campaigns, and increasing orders of iconic American brands with prominently placed logos—think Ralph Lauren (RL) —that store managers say foreign tourists like to show off back at home. Says Gould: “We’re expecting an enormous uptick in growth.”
The bottom line: The Obama Administration is shortening the wait times for Chinese and Brazilian tourists from four months to three weeks.