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Intent on cracking Hawaii’s largest potential tourism market, the state will spend about $450,000 to have a presence at the 2010 Shanghai World Expo in June. What’s the payoff for the state? Lots of Chinese tourists — some day.

It’s easy to understand Hawaii’s interest in the Middle Kingdom.

With 1.3 billion people, China is the world’s largest country. Its outbound travel market is rapidly becoming one of the largest, too, with a of 100 million travelers by 2020.

Helped by robust economic growth, Chinese tourists also than most others. Hawaii Tourism Authority (HTA) research shows per-person-per-day spending by Chinese visitors in Hawaii in 2009 was $312, compared with $264 for Japanese visitors, historically the biggest spenders in the islands.

In Shanghai, meanwhile, an estimated 70 million people are expected to pass through the expo, which opened May 1 and runs until Oct. 31. Hawaii will be the featured attraction at the U.S. Pavilion June 6-12, with Tuesday, June 8 — “Hawaii Day” — marked by a series of state-coordinated events.

If only a sliver of those millions of Chinese are inspired to travel to Hawaii, where 6.7 million visitors vacationed in 2009, the payoff could be handsome, local tourism officials believe.

To that end, Gov. Linda Lingle will lead a 32-member delegation that includes House Speaker Calvin Say, Senate Ways and Means Committee Chairwoman Donna Mercado Kim, HTA President and CEO Mike McCartney, and visitor industry executives and staff.

But is it worth the cost?

Only 45,000 Chinese visited Hawaii in 2009, about 7,000 less than came in 2008 and about 11,000 less than came in 2007. The 2009 numbers were particularly modest given that in 2008 the U.S. and China approved a memorandum of understanding on group travel.

Sure, a global recession has dampened global travel the past few years. But visitors from South Korea to Hawaii grew 44 percent in 2009 to 55,000, while Japan — the state’s third-largest visitor market after the U.S. West and U.S. East — sent 1.1 million visitors to the islands

Judging from the HTA’s own marketing budget, the best place to find tourists isn’t in China. In fiscal year 2010, the HTA is paying marketing contractors only $1.5 million to advertise in China, South Korean, Taiwan and the Philippines.

That’s iso peanuts compared to the $7.3 million the HTA dropped on driving Japanese visitors to the islands and the $22.3 million it threw at North America. The bulk of a special $10.1 million marketing “opportunity fund” has been used to target the mainland, specifically West Coast cities.

Visa, Flight Hurdles Remain

There are more challenges to opening up China. The visa waiver process is sluggish, there is no direct flight between China and Hawaii, and the Hawaii visitor industry is far better equipped to welcome Japanese tourists than those who speak Mandarin or Cantonese. Parts of Waikiki even resemble Little Tokyo.

But tourism officials defend investing in the China market, saying it is similar to the Japanese market of the 1970s. According to HTA research, of the 54,234 Chinese who came to Hawaii in 2008, most traveled as part of a group tour, came for pleasure, were first-timers, stayed on Oahu and booked hotels.

“The most important thing that Hawaii should do is develop new markets, and because we have become so reliant on just one geographical segment for visitors — North America — we need to develop new resources,” said Marsha Wienert, the state’s tourism liaison. “The Shanghai Expo, which is basically the world’s fair, is an opportunity to be a part of the festivities to support what the U.S. is doing with the pavilion there, and to highlight Hawaii in a way we have not been able to do before that reaches over 70 million people.”

Wienert said the state continues to work with Hainan Airlines to implement thrice-weekly service between Beijing and Honolulu. The Chinese carrier has already obtained FAA approval for the route but has delayed several times starting the service.

“The bottom line is we need to increase the demand for Hawaii in the China market in order for Hainan to be able to justify the financial risk in bringing direct service,” she said.

Korean Air has recently added Hawaii flights, and some Chinese choose to fly from Inchon. In Japan, Haneda International outside Tokyo will add international flights beginning in October, including on U.S. carriers such as Hawaiian Airlines.

As for the China-U.S. travel MOU, Wienert said during the first quarter of 2010 Chinese travel to Hawaii was up 23.4 percent compared with the previous quarter.

What about visa problems?

“The U.S. grants about 80 percent of Chinese visas,” said Jeff Lau, a Honolulu attorney and incoming president of the Chinese Chamber of Commerce of Hawaii. “In Europe Chinese don’t even need a visa, so they’d rather go there instead of face humiliation with our system.”

But Lau says Hawaii has made progress on the visa issue, noting that Gov. Lingle has developed a strong relationship with her Chinese counterparts and U.S.Ambassador Jon Hunstman, the former Republican governor of Utah.

Jumbo Aloha Shirts From Hilo Hattie

Hawaii’s presence at the U.S. Pavilion will be on a large viewing screen broadcasting Hawaii imagery and information with related digital links to official Hawaii websites. During the Hawaii week in early June, pavilion staff will be outfitted in “jumbo” aloha shirts donated by Hilo Hattie. Hawaii musicians will perform on multiple stages. 

Marriott Hawaii will host a reception June 7 for tourism industry officials, which will be attended by Lingle. Media and industry functions will be held on June 8 along with a parade.

The HTA is picking up the tab for the Shanghai trip, including paying for two security guards to accompany the governor. The total cost of the trip is $448,000, with $44,700 covering travel and “performance-related services,” according to the HTA. On May 14, the HTA board approved an additional $15,000 should officials need it.

The contingent represents HTA staff who will work all expo events showcasing Hawaii, as well as Hawaii government and tourism officials who will be meeting with Chinese government and tourism officials. The HTA contingent also includes 19 local entertainers and four HTA board members, including chairman Kelvin Bloom and vice chairwoman Sharon Weiner.

Four other HTA board members will pay their own air and hotel expenses.

The China trip has its critics.

Thomas Steimnetz, president of the Hawaii Tourism Association and publisher of the eTurboNews online travel newsletter, agrees that it is important for the state to seek new markets.

“However, you are looking at missing out on more pressing events, like the ITB trade show, and the Indian market,” said Steinmetz. “A $450,000 investment might be way overdoing it and seems more political than anything else.”

The International Tourism Bourse (ITB), the world’s largest travel-trade show, is held every March in Berlin.

The HTA is standing by its fast boat to China.

“I don’t think any one can question China’s potential so our time and efforts in this market are definitely warranted,” David Uchiyama, the HTA’s vice president for brand management, said in an email to Civil Beat. “To keep in perspective, if we look at China as well as Korea relative to the initial phase we went through in developing the Japanese market, this is the beginning, bringing also opportunity in the meetings, convention and incentive markets as well, diversification of our market source is need to bring more stability tour industry.”

The Chinese Chamber’s Lau agrees, but adds a personal observation.

“I spent 40 days in China last year and the U.S. just doesn’t get it,” he said. “We are clueless to how fast China is moving, and they look to us as a role model. But we treat them like Third World peasants.”

His family has been in the U.S. for several generations, Lau said, “But when I visited our family homes that had not been visited in 50 years, they had all our pictures, they knew who we were, and yet we knew nothing about our cousins. It was totally shocking.”

Lau concluded: “The potential for Hawaii in China is tremendous. We are underutilizing these opportunities.”