While in China earlier this month, George Osborne, the UK’s Chancellor of the Exchequer, announced a new pilot scheme to simplify the process by which Chinese citizens apply for UK tourist visas.

The current, burdensome requirements for Chinese citizens to apply for a UK visa include supplying biometric information, fees of up to £200 (higher than those required by other EU countries), and two separate forms, including a UK-specific form that requests detailed information on income, expenditure, and attitude to terrorism. 

This is a cumbersome process in comparison to that of many other EU destinations, particularly where countries are part of the Schengen Visa Scheme (encompassing 26  countries).  The Schengen Visa allows a tourist to apply, on one ‘Schengen Form’, for a visa enabling them to travel freely within the Schengen countries for 90 days in a 6 month period.

The new visa pilot scheme will simplify the application process in three key ways:

1)      the visa paperwork will be reduced to the single EU Schengen form;

2)      starting in summer 2014, a new 24-hour “super priority” visa service will be made available; and

3)      the Government may introduce a “VIP mobile visa service”.  This system, already operating in Shanghai and Beijing, supplies special visa teams who will visit applicants to collect completed forms and biometric data as part of an expedited process.

The recent volte-face of the UK government on this issue is a sign not only of China’s increasingly influential place in the world as a center of trade and commerce but also an indication of the importance that British industries –  especially luxury brands – place on the spending power of Chinese tourists visiting the UK. According to the 2013 UN World Tourism Organization report, Chinese travellers spent a record US$ 102 billion on international tourism in 2012, up 37% on 2011. Yet, despite the attractiveness of cities such as London and Manchester as shopping destinations, existing UK visa rules have meant that visitors from China are more likely to invest their money in easier-to-access destinations, such as Milan and Paris.

In September 2013, Willie Walsh, the chief executive of International Airlines Group, stated: “There is a perception in China that the UK doesn’t want to see Chinese tourists and Chinese business and we have got to put a bit of effort into changing that image. …If we are to be attractive to particularly high-end tourists, we’ll have to have more people who can speak Mandarin and make them feel welcome — not just at the airport but at major tourist venues.”

Only 18% of Chinese visitors to Europe come to the UK. The president of China International Travel Service, China’s most prevalent and powerful tour operator, has explained that she brings only a small percentage of tourists to the UK due to the complicated visa entry rules and high expense involved. In contrast, Chinese tourists visiting other European Union countries that are already members of the Schengen border-free travel zone, such as France, do not face these problems. British industry has been vocal in its support for the UK’s visa pilot scheme. According to Mark Henderson, chairman of the London Luxury Quarter:

Chinese tourism is vital to ‘Brand Britain’ across luxury, retail and hospitality sectors and if the visa process were streamlined, could boost the economy annually by 1.2 billion pounds per year. With these high-spending travellers keen to not only come to holiday but also forge long-term relationships through business investments and acquiring property, it is now more important than ever to help make it as easy as possible for Chinese tourists to visit the UK.”

Figures released by the trade body show that Chinese travelers spend on average £1,656 per transaction in London’s Luxury Quarter on goods from art to jewelry and fashion. And, despite the current visa restrictions, in 2012, visitors from China spent £262 million on luxury goods in and around London’s luxury streets, including Bond Street, Savile Row and Jermyn Street – an increase of 31% on 2011.

With the promise of greater investment in these industries under the new visa structure, it is little surprise that luxury brands trading in the UK are keen to show their support. Other organizations, such as the CBI, have also commented that changes to the visa system: “are likely to give a welcome boost to all sectors of UK business in the months ahead.” Some of the West End’s luxury retailers have even advertised incentives to cultivate high-spenders, such as personal tours of their private museums. This is likely to be just one of the many ways that big brands will try to attract a potential new influx of visitors from China looking to spend on high-end items following the relaxing of UK visa application rules.

The UK government is yet to announce the date on which the pilot new scheme will be introduced.  CovBrands will be tracking developments over the coming weeks, so watch this space.