Harbin's Tourism/Exhibition Economy Triggering HRI Sector Rise

Harbin（哈尔滨） is an ethic melting pot given its history as home of two Chinese dynasties – Jin（金） (1115-1234) and Qing （清）(1644-1911). Chinese nationalities include Han, Manchu, Korean, Mongolian and six other ethnic minorities. Saint Sophia, a Russian Orthodox Church completed in 1932 is still one of the city's leading landmarks and tourist attractions. As a result of moderate summer and fall temperatures, during China's National Day (Golden) Week, nearly 800,000 tourists visited Harbin. Yet, Harbin is probably best known for its 'Ice and Snow' Festival, first held in 1985, that has evolved into an international event. Large ice sculptures, often 2-3 stories high with colorful electric lights frozen inside the structures has made the annual festival a major international tourist and trade event. The operators of the Yabuli Ski Resort, one of the best winter sports facilities in China, are promoting Harbin as a possible potential site for the 2014 Winter Olympic Games.

As Harbin's traditional heavy industries restructure, tourism has become a key economic driver for Harbin and Heilongjiang（黑龙江）. The City has plans to develop an ecological friendly 'Garden City' given Heilongjiang's status as one of six pilot provinces. And, the annual International China Harbin Trade and Economic Cooperation Fair (Harbin Trade Fair) is second only to the Canton Trade Fair in China. Held each June, the 16th Harbin Fair in 2005 had more than 12,000 trade visitors from over 80 countries. While not specific to the food trade, it's a possible venue for US food trade exporters and commodity organizations wishing to showcase products in Northeast China. Harbin’s privileged status as a regional Chinese-Russian trade hub makes it doubly important to domestic and international traders.

While the city's tourism and exhibition sectors are booming, Harbin continues to suffer from a lack of high-end lodging-accommodations. Currently, only 3 5-star, 9 4-star and 18 3-star hotels are operating with only the Shangri-la, Singapore, and Good Fortune Hotels having International management. However, we understand several overseas operators are seriously looking at the Northeast market, Harbin and Dalian （大连）in particular.

Based on interviews and staff outreach experiences, post has a first-hand appreciation for Harbin's well-deserved reputation as a drinking and meat eating culture. Food consumption patterns there often resemble more those of westerners than countrymen in southern China. Historically the city's restaurants included Russian, Greek, German, French and British cuisine. As incomes and the standard of living continue to rise, Harbiner's are returning to their cosmopolitan roots. A recent survey found 60% of Harbiner's frequent restaurants every week, probably as a result of Northeastern social habits. Harbin's restaurant sector alone accounts for nearly US $500 million with per capita restaurant consumption around US $100 annually in more than 10,000 restaurants. The absolute size of Harbin's high end HRI market (defined as US $8 and above per capita), is about 5% that of Beijing. However, portions sizes are large and about 3,000 restaurants have seating capacity above 1,000.

Chinese and Western Kitchen cuisines are flourishing as increasing numbers of domestic and foreign travelers inject and demand greater diversity into the local food scene. Harbin 'red' sausage originally brought by Russian refugees is a staple of Harbiner's 'hearty'winter diet. Pizza Hut, KFC and McDonald's compose the large legion of 50-80 Western Fast Food (Quick Service) Restaurants that enjoy a brisk business. KFC's estimated Harbin revenues are around US $4 million. The recent opening of a seasonal 'Ice Restaurant' made completely of ice on Sun Island in the middle of the Songhua River, continues to impress locals and tourists a like. The frosty eatery's signature dish is 'Hotpot.' The creativity of Harbin's new cadre of restaurateurs appears to know no bounds. A Chicago-based company the Harbin Business Exchange, recently announced plans to open a chain of Hollywood-themed restaurants across China and starting in Harbin.