How Chinese tourists are impacting the travel industry
With over 135 million international departures in 2016, the Chinese travel market is the most powerful single source of change in the tourism industry. Chinese travelers typically spend double the international average—totaling $261 billion in 2016 and expected to reach $429 billion in 2020—so their impact on local economies around the world can be huge.
Although only about 6% of Chinese own a passport, the numbers of international tourists is expected to increase as middle-class income rises, households spend more, travel restrictions are eased and the desire for experiencing different cultures and activities is on the up. While organized tours are still common with the first-time traveler, Chinese tourists are becoming more sophisticated and increasingly traveling independently. Further, young millennials and more experienced travelers are looking to personalize their travel experience with local cuisine and new experiences.
The most visited destinations by the Chinese in 2017 were Hong Kong and Macau, followed by Thailand and Japan. However, safety remains the most important factor influencing destination choices, and events such as the terrorist attacks in Europe and political instability on the Korean Peninsula greatly impacted travel decisions. While visitors to Singapore, Indonesia, Malaysia, the Philippines and Australia have all grown in popularity over the past four years, the majority of Chinese are not satisfied with the service received when they travel, especially outside East and Southeast Asia such as in Europe or North America, where they tend to treat Chinese tourists as a homogenous mass.
While more Chinese are traveling and demanding more services, the global travel industry faces the challenge of making Chinese guests feel welcome and comfortable. Many countries are making it easier for Chinese tourists to obtain visas, or have waived them altogether. In destinations with economic crisis such as Vanuatu, Zimbabwe and Brazil, the Chinese spend much more than other tourists in the local economy so these countries are investing in the tourism industry and adapting to the specific needs of the Chinese.
Thailand—a favorite among Chinese tourists with 8.7 million visiting last year—is trying to encourage visitors to the country in an orderly and sustainable manner. They recently banned the budget zero-dollar package tours by Chinese companies that were of no benefit to either tourists or Thai businesses. The country has also discouraged big tour groups that take tourists to the same spots and treat them badly. With the help of the Chinese embassy, they designed signboards with dos and don’ts, and encouraged locals to better accommodate and communicate with the visitors.
As Chinese travelers become more sophisticated, shopping continues to be a less important tourism driver than in the past. Yuan depreciation and stricter customs checks are among factors weighing on overseas shopping, with many international goods now available on the mainland due to the rise of cross-border ecommerce. Gaming, cosmetics, luxury and online sectors are expected to benefit most from the influx of Chinese tourists.
Because of their sheer volume and homogenous shopping habits, Chinese tourists’ demand can influence the domestic market of certain items they like, and help make the travel industry more sustainable due to their distinct travel patterns and tastes. In addition, the Chinese tend to travel when Europe is not on holiday, often visiting unconventional destinations, thus helping to fight seasonality by creating activity when employment in the industry is low.
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Main image by Wikimedia Commons