Chinese Travelers Are Voting!

You don't think Chinese people are allowed to vote? The vote every day with their money!

In 2018, Chinese tourists took over 149 million overseas trips, spending over $130 billion according to the China Tourism Academy. A mere 15% increase in total trips and 13% jump in spending.

Do we have your attention?

8% does not sound like a very big number. But this is the percentage of Chinese people who presently have international passports. Just imagine the impact Chinese travelers will begin to make around the world when the number of passport holders increases to just 15%.

By 2030, the number of global travelers will exceed 1.8 billion people, according to the United Nations World Tourism Organization. China is the world's fastest growing tourism market and will undoubtedly continue to be in the near future.

We say this with confidence because the Chinese are learning to travel domestically. In the first half of 2019, China's domestic tourism business exceeded $402 billion, a mere 14% increase year-over-year. By the end of 2019, estimated Chinese domestic tourism spending should exceed $900 billion.

Chinese travelers are undoubtedly exploring the world. But at the same time they are carefully choosing what part of the world they want to explore. They keenly recognize that their financial impact as they travel is an important part of China's influence around the world. After all, travel is trade!

A Chinese traveler who spends $25,000 combined between shopping, entertainment, excursions, hotels and transportation - is as valuable an international customer as anyone who buys an automobile outside of its manufactured country. And this type of spending is more profitable and impacts more lives than selling cars.

Where the Chinese traveler spends is chosen carefully and especially these days.

In the past year there has been a slew of sociopolitical issues that questioned China's relationship with various countries around the world. Tourism may be a secondary concern between governments, but it greatly impacts industries and finances around the world.

With the USA experiencing a drop of nearly 6% in Chinese arrivals in 2018 and Hong Kong expecting to lose as many as 400,000 mainland tourists, uncertainty clearly lingers for destinations deemed politically unpopular by Chinese tourists.

In the first half of 2019, Chinese global FIT travel grew nearly 13%. Increasingly, we are seeing millennial's taking short international breaks, basically extended weekend trips throughout Southeast Asia and newer destinations continue to become attractive for the more experienced Chinese long-haul traveler.

However, there are challenges for some more traditional Chinese travel destinations. Recently, the Hawaiian tourism authority announce that Chinese arrivals had dropped 36% compared to a year ago. Government travel warnings and negative media reports are fueling this shift with Chinese tourists finding equally attractive destinations in other corners of the globe. Hawaii is certainly a unique and beautiful destination, but it's not the only destination with beaches and volcanoes.

When surveyed, Chinese travelers continue to rank the USA as one of the top 10 most popular destinations. But with a continued drop in tourist number arrivals and a first-quarter drop of 12% in Chinese spending in New York City, clearly Chinese tourists are making an impact in a new way.

Even though Canada saw a record arrival number for Chinese new year this year, the ongoing diplomatic disputes surrounding Huawei and tightening visa regulations is certainly limiting potential increases in inbound arrivals from China.

So what is it that makes Chinese tourism incredibly sensitive? Frankly, the Chinese are voting with their money. They realize that they are making a local impact when they travel around the world and why should they spend their money in a market that doesn't welcome them, does not seem to be respectful and polite to China, and doesn't effectively reach out to their travel needs and desires. In some ways, the Chinese traveler around the world is becoming a better consumer, choosing where they want go not just because they want to go, because they feel like they're getting the best service, value, welcome, and respect.

While North America may be challenged, Europe is benefiting. In the first four months of 2019, Europe experienced a 17% increase in tourism bookings and some indications from bookings in the early summer, indicate a 40% year-over-year increase in reservations and room nights.

Although traditional Western European destinations remain highly appealing — UK destinations were researched 133% more times by Chinese compared to 2018 — the highest growth is taking place in southern Europe where Chinese are looking for new and exciting destinations. Year-on-year increases of Chinese tourists are as follows: Montenegro 44 percent, Serbia 39 percent, Croatia 53 percent, and Cyprus 125 percent. Admittedly, such growth is launching from a relatively low base, but the increasing ease of accessing these locations coupled with more open visa requirements are aiding in such growth.

Serbia and Montenegro have waived visa requirements for Chinese arrivals and in so doing, has put both countries of the top of the wish list for many Chinese global travelers and shoppers.

For years, New Zealand has been the darling destination for Chinese travelers, looking to explore beautiful nature, stunning scenery, clean blue skies and a welcoming population and travel infrastructure. However, New Zealand’s recent dispute with China regarding 5G network implementation from Huawei and overall trade decreases between the two countries has been reflected in a 21% decrease year-over-year of Chinese arrivals. China recently postponed the New Zealand-China year of tourism and the New Zealand Prime Minister state visit to China was delayed.

Asia continues to be the global training ground for Chinese international travelers and shoppers.

Myanmar is experiencing exponential growth of 140%, along with Japan-12% growth and South Korea with a nearly 30% increase year-over-year. This is an excellent recovery considering they were basically banned from outbound Chinese travel in 2017. Markets can rebound exceptionally fast if they properly engage the Chinese travel consumer.

In most cases, the Chinese government is not directly influencing decision-making on where to travel from China. The days of Chinese government travel bans seems to have dissipated. With Chinese group travel in many cases now being less than 50% of total arrivals, the ability for the government to influence and control the FIT consumer is significantly less than 5 or 10 years ago.

What drives the new Chinese global traveler shopper, is firstly attraction to the destination. But increasingly the Chinese global travel shopper wants to know that where they spend their money is appreciated, respected and welcoming. Destinations that really reach out to Chinese travelers, not in terms of offering slippers and hot-water makers, but rather offering Chinese language staff, food choices, information in Mandarin, going out of the way to appeal to the likes and desires of the global Chinese traveler and shopper - these destinations, hoteliers, attractions and shopping malls will be the go-to places for the next 150 million arrivals.