Vietnam is in, France is so not, as 200 million Chinese tourists prepare to hit the road by 2020

Hong Kong, Thailand, South Korea and Japan were their favourite from 2013 to 2017, while France lost out to Vietnam due to safety concerns.

PUBLISHED : Thursday, 20 July, 2017, 8:03pm
UPDATED : Thursday, 20 July, 2017, 11:28pm

Chinese tourists are expected to make 200 million outbound trips in 2020, a 48 per cent increase from last year’s 135 million, led by Hong Kong, Thailand, South Korea and Japan as the most-visited destinations, according to a Thursday report by CLSA.

Vietnam is poised to become more popular than its former colonial master France, after a series of terror attacks last year in Europe deterred Chinese travellers.

The cosmetics, gaming, luxury and online sectors are likely to be the biggest winners, with spending expected to grow 64 per cent to US$429 billion in 2021 from last year’s level.

“While 2016 was challenging, impacted by terrorist attacks in Europe and weaker spending in the US, the tide turned in the third quarter, we believe largely driven by wealthy Chinese consumers,” CLSA analysts Oliver Matthew and Jon Oh wrote in a report, their fifth tracking China’s outbound tourism trends since 2005. “Other driving factors affecting Chinese tourist numbers included being given extra holidays, eased travel restrictions, and greater desire for experiencing different cultures and activities.”

Top destinations stand to gain from the spending power by Chinese tourists. Hong Kong was still the number one destination for mainland Chinese tourists between 2013 and 2017, followed by Thailand, South Korea, Macau and Japan. The CLSA study polled more than 400 experienced international Chinese travellers across 25 cities with an average age of 35 years and earning monthly income of 20,000 yuan (US$2,900).

“After two years of decline in total mainland visitor arrivals, Hong Kong is experiencing a rebound, helped by a new rail link and more appealing events-based tourism,” the report said.

The city may receive 66 million visitors in 2020, up from last year’s 57 million, with each visitor spending an estimated US$1,900 in total on each trip, CLSA said.

Safety remains a serious consideration for mainland travellers, with 70 per cent of respondents citing safety as their prime consideration, followed by cost and sightseeing opportunities.

That’s helped Vietnam overtake France last year as the 10th-most visited destination for the Chinese. A policy by the Chinese government, which allowed foreign tourists to use the country’s third-largest land port on the border with Vietnam to enter Southeast Asia, has also increased tourism, with 4.66 million crossing the China-Vietnam border in the first half, up nearly 42 per cent from last year, Xinhua News Agency said separately.

Political tensions have also come into play, with a marked decline by mainland visitors to South Korea and Taiwan, for instance.

Over the past three years, 32 per cent of respondents spent more than 6,000 yuan per trip on shopping abroad, 3 percentage points below 2015 and a dramatic 10 percentage points down on 2014.

The drop was partly due to the weaker yuan, which weakened 7 per cent against the US dollar last year, but also because of tightened scrutiny on luggage at Chinese customs, the report said.

“Yuan depreciation and stricter customs checks are among the factors weighing on overseas shopping – but as Chinese travellers become more sophisticated, shopping continues to be less important a tourism driver than in the past,” said the report.

Some participants also commented that shopping for others while on holiday has lost a lot of its appeal, with many international goods now readily available on the mainland.

Sectorially, gaming, cosmetics, luxury and online sectors are expected to benefit most from Chinese tourism, with luxury sales particularly estimated to reach 35 per cent of global sales by 2020.

Online travel companies that help Chinese tourists book their hotel, rent cars or arrange other services are going to be biggest winners, it added, as 80 per cent of overseas Chinese travellers now make their bookings online.