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Italian and Chinese law enforcement officers pose with Chinese tourists in Milan, Italy. Chinese police were assigned to Italy in May in a two-week experiment to help make Chinese tourists feel safe. Photo: EPA

China’s outbound tourism slows amid weak yuan, European terrorist attacks


The weaker yuan has slowed growth in China’s outbound tourism, said analysts, with the yuan down more than 7 per cent against the US dollar since its one-off devaluation in August last year.

“The devaluation of the Chinese yuan has no doubt increased the cost of outbound tourism,” Sinolink Securities analyst Zhang Bin wrote in a report. “The weaker yuan will dampen the enthusiasm for outbound travelling and shopping among Chinese tourists.”

Data from the China National Tourism Administration (CNTA) shows that the growth rate of Chinese outbound visitors is slowing, up only 4.3 per cent year on year to 59 million in the first half of 2016 – the slowest growth in the past six years and the first time it has fallen to single-digit levels in that period.

“The weaker yuan, nevertheless, cannot be seen as the fatal blow to China’s outbound tourism,” Zhang said, adding that recent acts of terrorism in Europe have seriously scared away Chinese tourists.

Take for example Christina Wang, a high-school teacher in Shenzhen. “I don’t care a lot about exchange rates but I take safety as a priority when we make travel plans,” she said.

“I always travelled outside [China] with my children in the summer holiday but this year we just travelled around China because I don’t feel safe to go abroad, especially European countries after a series of terrorist attacks there,” Wang added.

The weaker yuan will dampen the enthusiasm for outbound travelling and shopping among Chinese tourists
Zhang Bin, Sinolink Securities

“A detailed holiday plan is always discussed and made two months in advance, and we won’t change it easily just because of exchange rate fluctuations. But we will definitely change our destination if there is terrorism.”

Chinese arrivals dropped the most in Hong Kong. Mainland visitors to the city declined 4 per cent year on year in June, with an 8 per cent decline in May. For the first half of 2016, the number fell 10.6 per cent to 20.42 million compared with the same period a year earlier.

GF Securities analyst Albert Yip expects Chinese visitor numbers to Hong Kong will rebound because the Japanese yen and South Korean Won continue to rise and European countries are haunted by terrorism

However, Chinese domestic tourism still remains strong as it is not affected by the weakening yuan. The first half of 2016 saw domestic tourist volume increase 10.5 per cent to 2.2 billion travellers.

The revenue per available room (RevPAR) of Shanghai and Beijing hotels continued to show strong momentum in June. Shanghai and Beijing recorded 11.7 per cent and 4.8 per cent growth in 5-star RevPAR respectively due to the increase in occupancy rates.

For the second half of 2016, CNTA expects the growth rate of outbound visitors to drop to 3.9 per cent year on year while domestic visitor numbers will grow 10 per cent for the same period.

This article appeared in the South China Morning Post print edition as: Outbound travel demand wanes amid rate fluctuations