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Number of Chinese tourists travelling abroad set to hit 200m in 2020: report

The Nation A CLSA Securities report remains bullish on Chinese tourism, maintaining its forecast of 200 million visitors by 2020.

The new report “2017 Global Tourism: Making waves in Asia”, explored the key growth drivers in Chinese outbound travel destinations, a theme that CLSA, Asia’s capital markets and investment group, has tracked since 2005.
While 2016 was challenging, impacted by terrorist attacks in Europe and weaker spending in the US, the tide turned in the third quarter of 2016, largely driven by the wealth effect among Chinese consumers, the report said. Other driving factors affecting Chinese international tourist ambitions include extra holidays, easing travel restrictions and greater desire for experiencing different cultures and activities.
CLSA’s proprietary survey of more than 400 Chinese travellers reveals that the top two most visited destinations were Hong Kong and Macau, followed by Thailand and Japan. Chinese tourist arrivals to South Korea and Taiwan slowed due to political tensions, while Singapore, Indonesia, Malaysia, the Philippines and Australia have seen growth in popularity over the past three years.
In September 2016, the Thai government cracked down on zero-dollar tour group operators from China; Thailand has seen a drastic slowdown in year-on-year growth in Chinese tourist arrivals – from 70 per cent in 2015 to 11 per cent in 2016. Over January-May 2017, growth in such arrivals dropped 5.6 per cent YoY. Fortunately for Thailand, the country is seeing an increase in tourists from other destinations, which more than offsets the drop in Chinese tourists.
CLSA’s survey sees Japan, Thailand and the United States voted as top leisure destinations in the coming three years. In 2017, Australia ranks fourth most desirable destination; a significant rise from the 2015 Chinese traveller ‘wish list’, where Australia ranked 10th. CLSA’s proprietary survey also reveals that if money were no issue, the two most desired destinations for Chinese tourists are the US followed by France.
Chinese international tourism spending has more than tripled since the US$73 billion (Bt2.5 trillion) recorded in 2011, reaching $261 billion in 2016. CLSA anticipates Chinese tourist spending overseas will reach $429 billion in 2021. 
Yuan depreciation and stricter customs checks are among factors weighing on overseas shopping, but as Chinese travellers become more sophisticated, shopping continues to be a less important tourism driver than in the past. Some survey participants commented that shopping for others while on holiday has lost its appeal, with many international goods now available on the mainland due to the rise of cross-border e-commerce.
While Chinese tourists express a stronger desire for new experiences, safety remains a key concern. CLSA’s 2017 survey findings indicate that 70 per cent of respondents claim safety as the most important factor influencing destination choices, followed by travel costs and sightseeing. Events such as the terrorist attacks in Europe and political instability on the Korean Peninsula greatly impacted travel decisions, with Korea especially suffering the loss in visitor numbers to other regional destinations such as Vietnam.
CLSA expects gaming, cosmetics, luxury and online sectors to benefit most from the multi-decade Chinese tourism theme. Luxury sales to Chinese tourists are estimated to reach 35 per cent of global sales by 2020. CLSA’s longtime view that online travel remains a direct play of the Chinese tourism theme is supported by a very high 80-per-cent share of Chinese outbound travellers making their travel bookings online.
The 235-page report reveals research findings from 409 experienced Chinese outbound travellers across 25 cities, with an average age of 35 years and average monthly income of 20,000 yuan.

Published : July 19, 2017

By : The Nation