China enters ‘visa-free era’ with Southeast Asia. Will travel retail boom?

What happened On January 28, Thailand and China agreed to waive visa requirements for each other’s citizens starting on March 1. Under the arrangement, Chinese and Thai passport holders will be able to travel to the other’s country for up to 30 days, replacing the temporary visa scheme that was launched last September. “This visa-free era will bring people-to-people exchanges to a new height,” Chinese Foreign Minister Wang Yi said at a press conference. On January 25, China and Singapore similarly signed a mutual 30-day visa-free entry agreement, set to come into effect on February 9, the day before Chinese New Year. The announcement became a trending topic on Weibo, attracting over 309 million views that day. The Jing Take The news comes as China gears up for its busiest annual period of mass migration: the Spring Festival. While the majority of trips take place within the country — CCTV expects 9 billion domestic trips to be made between January 26 and March 5 — overseas travel is also on the rise. China's aviation authorities have arranged more than 2,500 additional international flights to accommodate the 40-day travel rush, including 600 flights to Thailand and 150 to Singapore. Chinese travelers are seizing the moment. Bookings for Singapore and Thailand during the Spring Festival have surged by more than 13 times compared with 2023, according to the Chinese travel platform Trip.com. Additionally, bookings for Malaysia, which waived visa requirements for Chinese nationals in December, have skyrocketed by more than 22 times. “The world knows that Chinese tourists are the most willing to spend money, and they also have the largest group for rich people in the world,” writes Weibo user Qingchuanfan hua (@晴川繁花). “Of course, it doesn’t cost much to go to Singapore. Ordinary retired Chinese workers can do whatever they want! This wave of dividends is big!” Beyond holiday travel, China’s “visa-free era” is poised to help Southeast nations revitalize their tourism industries, serving as a catalyst for their economies. Both Thailand and Singapore have struggled to recover to pre-pandemic figures: Thailand’s inbound Chinese tourists dropped to 3.5 million last year from 11 million in 2019, while Singapore received just 37 percent of the number of pre-pandemic 2019 visitors from mainland China from January to November 2023. Thailand now expects to attract 8 million tourists from China this year, generating $13 billion (452 billion baht) in tourism revenue. This influx will benefit sectors like hospitality and travel retail. In fact, a study by Euromonitor International predicts that China will make up almost 90 percent of duty-free sales in Asia-Pacific by 2027. This is particularly good news for market leaders like Lagardere Travel Retail, DFS, and Lotte Duty Free, the latter of which celebrated the complete launch of all its 19 stores at Singapore Changi Airport earlier this month. Hindered by limited flight capacity and difficulties in obtaining visas, among other factors, Chinese consumers did not return to global destinations in droves last year as many observers had hoped. However, with one of these problems out of the way, perhaps the Year of the Dragon will bring more auspicious prospects for outbound travel. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

China enters ‘visa-free era’ with Southeast Asia. Will travel retail boom?

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Published January 30, 2024

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China enters ‘visa-free era’ with Southeast Asia. Will travel retail boom?