China's Golden Week Goes More Global: Tourism Growth Sped up Abroad as Travelers Shunned Crowds

In spite of a Chinese economic slowdown, preliminary data suggests that year-on-year growth of international travel during China’s Golden Week picked up pace, while domestic consumption growth slowed within the margin of error. With China’s ever more important role in the global markets, investors were quick to blame its Golden Week for both a drop in both gold prices and copper prices, as Chinese traders were busy buying retail goods and museum tickets instead of driving demand for commodities on world markets. And even though its markets were closed, the Chinese market was under investors’ scrutiny as they tried to gauge domestic consumption growth from Golden Week shopping and travel behavior. According to official government data from the Ministry of Commerce, retail and catering revenue grew by 10.7 percent during the Golden Week holiday period, a slight drop from the 11 percent growth witnessed during 2015’s Golden Week holiday, as well as the 12.1 percent growth in 2014. Although slowing domestic consumption may disappoint investors, outbound tourism during the Golden Week grew by 12 percent in 2016, up from 10.7 percent growth in 2015, according to predictions made by China’s leading online travel agency, Ctrip. China’s Golden Week, notorious for traffic jams and overcrowding, provides consumers with many good reasons for spending their holidays abroad—not only can they avoid the crowds, but they can have a good time doing it. 2016 proved no different, with infrastructure and domestic tourist attractions strained to their limits. Travel by train reached an all-time high on the last day of the Golden Week, with 12.57 million people hitting the tracks, China Railway reported. Train trips during the holiday period grew by 9.3 percent to a total of 108 million train journeys, and 500 extra trains were in operation to satisfy demand. Highways were no better, and the Beijing Commission of Transport went as far as providing maps highlighting shortcuts to ease congestion and gridlocks that stretched for several miles. Although the communist party is eager to boost consumption by promoting domestic tourism—introducing Golden Week one of the means of doing so—domestic tourist attractions were severely overcrowded during the holiday. Photos of Hangzhou’s famous West Lake turned into a sea of tourists went viral, and Beijing’s Forbidden City sold 166 tickets per minute—running out of the daily quota within a couple of hours. Perhaps it should come as no surprise that state media chose to promote less popular domestic destinations to alleviate overcrowding and maybe help spread the domestic tourism boom to lower-tier cities. For example, both Chinese-language Xinhua and the global edition of China Daily featured the 850,000-person-strong city Dandong right on the North Korean border as a popular tourist destination in their Golden Week reporting. Needless to say, international destinations generated significantly more interest among Chinese consumers. Although we will still have to wait for official Golden Week arrival numbers from around the world, estimates are showing continued growth in spite of a more expensive Japan and less excitement about Hong Kong. However, the quality of tourists has become a much more important concept for tourism stakeholders particularly in destinations only a short-haul flight from China—and capacity shortage associated with the Golden Week makes the issue of quality more important than during other times of the year. In the end, it’s not the number of tourists, but the tourism revenues that matter. A big-spending Chinese family may just be worth as much as a tour bus full of budget-conscious group travelers. What used to be an arrival numbers game has thus become much more of a Chinese tourism revenue game as destinations seek to truly benefit from China’s tourism boom. As Jing Daily previously reported, Singapore’s recent Chinese tourist growth has come with many strings attached that indicate that the growth mostly comes down to a shift toward short-staying, budget-conscious Chinese travelers. With Chinese tourists’ average expenditure on hotels down by 40 percent since 2014, Singapore hoteliers had little to cheer about in anticipation of the Golden Week. If the Singapore Golden Week, a nationwide sale that coincides with China’s Golden Week, reverses the trend remains to be seen. Thailand, on the other hand, has been doing its best to avoid the least profitable Chinese tourists by cracking down on so-called “zero dollar” tours. What may be a well-guided long-term strategy for reorienting itself into a higher-end destination for Chinese tourists is still controversial in Thailand. Estimates put the number of Chinese tourists in Thailand for the Golden Week up by 30 percent to 220,000, but many tourism stakeholders argue that growth would have been much higher without the crackdown. Instead, neighboring Vietnam is welcoming the budget-conscious travelers in Thailand’s place. Meanwhile, Chinese tourists who went to the United Kingdom to enjoy its many shopping options at a post-Brexit discount were met with a pleasant surprise as the pound sterling hit a 31-year low just at the start of the Golden Week. The UK, already destined for a strong Golden Week performance, may have been able to squeeze some additional retail revenue from its Chinese visitors as a result. Chinese tourists visiting several countries in Europe during their Golden Week travels were provided with another good reason to save most of their shopping for the time they spend in the UK—putting the rest of Europe at a disadvantage. The predominantly casino-oriented tourist destination Macau saw its misfortune turn to fortune as it Chinese arrivals saw a year-on-year drop the first three days of the Golden Week, only to bounce back and end up with 7 percent Chinese tourist growth for the full week. The stronger-than-expected performance seems to indicate that Macau’s reorientation toward the mass market and away from high rollers in light of Beijing’s anti-corruption campaign has started to pay dividends. The two new casino resorts opened in the last couple of months may also have helped stir interest among repeat visitors. Political issues also proved to shape tourism flows during the Golden Week, with Taiwan seeing visitor numbers plummet by half after China decided to show its dissatisfaction with its recently elected leader by limiting the number of Chinese tourists allowed to visit Taiwan. South Korea, which recently fueled Beijing’s anger by deciding to deploy the United States’ anti-ballistic missile system, is set for a strong Golden Week performance despite the recent controversy. However, Chinese government media highlighted the case of some 100 Chinese Golden Week travelers being denied entry to South Korea’s Jeju Island due to incomplete paperwork and in result getting stranded in the airport waiting for their return flights—adding more controversy to already strained relations. With persistent growth, and a make-it-or-break-it moment for marketing initiatives targeting Chinese consumers, China’s Golden Week remains a crucial week for Chinese global travel. From the way it looks right now, the UK was the big winner in 2016—with economic turbulence the gift that keeps on giving (Chinese tourists). The next Chinese Golden Week for the Chinese Lunar New Year begins by the end of January next year.

China's Golden Week Goes More Global: Tourism Growth Sped up Abroad as Travelers Shunned Crowds

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Published October 10, 2016

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China's Golden Week Goes More Global: Tourism Growth Sped up Abroad as Travelers Shunned Crowds