Chinese Tourism Outlook for 2020: Japan to Soar While Hong Kong Slumps

    A new CLSA report predicts that Chinese tourism patterns seen in 2015 are set to continue over the next five years as outbound trips reach 200 million annually.
    Shoppers in Tokyo's Ginza district. (Shutterstock)
    Liz FloraAuthor
      Published   in Finance
    Shoppers in Tokyo's Ginza district that is popular with Chinese visitors. (Shutterstock)
    Shoppers in Tokyo's Ginza district that is popular with Chinese visitors. (Shutterstock)

    As China’s outbound tourism market continues to boom, the world's top destinations will see clear winners and losers in the race to win over Chinese tourists within the next five years, according to a new report.

    CLSA’s recently released “2016 Chinese Tourists: Expanding Cultural Horizons” predicts that Chinese travelers will take 200 million international trips annually by 2020, causing China’s share of total global outbound travelers to rise from its current 10 percent to 14 percent. But as growth slows from 17 percent over the past five years to 9 percent in the next half-decade, some locations are set to benefit much more than others.

    From the results of a survey of 400 respondents, the report concludes that the mainland visitor slump for Hong Kong and Macau will continue in the future, with only a 3 percent annual growth rate over the next five years. In contrast, trips to other locations will see an average growth rate of 16 percent.

    Hong Kong’s mainland visitor numbers declined by 2 percent in the first 11 months of 2015 for a variety of reasons, including a lack of new attractions, an unfavorable currency situation, capacity constraints, anti-mainland sentiment, and reduced tariffs in mainland China. This has dealt a massive blow to Hong Kong’s tourism industry, which relies on the mainland for around 80 percent of its visitors.

    According to the report’s research, the United States, France, the Maldives, and Australia are the top four dream destinations for respondents, respectively. These destinations only come out on top if “money is no object,” however, meaning that more price-conscious middle-class travelers are likely to head to closer destinations. For those who believe “cultural experiences” are a key priority, South Korea, Japan, Thailand, and the United States were top destinations. With both price and desire to visit taken into account, the report singles out Asian destinations Australia, South Korea, Japan, and Thailand as the main beneficiaries of Chinese tourist spending over the next five years.

    Australia, which saw over a million Chinese visitors in the first 11 months of 2015 for a 21.6 percent year-on-year increase, will continue to see growth as more airline seats have become available and visa restrictions have been lifted. In addition, a strong interest in business activities and real estate investment has China’s affluent flocking to the country.

    Japan and South Korea, meanwhile, will continue to see a boom in enthusiastic Chinese tourist-shoppers taking advantage of lower prices of cosmetics and luxury goods, says the report. Japan’s Chinese tourism numbers doubled in the first 11 months of 2015 to 5 million from 2.4 million in 2014, while CLSA expects that they will reach 11.4 million by 2020. Meanwhile, as South Korea recovers from the MERS crisis of last year, the report predicts that Chinese tourist numbers will grow by 28 percent in 2016.

    Thailand, meanwhile, has become especially popular with Chinese tourists seeking out experiential and cultural travel, with 47.7 percent growth over the past five years.

    But the report lists several caveats to these predictions, noting that unexpected incidents could dramatically alter travel patterns. The number of Chinese travelers concerned with safety is on the rise, with 75 percent of survey participants saying it was the number one factor influencing their travel decisions in in 2015, up from 63 percent in 2014 and 41 percent in 2013. This means that another outbreak like MERS or terrorist activity such as the 2015 Bangkok bombing or Paris attacks could divert a significant amount of Chinese visitor traffic from a favored destination to one perceived as safer.

    Meanwhile, financial considerations such as currency fluctuations and income growth could also change Chinese travelers’ minds in the coming years. As worries continue about the state of China’s economy, 60 percent of survey respondents said they would travel abroad less and 68 percent said they would shop less if their family income is lower than expected this year. In addition, 43 percent said they would reduce their number of trips if the yuan depreciates by 10 percent this year, and 35 percent said currency depreciation would impact their shopping abroad.

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