Southeast Asia Enters Damage Control Mode To Win Back Chinese Tourists

    From MH370 to anti-China riots, a string of crises in the region means countries are scrambling to regain lost Chinese tourism revenue.
    An image posted on the Weibo account of the Tourism Authority of Thailand to entice Chinese visitors. (Weibo/Tourism Authority of Thailand)
    Liz FloraAuthor
      Published   in Finance

    An image posted on the Weibo account of the Tourism Authority of Thailand to entice Chinese visitors. (Weibo/Tourism Authority of Thailand)

    With riots, a plane crash, a kidnapping, and a military coup, it’s been a rough year for many Southeast Asian countries hoping to cash in on Chinese visitor spending. They’re not giving up so easily, however, with many new initiatives to convince China’s outbound travelers to return.

    Prior to a string of crises across the region this year, Chinese tourists were flocking to Southeast Asia: Thailand’s popularity surged with 68 percent year-on-year growth in the number of visitors from China in 2013 for a total of 4.7 million arrivals—thanks in large part to the surprise blockbuster film Lost in Thailand. Meanwhile, Malaysia saw a 14.9 percent growth rate in the number of Chinese visitors during that time with a total of 1.7 million. As Vietnam rapidly developed its tourism industry with new resorts and casinos, Chinese tourist arrivals grew by 34 percent in the first half of 2014.

    Things started to go downhill for one country after another starting in January of this year, however. Thailand’s political upheavals that started with massive protests and eventually turned into a military coup have caused Chinese visitor numbers to drop by 25 percent year-on-year so far, with a 40 percent slump in Bangkok. In March, Chinese visitor numbers to Malaysia began to decline sharply as a result of massive boycotts over the way Malaysian officials handled the disappearance of Malaysia Airlines Flight MH370. Things didn't get much better when in April, a Chinese tourist was kidnapped at a Malaysian resort, causing Chinese visitor numbers to go down 19 percent.

    In May, massive anti-China riots in Vietnam over a Chinese oil rig in Vietnam-claimed waters resulted in deaths of Chinese workers and the mass evacuation of Chinese tourists. The incident caused a 30 percent drop in total mainland visitors and a 72 percent decrease in the number of tourists from Hong Kong in June compared to the previous month. These crises had a snowball effect on other countries that were often part of multi-destination tours, such as Singapore, which saw a 1.7 percent year-on-year decline in the number of Chinese visitors in the first five months of 2014.

    Despite the grim situations, these destinations aren’t ready to sacrifice lucrative Chinese tourist revenue, since visitors from China are vitally important to their travel industries. Chinese tourists comprise the largest group of arrivals for both Thailand and Vietnam, as well as the third-largest group for Malaysia. In June, Malaysia announced that it would resume its tourism promotions in China despite a previous promise that it would only do so once MH370 was found. After a visit by Malaysia's Prime Minister to China to celebrate the 40th anniversary of diplomatic relations between the two countries, Chinese state media has withheld blame in the case of Malaysia Airlines Flight MH17, which was shot down 12 days ago over a Ukraine conflict zone in an area that other commercial airlines have avoided flying over.

    Meanwhile, Singapore is taking matters into its own hands to bring back the Chinese tourist influx it lost thanks to the Malaysia situation. In June, it launched a SGD$1 million ($799,808) campaign to convince Chinese travelers to skip Malaysia altogether and visit the country as a solo destination.

    An ad for a shopping promotion posted on the Weibo account for Thailand's tourism office. (Weibo/Tourism Authority of Thailand)

    Thailand’s military junta clearly has its sights on tourist numbers as well: this month, it announced that it will waive the 230 yuan (US$37) visa fee for Chinese visitors between the peak travel period dates of August 1 to October 31. The country’s tourism authority has also launched a discount-filled shopping campaign and hosted a “White Honeymoon Beach Party” with an appearance by Chinese Olympic gold medalist Guo Weiyang. It is planning to invite Chinese tourism officials to promotional activities in an attempt to demonstrate that the country is fine for travel.

    Vietnam is joining in the effort as well. Nguyen Manh Cuong, the deputy director of Vietnam's official tourism office, stated that the country will "boost marketing activities to China," to try to show that "Vietnam is a safe destination."

    Not all Southeast Asian countries are feeling the pain of lost Chinese revenue. In fact, some that may have been overlooked in the past are now moving further up Chinese tourists’ wish lists. Sri Lanka has been doing extremely well: in the first half of 2014, it saw a stunning 137 percent increase in the number of Chinese visitors. Many travelers looking for a sun-kissed alternative to Thailand headed to the beaches of Bali, which saw 41 percent year-on-year growth in the number of Chinese arrivals in the first half of 2014. According to a recent report by the Center for Asia Pacific Aviation, Cambodia "has been able to take advantage of the turmoil in Thailand and the sudden unpopularity of Malaysia by successfully marketing itself as an alternative destination to Chinese tourists” with Chinese visitor growth of 18 percent in April.

    Against all odds, beleaguered locales are putting on a show of optimism about prospects for the second half of this year. Malaysia's tourism authority has officially stated that it is hoping for 2 million Chinese tourists, which would mark a 15 percent year-on-year increase, by the end of 2014. Thailand also projects growth in the number of Chinese tourists by the fall. “I think many ambivalent Chinese tourists will decide to go. We expect Thailand tours will reach a peak during the October Golden Week,” one Chinese tour operator told China Daily.

    Vietnam is still ambivalent about the number of Chinese tourists it will be able to attract this year as resort owners fear the possibility of further altercations in the South China Sea. According to one Danang resort owner in a recent New York Times interview, the future of the market is “a little bit difficult to predict” at the moment.

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