The U.S.-China Tourism Year is Over, But Did It Make a Difference?

A closing ceremony in Washington D.C. on November 20 marked the end of the U.S.-China Tourism Year, an initiative undertaken by both governments to strengthen tourism ties and people-to-people exchanges. Growth in tourist arrivals from both countries was hailed as one of the main results of the so-called tourism year, but did it really make a difference? According to Chinese Vice Premier Wang Yang, the number of Chinese tourists that visited the United States in the first three quarters of 2016 grew by 14.7 percent year-over-year, and he expects the total arrival number to exceed 3 million by the end of the year. However, Wang’s growth rate and projected number of total arrivals would actually mean that 2016 was the worst-performing year, as far as tourism growth is concerned, since the global financial crisis—which caused growth in 2009 to plummet to 6 percent year-over-year. While double-digit growth certainly means good news for the U.S. tourism industry, it still signifies the slowest growth since 2010—when growth stood at 53 percent year-over-year. 2016 continues the downward trend for Chinese tourism growth in the United States. *2016 data covers the first three quarters. (Data from U.S. Department of Commerce) The growth of Chinese tourism to the United States also outpaces overall growth of Chinese outbound tourism, which stood at 1.6 percent in the first half of 2016. Nevertheless, the slowing overall growth of Chinese global travel is mainly a result of declining arrival numbers in key destinations in China’s vicinity, such as Hong Kong, Macau, and Taiwan, with growth outside these destinations still in the double digits. In contrast to Europe, the United States hasn’t suffered any terror attacks or negative headlines in Chinese media about a “migrant crisis” in the recent year, so external shocks can’t be blamed for the slowing growth either. Just like Xi Jinping argued about Chinese GDP growth, the global tourism industry may have to adapt to a “new normal” of Chinese tourism growth. Fortunately, unlike the new normal in Chinese GDP growth, the new normal in Chinese tourism growth remains in the double digits—albeit not booming in the same way it did just a few years ago. There is no data to back up that the U.S.-China Tourism Year helped growth stay stronger than it otherwise would, and the 2016 growth rate is entirely in line with the slowing growth seen in the last few years. The 10-year tourist visa now offered to Chinese tourists is one example of a policy change that industry stakeholders believe will have long-term positive effects on Chinese tourism growth, however, its introduction preceded the tourism year by a whole year. There are reasons to be cynical about tourism years and argue that they’re more of a diplomatic freebie than cause for a substantial shift in policy, but marketing initiatives may have long-term benefits that have yet to become apparent. Brand USA, the destination marketing organization for the United States, launched marketing and sales initiatives in China as a result of the cooperation, as well as industry events in the United States to educate stakeholders about the Chinese tourism market. “The United States only captures 2 percent of the outbound Chinese market despite strong demand from Chinese visitors to our shores,” said U.S. Secretary of Commerce Penny Pritzker during the D.C. closing ceremony—underlining the potential for continued Chinese tourism growth in the United States. However, the upcoming Trump administration and its aggressive rhetoric against China leaves industry stakeholders with questions about the future of Chinese tourism in the United States. The United States received 2.59 million Chinese tourists who spent US$30.1 billion on goods and services in the country in 2015.

The U.S.-China Tourism Year is Over, But Did It Make a Difference?

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Published November 24, 2016

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The U.S.-China Tourism Year is Over, But Did It Make a Difference?