Who Stands to Gain Next from China’s Outbound Tourism Boom? It Could be Africa.

As China’s outbound tourism market continues its explosive growth, leading luxury brands and hospitality players are closely watching the shifting travel patterns of Chinese travelers. Hoping to capitalize for years to come as Chinese tourists fan the globe, brands have already seen shifts as tourist-shoppers have expanded outward from their initial hubs of Hong Kong and South Korea, France, and New York. With countries from India to Ecuador relaxing visa regulations for Chinese visitors, 2016 looks to be a year when a significant number of travelers start exploring new destinations beyond the usual tourist traps.

Despite the steadily growing numbers of Chinese travelers heading to South America—enticed by the elimination of visa fees in Chile, the waiving of visa requirements for Chinese tourists with U.S. or Schengen visas, and easier visas for Brazil and Argentina—the continent that may have the greatest potential in the medium term is Africa.

Already a recipient of billions of dollars in Chinese investment (around $200 billion in 2013), Africa is becoming a highly desirable destination for China’s more adventurous travelers—and major Chinese tourism companies have moved quickly to capitalize. This month, Guangzhou-based China Southern Airlines began a new flight route to Nairobi, in a 20-flight-per-week code share with Kenya Airways. According to China Southern Chairman Si Xianmin, last year around 120,000 air travelers shuttled between Guangzhou and the Kenyan capital, a number that he expects to grow around 15 percent annually. In all, by 2016 Kenya expects Chinese tourist arrivals to reach 100,000.

Si added that he expects his company’s new Kenya route to greatly boost the number of Chinese travelers heading to not only Kenya, but the rest of East Africa. Said Si, “No Chinese airliner has served this market yet.”

Despite positive signs that Kenya will see a sustained increase in Chinese visitors—both for business and pleasure—it’s not all roses in the Africa tourism market. This summer, South Africa has seen Chinese arrivals plummet an estimated 32 percent from last year, spurred by a controversial change to visa regulations. Introduced in June, the regulations require all visa applicants to apply in person and bring an official birth certificate for any children under 18 years old. This change has turned off many potential Chinese visitors to South Africa—who often put the visa application process in the hands of travel agents and tour operators—and has seen the agents themselves dissuade tourists in favor of other countries with more favorable visa policies. According to Charles Preece, of the Federated Hospitality Association of Southern Africa, the new visa regulations have caused Chinese arrivals in South Africa to plummet nearly 40 percent in 2015.

In the wake of these unpopular changes, South Africa has seen flights cancelled, hotel rooms sitting empty, and restaurants and stores lacking in Chinese guests. As we have seen in countries like the UK—where business leaders have aggressively worked to push the government to loosen visa regulations for Chinese visitors—the South African Tourism Services Association is asking the government to reconsider or relax the new policies.

Other destinations in Africa that have seen European and American arrivals plummet in recent years are looking to China to revive their sagging tourism industries. One such country is Egypt, where revenue at major cultural sites has dropped an estimated 95 percent in the wake of the country’s revolution. According to Egyptian tourism figures, the only market that has not decreased is China, with arrivals expected to reach 200,000 this year. In an effort to fuel this China-facing effort, in February the Egyptian Ministry of Tourism announced three new charter flights from Aswan to Shenzhen, Shanghai, and Chengdu. For their part, Egyptian tour guides have been doing their best to learn Mandarin, with the country now counting around 1,000 Chinese-speaking guides.

Another country shunned by many Western tourists—Zimbabwe—is also trumpeting tourism growth from the China market. Rising from an admittedly tiny base, Zimbabwe saw a 62 percent growth in Chinese tourist arrivals in the first quarter of 2015 (reaching 1,952, up from 1,202 year-over-year). This growth comes despite a relatively troublesome visa policy, which the Zimbabwe Tourism Authority (ZTA) hopes the government will scrap in favor of a visa-upon-entry policy. Currently, China is the second-largest country of origin for tourist arrivals in Zimbabwe, with around 13,000 visiting the country last year, trailing Japan’s 18,443. Over the past year, Zimbabwe’s tourism industry has been hard-hit by fears of the Ebola virus, with travelers from key Asian countries like India, Japan, and South Korea largely staying away, contributing to a 19 percent drop in arrivals from Asia in the first quarter of 2015.

Ethiopia—which counts on China as its biggest investment and trading partner—is also making an effort to boost its appeal to Chinese tourists, rather than just businesspeople. Currently, Ethiopian Airlines has 28 flights per week traveling from Beijing, Shanghai, Guangzhou, and Hong Kong to Ethiopia. According to China sales and services director Konjit Tedla, aircraft flying between Greater China and Ethiopia are “around 80 percent full,” and around 400,000 Chinese passengers travel to the country each year. To assist Chinese customers, Ethiopia Airlines has a Chinese-language customer service center, Chinese website, and dedicated help desk in Addis Ababa. As Tedla told China Daily, China is the biggest market for the airline, which plans to add future routes to Chongqing or Chengdu.

Despite the bullishness, African countries still have a long way to go if they’re to compete with developed tourism markets like Europe, North America, and Southeast Asia—where the vast majority of Chinese tourists continue to go. In these markets, strong tourist infrastructure and a well-oiled system run by Chinese tour operators and guides makes travel easier and more accessible. In the near term, mass-market Chinese travelers are unlikely to head to Africa in droves, with the majority of passengers headed to the continent doing so for business. However, the potential—and the demand—is clearly there for countries willing to do the leg-work and ink partnerships with Chinese airlines and tour operators.


Avery Booker is a partner at China Luxury Advisors.

 

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Industry Sectors, Travel