Chinese tourists spend Golden Week close to home

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As China’s tourists prepare for next week’s ‘Golden Week’ vacation, the hottest destinations are no longer Paris, New York or Tokyo but the beaches of Sanya and the peaks of Yunnan at home.

Chinese travelers are increasingly opting for ‘staycations,’ which are a boon for domestic tourism operators, but a challenge for retailers and hotel chains tapping into Chinese demand abroad, as they are standing to lose a percentage of the 261 billion US dollars that Chinese tourists spent abroad last year.

In the first half of this year, the country’s tourists made 2.54 billion trips in China, up 13.5 percent from 2016, far outstripping the outbound market, which has slowed as consumers tighten their belts amid recent economic slowdowns.

“This Golden Week, we prefer to travel domestically,” said Tian Haiqin, a 50-year-old Beijing housewife who said cost, jet lag and language barriers were the main reasons for staying at home. “It’s quite expensive to travel abroad, not only to far Western countries, but also around Asia.”

Tian said she plans to spend around 20,000 yuan (3,000 dollars) a week for her and her son to stay at a resort in the eastern city of Hangzhou, known for its scenic lakes and surrounding hills.

Photo via sina.com

She’s not alone: Around 710 million Chinese will make trips in the country for the National Day holiday, according to estimates from travel agent Ctrip International. Some 6 million will travel abroad.

The holiday break - one of the world’s biggest mass movements of people - gives a snapshot of China’s big-spending tourists, who can make, or break, the fortunes of hotel chains, duty-free stores, cruise firms and brands.

Tong Yiling, Asia analyst at BMI Research, said the domestic tourism sector had seen a “rapid improvement” in competitiveness, with improved transport links and big investment in tourist sites. Better marketing about local travel destinations and the impact of tighter capital controls to deter Chinese from taking money abroad were also having an effect.

Many are looking to cash in on the domestic trend.

Walt Disney Co’s Shanghai park saw over 10 million visitors in its first year, while Fosun International’s Club Med has opened hotels in Guilin, the island getaway Sanya and skiing resorts in the northeast.

Security worries

Some overseas destinations have taken a hit over security concerns, industry insiders said. Attacks in Europe, instability on the Korean Peninsula and political uncertainty in the United States have affected tourist demand.

Chinese tourists. /Xinhua Photo

“I think one of the most important reasons why people like to travel within the country is because of lots of unexpected incidents, such as terrorist attacks in recent years,” said an official surnamed Zhou at travel company Leyou. “People feel it could be very dangerous to travel overseas.”

Visitor numbers to South Korea, normally a popular destination for Chinese, dropped more than 60 percent in August against 2016 due to a political row between Beijing and Seoul over South Korea’s installation of a missile defense system.

Certainly, China’s outbound tourism spending is still growing. A report from CLSA in July estimated Chinese tourists would spend 429 billion dollars overseas by 2021.

But growth is slowing down. Outbound travel was up just over 5 percent last year, down from close to 30 percent growth in 2010, according to BMI Research.

Beijing has helped, opening duty-free zones around the country and cracking down on dishonest local tour operators. A boom in local “adventure” tours has also helped lure younger millennial tourists to domestic travel.

Tourists sunbathe on a beach. /AFP Photo

“Compared with outbound travel, domestic travel has been greater in size and growth rate for the first several months of this year,” Ctrip, China’s largest online travel agent, said in written comments to Reuters.

Outbound tourism, meanwhile, is in a “new normal of steady, slow-to-moderate growth”, with tighter shopping budgets “curbing” the rise in spending overseas, it said.

Even last year, luxury brands LVMH and Burberry flagged lower Chinese tourist spending overseas.

BMI’s Tong pointed to several areas of China’s tourism market that should grow fastest in the next few years: historic sites, theme parks and countryside farmhouse getaways, which the government is promoting to boost rural incomes.

Many Chinese, though, still look to escape the holiday rush that can see huge crowds at train stations and tourism hotspots.

Yu Yongyi, 22, has booked a trip to Vietnam, to add to holidays he has made to Spain, Thailand, Sri Lanka and Malaysia.

“Most of the time I’ll go abroad for holidays because the price of flights is getting lower,” said Yu, head of marketing for start-up Eniutrip. “So it’s often cheaper to go abroad than to stay at home.”

Source(s): Reuters