The Chinese will still keep traveling and they probably aren't panicking about travel as much as U.S. and European destinations are, although it seems like there's some justification to their worrying.
Some 80% of Chinese citizens aren’t worrying about how the recent stock market crash in their country will affect international travel plans because they’ll never have enough money to leave their country anyways.
That’s the sentiment of the Germany-based China Outbound Tourism Research Institute (COTRI), which also contends that the remaining 20% (make that 280 million people) in China who can afford to travel internationally likely aren’t too concerned either.
But booking data say otherwise, at least as far as Europe and the U.S. and Latin American destinations are concerned.
Outbound Chinese bookings data from travel data company ForwardKeys show bookings are up only 1% year-over-year since the Shanghai Stock Market crash in June compared to bookings made between March and June that were up 21% year-over-year. As this chart shows, bookings for Asia, Africa, and the Middle East still do well through the end of this year while Europe and the Americas bookings are down, some sharply.
Although as the chart shows, bookings for the Americas and Europe aren’t generally part of the lion’s share in China. Outbound travel from China is by and large concentrated in Asia let alone China itself.
“When we talk about Chinese outbound travelers, we’re talking about 5% of the society because 95% of Chinese citizens don’t have a passport,” said Wolfgang Arlt, COTRI’s director. “The number of people who have a driving license in China is now about 220 million and this is how traveling starts in China- with nearby destinations. If you want to travel to Hong Kong or Macau of course you don’t need a passport and this is half of the market. Meaning maybe 50% of Chinese citizens can afford to travel to these two places.”
“The top 5% of Chinese travelers who are going to the U.S. or Europe or the Maldives—these are rich people in China. Only 5% of people in China are considered luxury travelers, but when you say 5% in a country the size of China, that’s equivalent to the population of Germany. The people who burnt their fingers are the people not as well-off financially who were pushed by the media frenzy to buy stocks without understanding what was really going on.”
Euromonitor International’s Fangting Sun also found that the China National Tourism Administration estimates outbound travel in 2014 from China achieved 107 million persons, up 19.49% year-over-year and is expected to register smaller growth for full-year 2015–around 16%.
“Not traveling really isn’t an option in China if you want your peers to respect you and if you want to be taken seriously,” said Arlt.
“Right now, of course many Chinese people are probably carefully considering their travel plans if they lost money in the stock market crash, but the question really isn’t ‘will I travel for holiday this year,’ it’s instead ‘where will we go.’ They will still want to travel somewhere because Chinese people see traveling as an investment and it’s about prestige and respect with them more so than vanity. In India, another country with more than a billion people, a lot of people who have money aren’t interested in international travel, but you don’t have this as much in China.”
The middle class Chinese travelers who will still visit the U.S. this year include parents of the more than 300,000 Chinese students studying at American universities, Arlt added, even when the average Chinese traveler has an annual income equivalent to $9,700.
“From all the research we’ve done so far this year, we’re finding that the average Chinese consumer is still confident that they’ll have more money next year than they’ll have this year and that they’re happy to spend the money they have,” said Arlt.
Some U.S. tourism boards in cities such as Los Angeles, a popular place for Chinese tourists to visit during a U.S. trip, maintain they haven’t felt any aftershocks of recent Chinese economic events, though the full effect likely won’t be felt until next year.
“Based on our market feedback, we are hearing that the slowing Chinese economy and currency devaluation are not causing travelers to change their travel plans, thus we do not expect a significant impact on tourism in the Los Angeles area,” said Kathy Smits, a spokesperson for the Los Angeles Tourism & Convention Board.
Top 20 China Outbound Tourism Destinations in 2014
Top 10 China Outbound Tourism Destinations in Q1 2015
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Photo credit: Chinese outbound bookings for the rest of 2015 are significantly down year-over-year for Europe and the Americas. Pictured is a Chinese family vacationing in Malaysia in November 2013. Shankar S / flickr