China's neighbors stand to benefit most from hundreds of millions of Chinese tourists. But as the past few months have shown, Chinese demand can shift rapidly and drastically impact local tourism economies in the process.
The Asia-Pacific region claims 90 percent of the world’s international arrivals — many of them from China — and while some Asian cities are reaping the benefits from increased Chinese tourism others are experiencing setbacks so far this year.
Bangkok remains the most visited city in the region by international travelers with more than 19.3 million such arrivals in 2016, according to MasterCard’s latest Asia-Pacific destinations index for 2017 that’s based on MasterCard and national tourism board data for various countries.
Bangkok, ranked number one for overnight arrivals, is also number one for total overnight visits by international tourists.
China is Bangkok’s largest international market, accounting for 35.1 percent of the city’s international arrivals last year, and has had a seven-year 38.7 percent compound annual growth rate in Bangkok. “Asia-Pacific is the epicenter of tourism,” said Catharina Eklof, senior vice president of retail & commerce for Mastercard. “It’s a region that gets its growth from the region such as from China and not necessarily from the Europeans, for example.”
China is Asia-Pacific’s — and the world’s — largest origin country for outbound tourists and contributed 55 million overnight international arrivals to the region in 2016, a 16.2 percent share of all tourists to 171 destinations part of the index. It also contributed the highest number of total nights (302.8 million nights or 17.1 percent of the total) and expenditure ($43.4 billion or 17.7 percent of the total) to Asia-Pacific.
China’s Influence on Asia-Pacific Tourism
In 2016, Asia Pacific’s second most important origin for tourists, South Korea, contributed 35.7 million overnight international arrivals, a 10.5 percent share all tourists to the 171 destinations. Tourists in South Korea stayed 153.1 million nights (8.7 percent of the total) and spent $21.4 billion (8.8 percent of the total) to Asia-Pacific.
South Korea, however, has fallen out of favor with many Chinese tourists this year after South Korea deployed a U.S. missile defense system. After the missile defense system was deployed in the first quarter, Chinese flight bookings for South Korea fell 10 percent year-over-year for the first quarter and are down 28 percent for the second quarter, tourism data company ForwardKeys found.
Capacity from China is moving away from South Korea into other areas of Asia-Pacific, acording to Laurens van den Oever, CMO of ForwardKeys. “Chinese travelers have the ability to make or break destinations on the spot,” he said during the World Travel & Tourism Council Global Summit in Bangkok on April 26.
Cambodia’s Chinese arrivals, for example, are up 87.6 percent in the second quarter based on bookings for later this year.
South Korea isn’t the only Asia-Pacific country experiencing a lull from China. Chinese arrivals in Thailand were down 4.1 percent in the first quarter and are down 7.5 percent for the second quarter which is directly linked to Thailand’s zero dollar tour crackdown, van den Oever said.
Here are five charts that highlight the growth of tourism across Asia-Pacific from China and other markets in 2016.
Chart 1: Some 10 cities — Seoul, Tokyo, Osaka, Chiba, Hokkaido, Bali, Pattaya, Mumbai, Chennai and Sydney — saw more than 10 percent growth in international arrivals from 2015 to 2016. Mainland Chinese tourists contributed to much of the growth in these destinations, MasterCard found.
Top 20 Asia-Pacific Destinations by International Overnight Arrivals
Chart 2: Australian destinations of Sydney, Brisbane, Melbourne and Perth have high averages for number of nights spent by tourists in those cities that’s in sharp contrast to their smaller arrival and spend totals.
Top 20 Asia-Pacific Destinations by Total Nights Stayed by International Travelers
Chart 3: Of the top 20 Asia-Pacific cities by total expenditure, five of the destinations see tourists spend more than $200 per day on average — Singapore ($254 per day), Beijing ($242 per day), Shanghai ($234 per day), Hong Kong ($211 per day) and Taipei ($208 per day).
Top 20 Asia-Pacific Destinations by Expenditure by International Travelers
Chart 4: The number of outbound Chinese tourists to Asia-Pacific has grown by 25.8 percent per year for the past seven years propelling it from the fifth most important contributor to Asia-Pacific tourists in 2009 (where Japan was first) to the most important by 2016.
Chart 5: The global landscape of overnight international arrivals, even beyond Asia-Pacific, has shifted dramatically during the past decade. The rankings for the U.S., UK and Japan, for example, have fallen during the past decade while Taiwan, Malaysia and Thailand have improved.
Source: MasterCard and national tourism boards
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Photo credit: Asia-Pacific benefits most from Chinese tourism. Pictured are Chinese tourists waiting to board a sightseeing boat at a pier at Chao Phraya River in Bangkok, Thailand. Athit Perawongmetha / Reuters