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Looking to Thailand’s success, other nations in Southeast Asia have geared up efforts to attract more Chinese travelers. It’s a logical move given the market potential of China and its proximity to the region.
Even a small slice of the China market means substantial revenue, made even more significant by lower average incomes in Southeast Asia. Still, these destinations also run the risk of driving away historically significant, and more lucrative per capita, Western tourists.
While Chinese tourists spend less per trip, the number of Chinese arrivals easily dwarfs that of any single Western destination for most Southeast Asian destinations. For destinations willing to allow casinos, Chinese tourists can be especially lucrative.
However, the volume of Chinese tourists necessary to maximize revenue and catering to their market-specific demands has necessitated a substantial reworking of destinations. Much of this has focused on the building of new transportation infrastructure or the expansion of existing infrastructure, often within the framework of the Chinese development initiative, the Belt and Road Initiative (BRI), with funding provided by Chinese actors.
One such recent example is the upgrading of three airports in Myanmar. Union Minister for Planning and Finance was quoted in regards to the BRI-funded projects, “The Chinese want to visit Myanmar but we don’t have good airports to accommodate them. So, we will upgrade them to become international airports so that they are able to receive these tourists.”
Of course, such market reworkings are not limited to banal infrastructure projects. Increasingly, Chinese and Hong Kong developers and other firms have stepped in to construct or expand large tourist facilities and attractions. This has brought with it substantial market turmoil and damaged the livelihoods of many dependent on foreign tourism revenue, all while total revenue continues to rise.
For Cambodia, the epicenter of this issue has been the coastal city of Sihanoukville. The small city of 100,000 now has 30 casinos, up from 15 in 2015, mainly catering to Chinese tourists. Local operators and business owners are already noticing a steady decline in their business, with crowds of Chinese tourists and construction driving away other potential travelers.
Those have suffered the most have been those that catered to beaching Western travelers, attracting these visitors through cheap accommodation, food, and drink. These development projects have substantially raised the cost of real estate and accommodation, making the city substantially less attractive for non-Chinese tourists.
Furthermore, these Chinese tourists have little interest in the kind of tourist experiences that Western travelers sought, putting many of the city’s stakeholders at risk and increasing the likelihood of the development of structural unemployment.
It also opens up the tourism industry to substantial risks in the event of an economic slowdown in China or clashing political goals, giving China substantial leverage in influencing state behavior.
How widespread these issues regarding the takeover of tourism industries by Chinese actors is challenging to gauge, and its arguably impossible to calculate the effective drop in the number of valuable Western tourists in certain destinations and for particular businesses. That’s not to say that some Southeast Asian nations haven’t attempted to curb these problems.
Some destinations, like Vietnam, have ameliorated the cutting out of local stakeholders by banning foreign tour leaders and/or restricting foreign ownership of properties. Measures to cut down on tourism exploitation have met with challenges in Thailand, the poster-boy of a successful Chinese tourism policy.
Cambodia, on the other hand, appears to have made little or no effort to protect livelihoods of its own tourist industry, opting instead to use the opportunity for tourism to facilitate closer ties with China and attract capital investment. Myanmar seems to be pursuing a similar strategy.
As Chinese tourism in the region grows, Southeast Asian countries will continue the tough balancing act of tapping into the booming Chinese tourism market while at the same time avoiding a backlash from both the local population and prospective visitors from other source markets.
This story originally appeared on Jing Travel, a Skift content partner.
Additional links from Jing Travel: