The good news for destinations around the world is that outbound travel from China is still increasing. But there's no room for complacency: Competition for those tourists is widespread, and average spending is down.
Now that we’re three quarters the way through 2018, we finally have some real concrete and official figures for the state of the Chinese outbound travel industry.
A joint report from Ctrip, China’s largest online travel agency (OTA), and the China Tourism Academy (CTA), an official Chinese research institute, have released their findings on the spending and destinations of Chinese tourists. One important piece of new information is on the average spending of Chinese tourists, which once again dropped. Average spending by Chinese tourists per outbound trip fell by 14.2 percent in dollar terms to around $758 (5200 yuan), down from $883 for the whole of 2017.
But, overall, outbound trips are up and 2018 is well on its way to blow past 2017. All in all, 71.31 million outbound trips were made by Chinese tourists in the first half of 2018, up 15 percent from 62.03 million. This fact alone will help keep overall spending by outbound Chinese tourists steady and should serve as a reminder that the fundamentals of Chinese outbound tourism will likely remain strong for the foreseeable future.
What initiatives are working to attract Chinese tourists? The CTA cites marketing pushes by major tourist destinations, visa facilitation, tax-exemption policies which promote shopping and innovative travel products such as island hopping, parent-child tours and customized travel.
A 14.2 percent drop in average spending per trip is no small figure, but this drop is to be expected. More Chinese residents of more modest means are going abroad and act as the main driver of outbound tourism growth from China. More tourists going abroad will mean more spending overall, even it’s less on average per trip. Moreover, the falling yuan has had a dramatic impact on purchasing power, and a big factor in constraining how much Chinese tourists choose to spend on outbound tourism.
In dollar terms, the drop in average spending is quite dramatic. But when comparing average spending in RMB terms, average spending by Chinese tourists stood at around 5,750 yuan per outbound trip in 2017. In yuan terms, outbound spending then decreased by a more modest 9.6 percent. Of course the effective drop in purchasing power by Chinese tourists will also vary by destination. For some destinations, most notably Turkey, Chinese tourists have been able to enjoy a massive increase in purchasing power.
Despite lower spending power, Chinese consumers seem to be maintaining a strong appetite for travel. A 15 percent increase outbound trips is an impressive figure, especially with the yuan losing its value. The destinations that top the list of most visited overseas destinations, aside from Hong Kong and Macau, should come as no surprise, with Thailand, Japan, Vietnam, South Korea, and Singapore taking the top 5 spots respectively. The most figure for growth in arrivals is easily Japan, with 23.6 percent growth. No small feat for a relatively expensive destination, even if it’s China’s next-door-neigbor.
This story originally appeared on Jing Travel, a Skift content partner.
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Photo credit: Travelers are shown at Beijing Capital International Airport in this photo from 2015. A new report shows Chinese outbound travel is up, but spending is down. Ivan Lian / Flickr