Decline in Chinese Tourist Spending Forces the U.S. to Reassess

Good morning from Skift. It’s Thursday, August 10. Here’s what you need to know about the business of travel today.

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Episode Notes

U.S. tourism businesses were heavily dependent on Chinese visitors pre-pandemic and now are looking elsewhere to replace billions in tourist spending, writes Global Tourism Reporter Dawit Habtemariam. 

Brand USA CEO Chris Thompson said Chinese visitors spent $35 billion in 2019, making them the largest tourism market in the U.S. in terms of spend.  

So where are U.S. travel brands turning? NYC Tourism + Conventions CEO Fred Dixon cited Brazil as one market the city is focusing on. Meanwhile, LA Tourism CEO Adam Burke said his city is ramping up its marketing efforts in countries such as Australia, New Zealand and the United Kingdom.  

Next, tour operator group TUI has posted its first post-pandemic net profit. However, the company’s overall performance for the year is expected to be impacted by extreme weather throughout Europe, writes Travel Experiences Reporter Selene Brophy.  

TUI Group CEO Sebastian Ebel said on Wednesday that surging travel demand in its third quarter pushed its booking performance to a 6% gain. He added the company had seen a drop in bookings after recent wildfires in Greece’s Rhodes Island. Brophy reports an estimated 8,000 TUI customers were impacted by weather and wildlife disruptions. Although Ebel outlined several ways extreme weather could impact the travel industry and the company, including destinations with more moderate climates likely seeing a boom in popularity.    

TUI Group reported revenue of $5.8 billion during the third quarter, a 19% jump from last year. 

Finally, luxury travel subscription brand Inspirato has had its share of struggles recently, including mounting losses and another round of layoffs. But the company does see a path back to profitability, writes Short-Term Rentals Reporter Srividya Kalyanaraman. 

Inspirato CEO Brent Handler announced a partnership on Wednesday with investment firm Capital One Ventures, in which Capital One would provide Inspirato a $25 million convertible note. In addition, Inspirato has reduced supply, removing 60 residences from its portfolio due to non-renewal and/or early terminations of leases. Handler expressed confidence the company’s efforts to cut costs will be successful and said it can be profitable even without growth.