Whenever the topic of Chinese tourism arises, it’s hard to resist the temptation of making a tongue in cheek reference to the various stereotypes involving Chinese tourists who obsessively take pictures of various landmarks. Behind those stereotypes, however, lie numbers which paint a remarkably clear picture: there is a tremendous amount of money on the table when it comes to the tourism variable of the Chinese equation.
How much, one might ask? There are two important dimensions.
On the one hand, we have inbound tourism or in other words, foreign tourists who visit China. During the year 2018, there have been over 140 million people who did just that, 141.2 million to be more precise. As impressive as this number may seem, it only marks a modest 1.2% increase compared to 2017, an increase we can definitely consider well below average (compared to other sectors of the Chinese economy). While arrivals have only increased at a (very) modest pace, overnight arrivals have gone up by a more reasonable 3.6% in 2018 compared to 2017, with a grand total of 62.9 million overnight arrivals.
However, there is an important caveat we cannot ignore: out of the 141.2 million tourist arrivals for 2018, almost 80 million have been from Hong-Kong, roughly 25 million have been from Macau and 6.14 million from Taiwan. After subtracting these numbers from the grand total, we are left with just slightly over 30 million “foreign” tourists. When it comes to overnight arrivals, the Hong Kong + Macau + Taiwan numbers are less overwhelming but still, we are only looking at 23.64 million “foreign” overnight arrivals out of the previously mentioned 62.9 million grand total.
On a similar note, we cannot help but observe that out of the top 15 nations which generate inbound tourism revenue for China, only four are outside Asia, more specifically the United States, Russia*, Canada and Australia. As such, a compelling case can be made that there is ample room for growth when it comes to the non-Asian dimension of China’s inbound tourism equation, in light of the fact that a staggering 76.3% of all inbound tourists are Asian (with Europeans at just 12.5% and the US at a mere 7.9%).
On the other hand, there is of course outbound tourism, or Chinese tourists who travel abroad. With almost 150 million arrivals of Chinese tourists overseas, let’s just say the Chinese population is an economic force to be reckoned with in the tourism department as well. Unlike the less than impressive inbound tourism growth rate, outbound trips have gone up by 14.7% in 2018 compared to 2017, bringing 2018’s grand total to 149.72 million trips.
Structurally speaking, the same observation as with inbound tourism can be made in terms of Asian dominance. As such, among the top 10 destinations preferred by Chinese tourists, only two are outside Asia, specifically the United States and Russia*. As China’s population becomes more and more financially strong, we can expect the growth rate when it comes to “exotic” (non-Asian, in our case) destinations to be quite dramatic. The same way, we do need to keep in mind that at this point, outbound tourism numbers in general are disproportionately generated by the (far) more affluent inhabitants of China’s largest urban centers, with less developed regions having quite a bit of catching up to do.
After drawing the line, even in light of the remarkable potential that lies ahead, China is a considerable force in tourism today as well. More specifically, it has been the #4 most visited nation worldwide since 2015, whereas Chinese tourists have been the #1 global spenders as of 2012, with over 20% of the world’s spending in the tourism department being of Chinese origin.
No matter which dimension we are looking at, Chinese tourism can be considered a vital variable:
- Internally speaking, the fact that tourism-related activities account for over 10% of China’s GDP (11% in 2018 according to data distributed by the Ministry of Culture and Tourism) speaks for itself and in nominal terms, it’s only a matter of time until the $1 trillion per year threshold will be reached in terms of overall tourism-related earnings (currently at approximately $881.49 billion)
- Externally speaking, it is hard to believe that a trend so powerful will emerge when it comes to another nation that China’s position as the world’s #1 tourism-related spender will end up being at risk. Especially in light of the fact that the middle class of China is just starting to get used to the idea of having excess capital at its disposal and while the nominal perspective is impressive due to China’s sheer population, the average Chinese citizen still has a lot of catching up to do until parity with Western counterparts is reached when it comes to pretty much all important metrics