Outbound Chinese Tourism to Hit 200 Million

Asian brokerage and investment group CLSA has released a new paper exploring the key growth drivers to Chinese outbound travel as well as the destinations, sectors and stocks set to benefit the most.

China, the No.1 contributor to global outbound travel currently comprises 10 percent of total global outbound travel and CLSA anticipates the China’s share of the global total to reach 14 percent by 2020.

In the report, the authors expect the multi-decade Chinese Tourism theme to drive structural growth in the airline, gaming, luggage, retail and internet industries. CLSA remains bullish on the Chinese tourist theme and maintains its long-standing forecast of 200 million Chinese overseas trips by 2020.

If Money is no Object

CLSA has found that Chinese travelers looking for unique cultural experiences are most likely to head to South Korea, Japan, Thailand or the USA in the next three years.

The proprietary survey also reveals that if money was no object, the most highly desired destinations for Chinese tourists are the USA, France, Maldives and Australia, in that order.

Hong Kong’s Loss

The report supports CLSA’s structural negative on Hong Kong’s tourism and retail sectors. A lack of new attractions, increased competition, capacity constraints, the strengthening HK$, tension against mainlanders and a reduction on import tariffs in China saw inbound Chinese tourist numbers to Hong Kong decline dramatically in 2015.

Chinese tourists, who account for almost 80 percent all tourists flow into Hong Kong saw a -2 percent growth Jan-Nov 2015 compared to 16-26 percent annual growth in 2010-2014.

The Preferred Asian Destinations

Australia: Numbers soaring

  • Mainland Chinese travelers make up the second-largest source of inbound arrivals to Australia, with more than one-million Chinese tourists visiting Australia Jan-Nov 2015, surpassing the one-million mark for the first time - an increase of 21.6 percent over the same 12-month period in 2014.
  • Chinese tourists spent AUD$7.7bn in Australia over the 12 months to September 2015, up from A$3.5bn two years prior according to Tourism Australia’s estimation. China is Australia’s most important inbound nationality by spend and is more than double the next most important country, the UK.

Japan: Doubling in 2015

  • The number of Chinese inbound arrivals to Japan doubled in 2015 to 5 million from 2.4 million in 2014. Predicting to more than double again by 2020 to 11.4million.
  • China became the biggest contributor of foreign tourists in Japan in 2015.

Korea: Shopping and Cultural Heaven

  • Chinese tourists’ major purpose to visit Korea is shopping.
  • Korea’s appeal to Chinese tourists is considerable as it meets many criteria - such as safety, moderate travel costs and great sights or culture.

Thailand: The More – The Merrier

  • Inbound tourism from China continues to grow and now one in four tourists visiting Thailand is from China.

Weak Currency Could Derail Growth

The key risks to growth of outbound Chinese travel figures are safety, lower income growth and a weaker Yuan. Safety is always a significant concern for Chinese travelers and 75 percent of survey participants confirmed it was the No. 1 factor influencing their choice of destination in 2015, up from 63 percent in 2014 and 41 percent in 2013. 

Lower income growth in China in 2016 may impact travel plans for mainland Chinese with 60 percent of respondents.

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