China is seeing a surge in outbound tourism as tourists pack up their bags and head to holiday destinations after three years of coronavirus quarantine. But some countries in Southeast Asia are learning that post-pandemic travel demand may look different than before. Gary Bowerman reports.
On June 29, Malaysia’s Tourism Minister Tiong Kin Sing personally intervened at Kuala Lumpur International Airport to release a Chinese national detained by immigration officials. Local media debated whether the minister had security clearance to enter the arrivals hall, while social media speculated as to why the Chinese visitors were denied entry.
Fast forward to September 25th. Thai Prime Minister Sureta Thavisin personally welcomed the first Chinese tourists arriving at Bangkok’s Suvarnabhumi International Airport after the Thai government granted visa exemptions to attract tourists from China. Nine days later, he stood at the hospital bedside of a Chinese man injured in a shooting at a Bangkok shopping mall during the Golden Week holiday in October, killing another Chinese customer.
Hall of Suvarnabhumi Airport at sunset in Bangkok, Thailand.Image: Wikimedia Commons
These contrasting events highlight the delicate diplomacy surrounding Chinese tourists in Southeast Asia. The region hosted 32.3 million Chinese tourists, 23% of all arrivals in 2019, the year before travel was halted due to the coronavirus. That total has nearly doubled from 16.4 million people in 2013. Chinese tourists are coveted for their purchasing power and related economic ecosystems such as airlines, hotel investments, and real estate purchases.
Tourism, trade and diplomacy
Southeast Asian tourist destinations are fiercely competing to attract Chinese tourists. In 2019, Thailand welcomed 11 million Chinese tourists, while Malaysia welcomed 3.1 million. The picture is more complex and goes beyond visitor numbers and spending. Trade and investment relations, strategic politics, diplomacy and tourism are intertwined in a complex bilateral relationship.
This is partly because the Chinese government views tourism benefits differently. Across Asia, inbound travel and domestic tourism spending are key indicators used by governments to benchmark the visitor economy. Maximizing annual arrivals, particularly from key markets such as China, is considered an essential driver of economic growth, job creation and securing inbound investment.
In contrast, inbound tourism has not been very useful for the Chinese government, although promoting the tourist economy is included in the 14th Five-Year Plan (2021-2025). Instead, it leverages the world’s largest outbound market for foreign policy. Tourism is important because it is central to a wide range of government relations.
President Xi Jinping became the first Chinese leader to quantify tourism output in the context of foreign policy in his speech at the 2015 Boao Asia Forum conference. “China’s economy will bring opportunities for trade, growth, investment and cooperation to other countries in Asia,” he said. “Over the next five years, China will import more than $10 trillion in goods, China’s overseas investment will exceed $500 billion, and overseas travel by Chinese tourists will exceed 500 million.”
Outbound travelers from China are playing a role in how the country’s foreign policy is viewed.Image: Wikimedia Commons
Awakening of the Dragon
After three years of coronavirus isolation, China began restoring travel connectivity with the world on January 8th. China entered the pandemic as the world’s largest outbound market, generating 170 million cross-border trips in 2019. Even though international travel has been suspended since March 2020 due to the zero-coronavirus policy, China comfortably maintained its second-largest position in the world due to the volume of domestic travel. air market. As a result, Asia-Pacific countries expected a quick release of “revenge travel” demand and a relatively large number of Chinese tourists and business travelers compared to 2019. A 2023 revision of history will likely conclude that these expectations were simply too high.
While the region’s tourism sector was awaiting the return of Chinese tourists, air travel initially went in the opposite direction. In spring 2023, a procession of Southeast Asian leaders arrived in Beijing to meet President Xi Jinping. These include experienced personnel such as Prime Minister Lee Hsien Loong of Singapore, Prime Minister Hun Sen of Cambodia, and President Joko Widodo of Indonesia, as well as recently elected President Ferdinand Marcos Jr. of the Philippines and Anwar Anwar of Malaysia. Prime Minister Ibrahim was also included. They shared similar agendas, including regional defense and security, trade and investment, and infrastructure financing. Expanding air connectivity and tourism were also priorities.
The resurgence of international travel in China has reinvigorated the role of tourism in regional growth. The Asian Development Bank said in April that China’s economic resumption “could trigger a faster-than-expected recovery.” The region’s growth rate was predicted to expand from 4.2% in 2022 to 4.8% in 2023 and 2024, due to an improvement in “consumption, tourism and investment.”
Golden Week in October is hectic.
Six months on, media across Southeast Asia are bemoaning the slow recovery in Chinese tourism, especially during October’s eight-day National Day. “Vietnam is no longer the first choice for Chinese tourists,” VnExpress headlined. “Where are the Chinese tourists?” asked Singapore’s Business Times. “Cambodia is keen to welcome more Chinese tourists,” the Khmer Times noted.
One of the intercity express buses between Siem Reap and Phnom Penh plies the road to Kampong Phluk in Cambodia.Image: Wikimedia Commons
The most gloomy reaction has been in Thailand, where uncertainty prevails after a Chinese national was shot dead and another injured at Bangkok’s Siam Paragon mall. Thailand’s tourism authority has lowered its forecast for Chinese arrivals in 2023 from 5 million to 4 million.
China’s outbound recovery has been “gradual”, said Jesper Palmqvist, Asia Pacific director at Singapore-based hotel data consultancy STR. “It remains a big unknown. International air transport capacity will continue to increase, but it will take time to fully recover.”
Restrictions on flight availability are an important factor. In the year to October 8, airlines operated 268,000 international flights, a 64% decrease compared to the same period in 2019. On a weekly basis, China’s international seat capacity is only 57% of 2019 levels.
new tourism competitors
Tourism bureaus eager to boost the economy with Chinese tourists now face a new competitor: China. 826 million people made domestic trips during Golden Week. During the coronavirus era, Chinese cities, tourist destinations, airlines, hotels, OTAs, and car rental companies have effectively leveraged Chinese social media apps to meet changing consumer travel preferences.
“During the three years when people didn’t travel abroad, there was a huge shift towards an internal focus, especially around social media,” said Jerez Jansen, a travel industry consultant based in Shanghai. “Homegrown brands are growing by understanding Chinese consumer behavior at ‘China Speed’.”
With all eyes on 2024, the biggest learning for regional destinations in 2023 is managing expectations. As Chinese tourists expand into Southeast Asia, a “big unknown” remains on the minds of governments, tourism boards and the travel industry.
– Asia Media Center
