A woman carrying a Forever 21 branded shopping bag walks along a street in front of the Ruins of St Paul’s Cathedral
Figures released this week by the World Travel & Tourism Council (WTTC) revealed “severe declines” in tourism revenues last year in both Macau and Hong Kong. The declines were of 32 percent and 8.4 percent respectively.
Analysts believe that the slump in tourism revenues in the two SARs has been primarily seen in visitors from the mainland, a demographic which makes up a significant portion of external visitors to Macau and Hong Kong.
While Hong Kong recently reported a fall in visitors that is being widely accredited to the recent Mong Kok riot, the beating of a mainland Chinese tourist last year and growing anti-mainland rhetoric, Macau’s Chinese New Year visitor volume recorded a growth of 5.2 percent in comparison to 2015.
However, the notable growth in visitors was not paralleled in visitor spending. Casino operators and Macau-based businesses registered drastic drops in commerce, as reported by the Times.
A growth in the number of visitors, but a decline in visitor spending suggests either that Chinese tourists who have a historic tendency to engage in significant shopping sprees, are on average spending less in the MSAR, or that the growth in numbers is due to less affluent visitors.
According to gaming analyst Richard Huang of Nomura Holdings, the latter holds true for the gaming sector where the average daily revenue in February was 20 percent lower than it was in 2015. As the Times reported last month, Huang said that the number of tourists and high hotel occupancy rate do not necessarily translate into increased spending, if “the visitation growth is mainly driven by tourists with weaker spending power.”
In addition to the enduring effect of Xi Jinping’s anti-corruption campaign on visitor spending in Macau, David Scowsill, the president and CEO of the WTTC, told The Financial Times that the slowdown has been exacerbated by Beijing’s move to stem capital outflows from the Mainland.
Scowsill added that holders of the popular Unionpay bank card in China are now restricted to withdrawing a maximum of RMB100,000 per year and RMB10,000 per day at overseas ATMs, which may have further restricted visitor spending.
However external Chinese tourism is not slowing down, as the WTTC figures make clear. The organization claims that Chinese consumers fuelled a travel and tourism boom last year despite the economic difficulties of the country in the second half of 2015.
According to the figures released this week, Chinese tourists spent USD215 billion outside of mainland China in 2015, representing a 53 percent rise from the USD140 billion spent in the previous year.
“[Chinese] outbound tourism is growing like crazy,” Scowsill told The Financial Times. “There were some significant shocks last year, in the stock market and the currency, but it didn’t slow the growth of travel and tourism. Once people have started to travel, they are reluctant to give that up.”
Taiwan and South Korea fared similarly to the two SARs last year, reporting declines in tourist spending of 1.5 percent and 10.2 percent respectively. Japan despite expectations to the contrary, appeared to benefit from Chinese tourism – recording a 47 percent surge in arrivals and a 37 percent growth in visitor spending.
Europe has also performed well in attracting Chinese visitors, who are increasingly looking at travel destinations further abroad than East Asia. Popular destinations, according to WTTC, include the UK, Germany and Iceland.
Meanwhile the number of external tourists visiting China last year edged up to 56.9 million, a rise of just 2.2 percent over the last two years, according to the United Nations World Tourism Organization. Provisional figures from the UN body, as cited by the Financial Times, registered a rise of just 1.1 percent over that recorded in 2014.
Tourism revenues received from foreign visitors also saw marginal growth, reaching USD61 billion last year, according to calculations made by the WTTC.
However the figure accounts for just 2.6 percent of China’s total export revenue, far below the global average of 6.1 percent for economic contributions of external tourism. Daniel Beitler
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