SINGAPORE: China’s currency devaluation and slowing economy have caused enormous turmoil in world financial markets, but they have not really bothered tourists like Henry Lee.
Not yet, at least.
“I don’t even know what the exchange rate is,” the 36-year-old technology entrepreneur from Beijing admitted.
“We’re just here to relax with our kids. We’re not making any big purchases. I bought a Tumi bag, and I got a Tiffany bracelet for my wife,” said the father-of-two during a visit to Singapore’s Merlion Park, which faces the massive Marina Bay Sands casino complex, a favourite destination for Chinese visitors.
Lee is among tens of millions from China’s growing middle class who travel across the globe every year for leisure.
A record 117 million Chinese travelled overseas in 2014, according to the Sydney-based Centre for Asia-Pacific Aviation (CAPA) — more than double the 57 million in 2010 — and experts expect that trend to continue.
“The short-term outlook for Chinese outbound visitors remains strong and the long-term is bright,” CAPA said in a report issued Thursday.
Beijing’s surprise devaluation of its currency on August 11, which is now trading at a four-year low against the dollar, has sparked fears China’s big-spending tourists will start staying at home.
Shares in tourism-linked businesses such as hotels across Asia have tanked, while Cathay Pacific’s chief executive has been forced to reassure investors the airline’s future was secure.
Businesses on the ground, however, say more relaxed visa policies and the strength of the yuan against Asian currencies mean Chinese tourists will remain not only the most numerous, but also some of the biggest spenders.
– Big spenders –
“It’s not uncommon for a Chinese VIP player to gamble well over a million US dollars per trip,” said Aaron Fischer, regional head of consumer and gaming research at brokerage and investment group CLSA. “There’s probably 5,000 of them.”
The financial clout of China’s travellers can be eye-popping.
According to China’s state news agency Xinhua, Chinese tourists spent $164.8 billion in 2014, a four-fold increase compared to 2008. A whopping 88 percent of that was on shopping, it said, citing the China Tourism Academy, a government agency.
Japan alone saw more than 550,000 visitors from China in July, a figure more than double the same period a year ago, and the average Chinese tourist spends around $1,100 — about twice as much as the next-highest spending cohort — according to the Japan Tourism Marketing think-tank.
Fischer predicted that the yuan’s depreciation would not hinder Chinese from travelling but some may become more cost-conscious, particularly when it comes to luxury items.
It is precisely that concern that is worrying organisations like the Indonesian Association of Travel Agencies.
Its chairman Asnawi Bahar said the industry’s fear was that Chinese visitors, who number roughly one million visitors to the archipelago annually, would “hold back on shopping and shorten their stay in Indonesia”.
– Lower visa barriers –
Many of them, however, are helped by the fact that their own currencies have fallen sharply.
The yuan is still at, or close to, two-year or longer highs against the currencies of popular tourist destinations like Japan, South Korea, Australia and the eurozone, CAPA said.
“I think that in the bigger picture scheme of things, Chinese tourism to Australia will continue to rise,” said Craig James, chief economist at Australian stockbroking firm CommSec.
Other countries — from Europe to those in the Asia-Pacific region — have sought to lower visa barriers for Chinese travellers in a bid to attract what the China Tourism Academy says is the world’s largest pool of tourists.
More and more places are becoming friendlier to Chinese tourists, starting from the immigration counter: Chinese passport holders now get visa-free access to at least 74 countries, compared to 18 two years ago.
That is also happening in shops and, CAPA noted, Australian airports now have Chinese-language signs as well as guides and duty-free sales staff who speak Mandarin.
What is clear, according to analysts, is that not only are hotels, retailers and travel firms increasingly catering to the Chinese, but the Chinese are enthusiastic customers.
“If the relative cost of travel changes significantly, what it typically does is move people from one country to another,” said CLSA’s Fischer.
“In emerging markets like China,” he added, “there’s always this very, very strong underlying desire to travel.”