US loses billions as Chinese tourists stay away over trade war | Business| Economy and finance news from a German perspective | DW | 13.06.2019
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US loses billions as Chinese tourists stay away over trade war

The number of arrivals from China to the US fell last year for the first time in 15 years. The Chinese are the world's highest-spending foreign visitors and their tourism dollar is sorely missed.

The United States has fast grown addicted to the $36.2 billion (€32 billion) in annual tourism receipts from Chinese visitors, a figure that has grown more than 15-fold since the turn of the century.

Last year, however, the number of Chinese tourists to the US fell sharply for the first time since 2003, in part due to a slowdown of the world's second largest economy, but even more so, because of the worsening trade spat between Beijing and Washington.

Figures from the US National Travel and Tourism Office showed a 5.5% drop in arrivals from China in 2018, and industry analysts say the decline appears to be deepening this year.

Grafik showing Chinese tourism to the US falling

US tourism chiefs had predicted that growth in tourism from China would continue past 2022, but the threat of tit-for-tat tariffs on imports, along with the US embargo on the tech giant Huawei, appears to have put paid to that. 

Chinese still traveling  

By contrast, more than 100 million mainland Chinese travelled abroad last year — a record number, according to the China National Tourism Administration. But the majority of them picked other Asian destinations, while those who did venture further abroad, chose Europe.

The impact of the drop in arrivals is likely to be felt throughout the US economy. American companies have put considerable resources into becoming China-friendly, especially as Chinese tourists spend an average of $5,900 per trip — about half more than visitors from other countries.

Although the Chinese have gained a reputation for boorish behavior on foreign trips while being transported to the usual tourist traps in large tour groups, the stereotype is increasingly inaccurate.

China is now one of the world's wealthiest countries, and many of its citizens have substantial travel budgets to splash on luxury transportation, accommodation, and shopping.

Graphic showing Chines being the highest-spending tourists to the United States

"More and more destinations are trying to adjust their offer to welcome upscale Chinese tourists," Glenn McCartney, a tourism professor at the University of Macau, told DW.

He described how designer brands in several countries have put Chinese signage in their stores and hotels have staff who speak Mandarin, and who offer green tea and Chinese delicacies to arriving clients. 

Education boost to tourism  

The US, along with Germany, Britain and Australia, benefits from the vast numbers of Chinese nationals who study at its top universities. Not only does education count in the US tourism spending figures, it also offers the host country the opportunity to create long term and profitable links between east and west.

"When Chinese families send their children overseas to study, the parents will visit, and sometimes they'll open a business, buy property, or another investment," McCartney added. Those additional benefits are at risk when Chinese nationals are increasingly conflicted between their own advancement and loyalty to the state.

"They have so much choice about where they can visit these days," he told DW, adding that Beijing has concluded Approved Destination Status (ADS) with more than 140 countries, a deal that must be in place before Chinese nationals can travel there.

Accusations that both sides have weaponized tourism as part of the trade dispute between the two rivals were bolstered recently by guidance from Beijing over travel to the US and vice versa. 

Travel warnings issued 

For the second time in a year, officials warned Chinese citizens about the "risks" they may face, given the amount of gun violence in the US. The foreign ministry also warned that immigration officials were harassing Chinese nationals upon US entry or exit.

That prompted a similar warning to US nationals traveling to China, some of whom the US State Department said faced bans from exiting the communist country. It warned that the bans are being used to coerce Americans to participate in Chinese government investigations.

US tourism to China reached 2.2 million in 2016, up 10% on the previous year.

If government warnings play up the fears of tourists, then social media often reinforces those jitters. Years of heavy censorship in China has prompted the public to share more information privately.

Platforms like WeChat and Weibo now help fuel anxiety about those negative stories, including bad experiences on foreign trips, where footage and images can quickly go viral.

"This sharing can be very damaging," McCartney explained. "If a Chinese tourist sees something amiss, if something negative happens on their trip, it will be shared very quickly."

Watch video 01:59

Chinese tourists in Trier

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