Few tourists
Mr. Tu Quy Thanh, Director of Lien Bang Tourism Company (HCMC), said that he used to organize tours for Chinese tourists to Vietnam before the pandemic, but after the pandemic, he did not receive any Chinese tourists, even when the country allowed its citizens to travel abroad at the beginning of this year.
"I reconnected with Chinese partners who had worked together before the pandemic and discovered that everything had changed. Many companies are still closed and not operating. Partners told me that if they reopened, they would have to start from scratch, so they did not continue. China has been closed for so long that travel company owners have changed jobs and their staff has also scattered," he said.
Chinese tourists on charter flight to Cam Ranh airport after pandemic
According to the National Tourism Administration, in July, Vietnam welcomed 180,000 Chinese visitors, an increase of 14% compared to June, and in the first 7 months, it welcomed nearly 738,000 visitors from this market. Meanwhile, in July 2019 (before the pandemic for comparison), there were about 407,000 Chinese visitors to Vietnam, with a total of 2.9 million visitors in 7 months. Thus, it can be seen that the recovery rate of Chinese visitors to Vietnam is low (about 30%). Meanwhile, many other international tourist markets of Vietnam have returned to almost normal or better than before the pandemic such as Thailand, Singapore, the US, Australia, South Korea, the UK, Germany, etc.
According to Mr. Thanh, an observer of the tourism industry with the billion-people tourist market, in reality, most of the Chinese visitors to Vietnam recently are visitors coming to work or do business after the pandemic, while pure tourists account for a low percentage. These tourists mainly enter Vietnam via charter flights or groups through border gates with short-term itineraries.
"Partners still operating in the tourism sector have not thought about recovering the outbound market (bringing tourists abroad) and are only focusing on the domestic Chinese market. Vietnamese tourism businesses are still facing many difficulties after the pandemic, so they cannot support their partners in doing market research, because if we invite them to survey, we will have to bear the costs, and if we split 50-50, our partners cannot handle it. We ourselves are also facing difficulties. Even Vietnamese tourists traveling to China are not many, charter flights to Phoenix Ancient Town... have very few customers, partly due to high prices. For example, tours to Chengdu currently cost 18-19 million VND/person, about 6 million VND higher than before the pandemic. With this price, customers choose to go to more popular destinations. In general, both sides are having difficulties, because so far, everything has not returned to normal, both aviation and landtour costs (ground services) are too high," Mr. Thanh analyzed.
Meanwhile, Mr. Nguyen Chau A, Director of Oxalis Adventure Company, commented: "For Vietnam destinations, I think that services at destinations such as hotels, restaurants, shopping facilities... exclusively for Chinese tourists have almost completely closed after the pandemic and that is one of the reasons why Chinese travel companies have not been able to bring tourists over."
Where did the Chinese tourists go?
Not only Vietnam, but countries in the Southeast Asian region are also suffering from a severe shortage of visitors from China. While the impact of Chinese visitors on the region is huge. Tourism revenue accounted for 5.7% of Malaysia's gross domestic product in 2019, and Chinese tourists accounted for 17.8% of that revenue. Similarly, 11.4% of Thailand's GDP is generated by tourism, with a whopping 28.1% coming from Chinese spending. The pandemic disrupted this trend, but many governments and businesses believed it was only temporary. That turned out to be wrong. In 2021, Chinese tourists fell to 8.5 million globally. And the recovery, so far, has been disappointing. Chinese summer tour bookings this year are at 30% of pre-pandemic levels in Malaysia and 10% in Thailand.
When will Chinese tourists return? Southeast Asia could be waiting a long time, according to Bloomberg.
The absence of Chinese tourists means no country in Southeast Asia has recovered international tourist arrivals to 50% of pre-pandemic levels.
There are a number of issues that make it difficult for Chinese tourists to return to the crowded region. Flight capacity – especially between China and Southeast Asia – has not returned to 2019 levels, and China’s economic slowdown is making Chinese consumers cautious. Southeast Asia’s tourism sector should not expect a return to the Chinese tourist boom of the 2010s at this point.
There are reasons within China to suggest this is true. For one thing, younger Chinese are no longer interested in the group travel experiences that have long dominated Chinese vacations, with their parents taking them abroad. A recent survey of 2,000 Chinese travelers found that 76% are looking for “fewer people” and fewer itineraries. Instead, today’s Chinese travelers are looking for “tailored” experiences that offer access to unique cultural attractions. Crowded beaches and chain restaurants are no longer the norm.
Thailand is by far the most popular destination for Chinese tourists in Southeast Asia.
Second, the Chinese are spending more money at home, especially on luxury goods. In 2019, the Chinese accounted for 35% of the global luxury market, but only 11% of their purchases were made in China due to high taxes at home. Luxury stores and duty-free shops in places like Bangkok, Phuket and Kuala Lumpur have benefited. But China has developed a policy of opening up duty-free shops at home, which is rapidly increasing luxury sales and could account for nearly 90% of Asia-Pacific duty-free sales in the next few years.
In the short term, Southeast Asian countries cannot make up for the lack of Chinese tourists, according to Bloomberg analysis. But in the long term, they should expand their tourism marketing and reach out to other countries with expanding middle classes. India is a good market to start a new strategy. Like China in the 1990s, it has an increasingly wealthy, well-traveled population and a growing aviation industry. Earlier this year, the Asian Development Bank argued that India could become the “next China” in terms of outbound tourism.
Tapping the Indian tourist market will require taking many of the same steps that Thailand, Malaysia and other countries have long taken with China: easing visa policies, expanding air links and helping hotels, restaurants and attractions tailor their services to Indian visitors. But one thing is certain: India will not make up for the loss of Chinese tourists anytime soon.
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