Investors in search of an emerging consumer story need look no further than the remarkable growth in the scale and spending of Chinese outbound tourists.
China Confidential, a Financial Times research service, estimates that total spending by Chinese travellers on outbound trips hit Rmb3.1tn ($498bn) in 2014. Spending by Chinese tourists is now greater than total spending on household consumption of around $436bn in Indonesia and $442bn in Turkey. And this figure is even more remarkable given that the Chinese outbound tourism trend is at a relatively early stage. Although the number of Chinese outbound trips grew 20 per cent year-on-year to 117m in 2014, according to official tourism statistics, less than 6 per cent of the population hold a passport.
China Confidential’s estimate for total spending is higher than the official estimate of $200bn, which excludes spending on flights, visas and other items. But the figures are in line with those from other external sources. They closely match estimates of non-educational spending by Chinese visitors to the US, for example, by the US National Tourism Office.
However, while the amount of current spending and the potential for growth remain enormous, there are signs that many travellers are starting to cut back on spending while overseas as their priorities change.
In particular, China Confidential’s latest annual report on outbound tourism, released this week and based on a survey of 1,288 outbound tourists and 40 travel agencies nationwide, identified a 6.2 per cent year-on-year slowdown in per capita spending on travellers’ outbound trips during 2015, following a 9.4 per cent decline between 2013 and 2014. The most recent contraction was led by an 8 per cent year-on-year decline in spending on shopping.
Read more at Financial Times.