Wed, Sep 11, 2019 - Page 9 News List

Beaches across Asia fall quiet as Chinese tourists stay home

By Siraphob Thanthong-Knight, Harry Suhartono and Nguyen Xuan Qu  /  Bloomberg

Enamored with the sights made famous in hit movies such as Summer Holiday — a 2000 Chinese romantic comedy film set on Malaysia’s palm-fringed Redang Island — Chinese travelers became the biggest group of visitors to the region, adding US$403.7 billion to its GDP this year.

In Thailand and the Philippines, tourism grew to account for over a fifth of their GDP — twice the global average.

The boom dissipated in the first half of this year as China’s economy slowed, its yuan weakened to historically low levels, and an ongoing US-China trade war weighed on consumer confidence.

The decline is also affecting China’s economy at home, as big-ticket purchases like cars and luxury goods slow.

While China’s domestic problems are key, factors in each Southeast Asian country are compounding the decline.

The Thai baht has strengthened the most against the Chinese yuan this year among emerging-market currencies, making travel more expensive for Chinese tourists.

A boat accident last year that killed 47 Chinese tourists off of Phuket also damaged confidence.

In Indonesia, Bali Promotion Board Deputy Chairman, Ngurah Wijaya sees the hotspot as a victim of its own success.

“Internal problems like traffic jams are among the main causes of the decline of Chinese tourists,” he said, adding that those who are still coming are staying fewer days and spending less. “It also seems like they have started to get bored with Bali.”

Bilateral tensions after a Chinese ship surveyed underwater oil-and-gas blocks claimed by Vietnam in July might have contributed to the decline in tourists from China, Vietnamtourism-Vitours’ deputy general director Le Tan Thanh Tung said.

To be sure, not every country is facing a sustained decline. Malaysia’s number of Chinese tourists grew 6.2 percent in the first half of the year to 1.55 million, according to official data.

In the Philippines, tourism infrastructure and facilities are relatively under-developed, so it is not seeing any pull back in hospitality projects, said Richard Laneda, gaming and property analyst at COL Financial Group.

Still, the slowdown in tourism weakens another growth pillar for Southeast Asia at a time when exports are taking a knock from the trade war.

The IMF in its July outlook pared back its forecast for growth in the region’s top five economies to 5 percent from 5.1 percent in its April report, signaling a further slowdown.

Countries are now trying to diversify their outreach efforts to lure visitors from other nations.

Thailand waived visa fees for Indian tourists earlier this year and airline and hotel operators are trying to boost connections between the two countries.

Vietnam, where Chinese tourists accounted for one-third of 15 million foreign visitors last year, is setting up tourism promotion offices in the UK and Australia, while direct flights between India and Vietnam are being planned for next month.

However, in the short to medium term at least, the hole left behind by Chinese travelers seems too large to fill.

“Chinese tourists are the largest group of visitors by numbers,” Wijaya said. “Even the rise in holiday makers from other countries cannot compensate for their absence.”

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