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Sluggish Chinese tourists’ influx hurts Thailand economy
Chinese tourists are slow to return to Southeast Asian countries, despite efforts to attract them with visa-free travel.
Key Points
- Despite efforts to attract Chinese tourists, Southeast Asian nations are still experiencing a slow return of Chinese visitors, impacting their tourism-dependent economies.
- Chinese tourists who do visit are spending less and haggling for bigger discounts, affecting the earnings of hospitality businesses in the region.
- Companies in Southeast Asia are reassessing their expansion plans due to the lack of Chinese travelers, with some turning to India as an alternative market.
This is causing a decline in tourism-dependent economies and forcing businesses to reconsider their expansion plans. The number of Chinese visitors to countries like Thailand, Cambodia, and Vietnam has significantly decreased since before COVID-19.
Chinese tourists who do visit are more budget-conscious and are haggling for bigger discounts. The slow recovery in Chinese outbound tourism is impacting the earnings of hospitality businesses.
Thailand, in particular, is eager to entice Chinese travelers back to help its economy recover, but cross-border traffic during China’s Golden Week holiday was still lower than pre-pandemic levels.
Thailand’s tourism industry heavily depends on Chinese visitors, with over 10 million Chinese tourists visiting the country annually before the Covid-19 pandemic. The current government in Bangkok is making efforts to recover these figures, including the removal of visa fees for Chinese tourists from September 26 for a period of 5 months.
But recent incidents, such as a shooting in a Bangkok shopping mall, may further discourage Chinese visitors. Some companies are now turning their focus to Indian tourists to make up for the lack of Chinese visitors.
In 2019, Thailand welcomed around 11 million visitors from China, which accounted for 27% of all foreign visitors. However, due to the ongoing global situation, the percentage has reduced to 12% during the January-August period of 2023.
The decline in Chinese tourism has affected various sectors of Thailand’s economy, such as hotels, restaurants, retail, and transportation. According to the Bank of Thailand, tourism contributed about 18% of Thailand’s GDP in 2022. The bank has lowered its forecast for Thailand’s economic growth in 2023 from 3.6% to 2.8%, citing the weak tourism sector as one of the main risks.
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