Brexit has created substantial concerns about the British economy and its place in the world. Currently, the Tory government is currently in triage mode. Britain had an ideal agreement with the EU, where they could both maintain currency independence and take advantage of the inter-connectivity of the European economy. Given Britain’s precipitous economic standing, maintaining and growing lucrative sources of revenue is key. In short, Chinese tourism is more important than ever for the United Kingdom and the British government hopes that a new open skies agreement with China will facilitate its growth.
Chinese tourism is more important than ever for the United Kingdom
Reduced visa requirements are all fine and good, but it doesn’t mean much if the number of flights between a source market and a destination is restricted. More flights and more capacity means more opportunities to attract tourists because of flexibility both in schedules and prices. Open skies agreements remove all artificial quotas and restrictions on the number of flights to and from signatory nations, allowing airlines to fully meet demand for travel. Most importantly they encourage the development of direct routes between destinations and source markets.
In many ways, such agreements are a no-brainer for destinations eager to attract Chinese tourists, especially in the West. Direct flights can alleviate the substantial difficulty of travel to and from China. The United States has been hesitant about any open skies agreement with China, largely because of the preferential treatment Chinese airlines receive at Chinese airports. A Sino-American open skies agreement would put American airlines at an even greater disadvantage by giving Chinese airlines increased access to takeoff and landing slots at U.S. airports.
Direct flights between Britain and China have already had tremendous success promoting Chinese tourism
Britain has no qualms about this possibility, perhaps because of the relatively smaller size of the British aviation industry. However, a significant factor in regards to this decision is the undeniable success of direct flights between Britain and China in promoting Chinese tourism to the UK and British exports to China.
For Britain’s north, such flights actually resulted in 15 percent higher Chinese arrivals than estimated over the past two years, with a total of about 90,000 passengers from Beijing to Manchester. The value of goods exported from Northern England to China also jumped 265 percent, reaching approximately 200 million pounds ($267.8 million). Chinese tourist revenue in the region doubled to about 140 million pounds.
Direct flights to North England helped double Chinese tourist revenue within two years
This growth produced by direct flights is even more impressive given the relatively lower tourist interest in the region, with the vast majority of Chinese tourists to Britain drawn to England’s south and London in particular.
While Britain is succeeding in attracting more Chinese tourists, due in part to a cheaper pound, it’s still lagging behind its neighbors. During the first half of this year, Chinese arrivals to the UK grew by 50 percent compared to the same period last year. But Britain has a long way to go before it can attract the number of Chinese tourists France or Germany do.
Nonetheless, an open skies agreement is a substantial first step on capitalizing on a cheaper currency and encouraging long-term Chinese tourism growth. Hopefully, an increased number of direct flights between the UK and China will produce results similar to Northern England nationwide.