We already knew that overall Chinese tourist arrivals to Britain grew in a big way in 2017. However, we finally have full numbers for arrivals from VisitBritain, the tourism board of the United Kingdom. Overall tourism arrivals were up by 4 percent, reaching 39.2 million inbound visits, and tourist spending was up by 9 percent, to reach $32 billion. While this is impressive overall growth, it pales in comparison to the growth of Chinese tourism to the UK. Overall, Chinese arrivals were up by 29 percent overall to reach a total of 337,000 Chinese visitors. Chinese visitor spending was up by 35 percent to reach $900 million.
Chinese visitor spending in the UK grew by 35 percent in 2017, with arrivals up 29 percent
Particularly encouraging among these figures is how spending growth outstripped extremely strong arrivals growth. Chinese tourists spent an average of $2589 per visit in Britain in 2016. 2017 saw substantial growth of 4.5 percent to reach $2707 per arrival. While this might seem like modest growth, it’s impressive in that the overall spending per capita by outbound Chinese tourists saw a decline in 2017, meaning that Britain is bucking the overall global trend.
Moreover, Chinese tourists, while small in total number, punched well-above their weight in terms of average spending. Chinese arrivals accounted for a grand total of 0.86 percent of total arrivals to Britain in 2017, but accounted for 2.8 percent of spending. The average tourist in the UK spent $816, less than a third of the average Chinese tourist.
Growth across the board was not even, however. Ctrip, for example, announced that growth in travel to Britain during 2017 among its users was up by 100 percent, a substantially higher figure than overall Chinese tourism growth.
Arrivals to Britain were even higher among Ctrip users, which reported a doubling of the number of Chinese tourists using the platform to travel to the UK
While the marketing of VisitBritain and other DMOs in the UK deserve credit, it’s hard to deny that the biggest factor in driving growth has been the post-Brexit devaluation of the pound. Just before the Brexit vote, the value of the pound to the Chinese yuan stood at 9.66, but it quickly fell to a historic low of 8.22.
While the pound has recovered since mid-2016, it’s still far lower than before the Brexit vote. The rate now stands at 8.89 yuan to the pound. The value of the pound has been greatly depressed by the overall lack of stability regarding the ongoing Brexit negotiations. Recently, Foreign Secretary Boris Johnson resigned from his post over Prime Minister Theresa May’s “soft Brexit strategy.”
The ongoing uncertainty regarding the Brexit negotiations is bad for the British economy, but good for its inbound tourism industry
While all of this instability and uncertainty is bad news for the overall British economy, it’s undeniably good for the tourism industry. A weak pound means that Britain is a much more affordable tourism destination. For Chinese tourists looking to get deals on luxury goods at the UK’s duty-free shops, it’s even better news.
However, as we at Jing Travel have noted before, an inevitable revaluation of the pound puts this Chinese tourism growth at risk going forward. How many months (or years) it will take for the pound to fully regain value is anyone’s guess.
On the other hand, the potential Sino-American trade war has resulted in a yuan-devaluation. If this situation continues, it could also damage Chinese tourism growth to Britain. A cheaper yuan means more expensive outbound travel for Chinese tourists. However, this devaluation is not likely to be as dramatic, or long-lasting, as the current pound devaluation.