We’ve finally received some concrete numbers about the negative impact of Sino-American tensions and the looming trade war on Chinese tourism to the United States. These latest preliminary numbers come from a new report by ForwardKeys. According to their estimated data, bookings by Chinese tourists to the United States are down 8.4 percent for the year to August compared to the same period last year. Bookings were actually up from the last week of February until March 23, when the first U.S. tariffs were put into place. However, tensions have eliminated any possibility for growth of Chinese tourism to the United States in 2018.
It was a safe assumption that Chinese tourism to the United States was going to take a hit from the political disputes between Beijing and Washington, even if Chinese authorities aren’t likely to make a move to use regulations to restrict travel as they have to destinations like Palau and South Korea. Rather, this drop is likely due more to how nationalism shapes outbound Chinese travel.
Beijing is unlikely to actively restrict the flow of Chinese tourists to the United States, but that hasn’t stopped them from stoking anti-American sentiment
Nationalist and anti-American sentiments have been actively stoked by Chinese authorities this year to drum up support for Chinese retaliation to American trade policy. The most prominent example came from officials at the Chinese embassy to the United States when they issued a travel warning for the United States, citing gun violence, crime, and the cost of healthcare. In the warning, the Chinese embassy said, “American public security is not sufficient, shootings, robberies, and theft are frequent.”
However, it’s also very important to point out that the mounting trade war is not the only source of falling Chinese tourism to the United States. The Chinese yuan has fallen in value this year and is currently down 7.5 percent to the dollar since the introduction of tariffs. This makes tourism to the United States that much more expensive and will hamper the overall growth of Chinese outbound tourism to all destinations this year.
Of course, despite a falling yuan, bookings by Chinese tourists for overseas destinations are still up this year. ForwardKeys is estimating that from August to December 2018, Chinese bookings for overseas travel will grow by 5.5 percent, while bookings to the United States will be down by 9.6 percent compared to the same period last year.
Unfortunately, these numbers are preliminary, and no official data has been released by the National Travel & Tourism (NTTO) on spending and arrivals after the recent debacle over arrivals calculations by U.S. authorities. The NTTO has opted to block the release of new data and the latest officials figures are only from September 2017. Unfortunately, it has added substantial confusion to an already challenging situation for U.S. tourism stakeholders.
The trade tensions between China and the United States could cost the U.S. tourism industry over $500 million and lead to a reduction of Chinese arrivals by almost 5 percent
However, ForwardKeys has released their own estimations of how spending and arrivals of Chinese tourists to the United States will shape up. ForwardKeys Co-founder and CEO, Olivier Jager, noted:
“Our findings strongly suggest that President Trump’s trade war has had a significant impact on Chinese tourism to the US. Looking at the year to date, we see a setback in Chinese tourism arrivals of just under 5%. If that continues to the end of the year, we estimate that the cost to the US economy will be north of US$ ½ billion in 2018. Chinese spending in this sector is significant – it amounts to the largest category of US services exports to China. It is unquestionable that the Chinese appetite for visiting the USA is diminishing, and that is bound to worry the US travel industry.”