It’s hard to deny the opportunity that outbound Chinese tourism represents for economies around the world. The population of China is enormous, and incomes are rapidly rising. It’s no surprise then that destinations around the world are jumping on the bandwagon to attract Chinese travelers, and Chinese tour groups have become ubiquitous in many major destinations around the world. However, like with all things, more isn’t always better. Poorly designed and/or implemented policies can result in a tourism influx that is, in fact, a net-negative, even as the number of Chinese visitors skyrockets.
When it comes to Chinese tour groups, more isn’t always better
A prominent case in point is Russia and the country’s skyrocketing inbound Chinese arrivals. Russia saw a record number of Chinese arrivals in 2017 at 1.78 million, up from around only 979,000 in 2012. While these numbers reflect all total Chinese arrivals, they nonetheless illustrate the growing interest of Russia as a travel destination for Chinese tourists.
The issue, however, is that this impressive growth in arrivals is producing very little revenue for Russian firms or contributing to the Russian economy. Ivan Zuenko, a research fellow at the Center for Asia Pacific Studies of the Russian Academy of Sciences Far Eastern Branch, recently discussed this topic in an article for the Russian think tank, the Carnegie Moscow Center.
The reasons for this lack of revenue has little to do with how much Chinese tourists are spending, but rather where they are spending it. While the number of countries around the world allowing Chinese citizens to visit without securing a visa first is on the rise, Russia is not one of them, despite the two countries’ historically close diplomatic ties.
Russia provides one of the most sobering examples of how tourism policy can fail, despite skyrocketing arrivals
Instead, Chinese citizens can apply for an eVisa for travel to specific administrative regions in Russia’s Far East, or travel visa-free as part of tour groups of at least five persons. This is how the vast majority of Chinese tourists travel to Russia.
This is not an inherently bad practice. However, the result has been, much to the frustration of Russian tour operators, that local firms receive little revenue. Chinese tourists book tours through a Chinese tourist agency and pay through Chinese banks. These tourists often eat at Chinese-owned restaurants because of agreements between the tour operators and owners, and the operators buy rooms in bulk at lower prices. In short, for the most part, Russian businesses are wholly cut out of this revenue stream. Moreover, the majority of revenue circulation is never even converted into rubles, thanks in part to payment platforms like WeChat Pay.
Examples like this should underscore to destinations that achieving success in regards to Chinese tourism is less about the overall numbers, whether it be spending per trip or number of trips, but rather the kinds of travel and the policies that regulate them. The problem detailed above is not a uniquely Russian affair.
Destinations around the world are struggling to combat exploitative tour groups, that often cut out locally-owned operators and businesses altogether
Thailand has been one of the most prominent examples, and the country has gone to great lengths in combating so-called “zero-dollar tours,” that contribute little or nothing to the Thai economy, but strain transportation infrastructure and lead to crowded streets.
Vietnam too has attempted to address the cutting out of Vietnamese operators and businesses from Chinese tours. Vietnamese law actually prevents foreign citizens from acting as tour guides. But tour operators have simply skirted the law, leading to accusations that locals are being blocked from the industry.
Chinese tour groups are not necessarily a bad thing, of course. In truth, for many Chinese tourists, it is merely the best option for travel, especially for older Chinese tourists (who make up the majority of Chinese tourists in Russia). They often have little experience going abroad and limited language skills. Moreover, there is not the same wealth of travel information online in Chinese as compared to English. Organized tour groups with experienced and Chinese-speaking guides is an ideal middle ground for these travelers.
By extension, this makes the promotion of Chinese tour group travel an ideal means of reaching certain Chinese travel demographics. However, while tour groups can certainly be an easier solution to promote arrivals and spending, they often require substantially more nuanced regulation and oversight to ensure that destinations and economies properly benefit from Chinese group travel. Without such regulation, destinations can find themselves in the strange position of attracting millions of Chinese travelers, who contribute little or nothing to the local economy.