With visa rejections increasing and the number of new visas decreasing, the outlook was already murky before latest U.S. tariffs were proposed: At first blush, one would generally regard the news last week that U.S. President Donald Trump has called for 10 percent tariffs on $300 billion in Chinese imports, effective Sept. 1, as a bad sign for the future of inbound tourism from China, which is the number three overseas tourism source market for the U.S. And it was.
But, perhaps, there was more telling evidence of a decline in the numbers posted last week by the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO) and those gathered and released by Dragon Trail Interactive, a China-focused digital marketing agency with offices in China, the U.S. and the UK. The latter held a webinar to discuss data from the first half of 2019, as well as the near-term outlook for the Chinese market. Following are some notes and info-bytes from the Dragon Trail webinar, and from NTTO.
—The most uncomfortable number of those noted during the webinar was this: rejection rates for those seeking a visa to travel to the U.S. have been steadily rising, with a 17 percent rejection rate for Chinese short-term visitor visas in 2018. (They’ve gone even higher according to those who do business in China—see the previous issue of INBOUND for more on this subject here.)
—In the first 5 months of 2019, there has been a 17 percent decrease in B1/B2 visas issued to Chinese travelers.
—Data released by NTTO in June NTTO showed a 5.7 percent decrease in Chinese arrivals to the US in 2018, the first decline in 15 years.
—Meanwhile, preliminary NTTO figures for the first six months of 2019 indicate that, after a year-on-year increase for the month of January, visitor traffic to the U.S. from China has declined every month. For the first half of 2019, the total number of Chinese visitors to the USA was 1.426 million, down 3.3 percent from the 1.475 million registered for the first half of 2018.
—Forbes reported a 10.1 percent decline in Chinese visitors traveling for pleasure in 2018, and a 5.3 percent decrease in Chinese visitors traveling for pleasure from January-May 2019.
—As of June, Chinese visitors to Hawaii were down around 36 percent.
—There has been decreased Chinese shopping reported on both U.S. coasts, with an 11.9 percent drop in Chinese tourism spending in New York City in the first quarter of 2019.
—The USA has dropped in popularity: according to Ctrip, the U.S. was the 9th most popular destination for the May holiday in 2019—down from 5th most popular in 2018.
—In May 2019, Horwath HTL and World Tourism Alliance survey of the Chinese travel trade revealed negative sentiment for North America.
Source: China Outbound Tourism Market Sentiment Survey June 2019
The Reasons for Decline, According to Dragon Trail:
—Travel warnings and worries about safety
—Negative media coverage in China linked to trade war
—Image of the US as unwelcoming, xenophobic
—Visa rejection rates
—A decline in Chinese buying power – the Chinese yuan has fallen 8.7 percent against the U.S. dollar since tariffs introduced (This is affecting other U.S. sub-markets such as the Mariana Islands).
As for the travel warnings and worries about safety, INBOUND asked Sienna Parulis-Cook, Dragon Trail’s communications manager about the matter, and her answer echoed that of Daniel Shen, a marketing rep for a number of major for U.S. DMOs and other clients who told us in the previous issue of INBOUND that the Chinese government had issued a warning to Chinese travelers regarding their safety while in the United States. An identical warning was issued last year both Shen and Parulis-Cook, with the difference this year the constant coverage of the subject in print, broadcast and online news media.
Final Notes from Dragon Trail
—Outside of the U.S., Southeastern Europe “is big” as an emerging destination.
—More country markets and DMOs are using WeChat programs.
—Short videos have become a must for those using WeChat to promote.
—U.S. DMOs are in the lead on WeChat. Australia and Northwest Canada are strong; the top European accounts are Edinburg, Bavaria and Geneva
—In digital brochures and video, romantic themes are doing well, as are nature and wildlife themes.
To view a video of the Dragon Trail webinar, click here.