Chinese tourists to Thailand may drop as tour group restrictions lift

[reader]

Business in Bangkok's gay venues is reportedly unseasonably low and a good portion of that downturn is being attributed to the absence of tourists from China. The continued failure of major Chinese air carriers to resume international service is seen as a significant factor.

From The Thaiger

In the wake of China’s announcement to allow tour groups to visit Japan and several other nations for the first time since 2020, Thailand’s tourism industry braces itself for a sharp fall in Chinese tourists. This drop is in part caused by ongoing visa application challenges, in spite of the government’s efforts to simplify the process.

This recent development comes as China finally moves to lift previously imposed Covid-19 travel restrictions on tour groups. Aside from Japan, other countries including the US, South Korea, and Australia can accept Chinese tour groups. In addition, China has expressed the desire for Japan to consider a visa waiver for Chinese citizens.

The honorary secretary-general of the Association of Thai Travel Agents (Atta), Adith Chairattananon, expressed the potential lure of simplifying the visa application process could be for drawing tourists at a time when competitors are welcoming tour groups.

Despite the Foreign Affairs Ministry’s attempts to streamline the necessary paperwork for Chinese tourist visas and shorten the approval procedure to seven days, a comprehensive strategy to rejuvenate these market shifts remains vague.

Holding on to his apprehensions, Adith, cannot predict confidently that Thailand will attract 5 million Chinese visitors this year given the minimal growth in the number of tour groups since the Covid-19 pandemic outbreak.

In terms of daily visiting Chinese tourists, the numbers are significantly lower than back in 2019 when over 10,000 tourists entered Thailand per day. To ramp up the tourist volume, Atta proposes a temporary hiatus on tourist visa fees for a few months, reported Bangkok Post.

Operators in the primary tourist city, Chiang Mai, eagerly anticipate an influx of Chinese visitors to bolster their businesses, particularly smaller establishments like hotels, bus services, and certain restaurants catering to larger groups.

These operators previously hosted a significant number of Chinese tourists, with Chiang Mai reporting more than 120,000 Chinese visitors since the beginning of the year. Nevertheless, persistent visa hurdles diminish Thailand’s appeal.

Per the Thai Hotels Association’s survey of 91 accommodation facilities, nearly 70% anticipate Chinese customers to recover only to fewer than 40% of 2019’s figures in the fourth quarter.

However, Nok Air’s chief executive, Wutthiphum Jurangkool, notes optimistic signs of higher demand from Chinese tourists for Thailand compared to Japan due to the lower cost of living. The airline plans to resume flights to an additional four cities by September’s end, in time for China’s Golden Week holiday in October, to cater to the skyrocketing demand, given the currently limited seating capacity.

 

[PeterRS]

It is not just visa processing issues. As my friend from Shanghai informed me earlier this week, after covid many Chinese no longer have valid passports and the backlog is such they will wait many, many months for new ones.

Another factor affecting Chinese demand must surely be the dreadful state of the nation's economy. It has failed to recover from covid anywhere near as quickly as most thought and 2022 saw its worst economic performance in decades. The country is now in recession. The property market is suffering massive declines, far more than in previous years. Unemployment amongst the nation's youth in the 16-24 age range rose to a record 21.3% in June. 11.58 million university graduates are about to be thrown into a job market with few jobs to go to. President XI has urged them to go work in the countryside - echoes of the Mao era. None now want to do so. Then throw in the work force that is starting to show signs of rapid ageing thanks to the now abandoned one child policy.

The losses of once the largest property developer Evergrande rose to US$340 billion last year, making it the global real estate's largest indebted developer. To all intents and purposes it is bankrupt. Hot on its heels, this week now the nation's largest developer, Country Garden, warned the Hong Kong Stock Exchange that it will see a $7.6 billion loss for the first 6 months of this year. No less than 30 real estate companies have already defaulted on overseas loans. The government has increased loans to the sector but they are essentially a pittance that will do nothing to stop the slide.

Worse for the government, in a country where it is usual to pay much of the value up front for property, last year millions of mortage holders rioted when developers could not deliver promised apartments. Indeed, many had stopped construction altogether. Given that China's construction market accounts for a third of the nation's economic output and about 70% of personal wealth, economists agree that the present crisis affecting disruption of such a massive sector will inevitably have an affect on the global financial system. Little wonder that President Biden has warned that China is a "ticking time bomb". 

Clearly many Chinese will still have the desire and the funds to travel. This group will no doubt fill up quite a few aircraft. But for the next few years the Chinese travel bubble is dead. 

https://www.bbc.com/news/business-66470170

https://www.bbc.com/news/world-asia-china-62402961