Have yuan, will travel far and wide

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(China Daily) 14:07, October 14, 2013

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The rising value of the yuan has had a curious side effect: It is often cheaper for Chinese tourists to travel to exotic foreign destinations than it is to travel to China's popular resorts.

A Beijing resident looking for an island break, for example, may find it more economical to go to Sri Lanka than to Hainan.

Over the next year, the number of outbound trips from China will top the 100 million mark for the first time in history. The rising number of Chinese people traveling abroad has grown even faster than predicted. The UN World Tourism Organization (UNWTO) had expected China to hit this particular milestone in 2020. This growth will further cement the position of Chinese tourists as the biggest global spenders, ahead of tourists from the US and Germany.

The main driver of this growth in spending is the rising demand for international travel, particularly self-organized trips to destinations in places such as Africa and the smaller European or Asian countries that are increasingly reaching out to Chinese tourists.

"Barring wild-card events, China's outbound travel market will increase by 17 percent, the same rate as has been reported for the first five months of 2013," said Wolfgang Georg Arlt, director of the China Outbound Tourism Research Institute (COTRI).

The China Outbound Tourism Index, which is produced by COTRI monthly, dropped slightly in August from a month earlier, but the performance over the last year has been higher than a year earlier.

The Germany-based institute now expects 106 million border crossings out of China throughout the second half of 2013 and the first half of 2014 and total spending abroad of $129 billion.

Even if the figures include overnight trips to Hong Kong and Macao, which would not be considered international travel, the growth has been significant.

In 2012, there were 83 million border crossings out of China as more people there took advantage of fewer restrictions on international travel and the growing purchasing power that many in China enjoy.

The rising value of the yuan compared with the dollar means that the same salaries that once made international travel prohibitive now put such trips within easy reach.

This is particularly true when traveling to countries in the developing world, such as Sri Lanka or Iran, which have emerged as popular destinations for the more adventurous young Chinese people looking to see something other than Paris or New York.

The China National Tourism Administration (CNTA) is actively promoting international travel and has already given 148 countries "approved destination status", said Shao Qiwei, the CNTA's chairman, during a meeting with UNWTO earlier this year.

This bodes well for the three main domestic airlines in China, which are facing headwinds in their search for profitability and have, so far, missed out on much of the recovery that has helped airlines in North America and Europe.