Welcome to the last edition of COTRI Weekly in the year 2018. Last week we looked back at the year 2018, in this edition we will give a forecast for 2019 based on COTRI ANALYTICS data.
Almost half of all border crossings from Mainland China are ending already in Hong Kong and Macau SARs. The territories managed to come back after two weak years with a YoY growth rate of 13% in 2018. With the new bridge connecting Hong Kong, Macau and Zhuhai and the new High-Speed train line bringing Hong Kong and Guangzhou and the rest of China much closer together in terms of time and convenience of travel, the much-talked about “Bay project” is likely to create additional travel for the two SARs. Even with a conservative forecast of again 13% YoY growth, that would add ten million trips to a new total of 85 million in 2019. A tourism policy by the Chinese government which will support the cities and counties in Taiwan which voted for the opposition during the recent elections should help to bring back Mainland arrivals to a level of more than three million in the coming year. Greater China therefore can be forecasted to receive altogether 88 million Mainland Chinese visitors.
For those travelling further the forecast for 2019 is much more laden with uncertainties. The world is facing the curious situation that almost all leaders of the most important countries cannot be sure to stay in office until the end of their term, being it in the USA, UK, Germany, France or China.
The continuous decrease of China’s GDP, made more serious by the possible rising barriers to exports to the USA, the internal resistance against the demise of collective leadership and the external growing disenchantment with the Belt and Road Initiative, will make 2019 a difficult year for President Xi Jinping. The same line of reasoning however can also be used to argue that in such a situation the Chinese government will not see it as expedient to anger the upper and upper-middle class of the country by restricting the flow of hard currency out of China via outbound tourism. On the opposite, the establishment of the Ministry of Culture and Tourism as a tool to “enhance the country’s soft power and cultural influence” earlier this year has shown the growing attention tourism is enjoying.
The appetite of the Chinese for outbound travel is certainly not getting smaller, with huge numbers of aspiring middle-class members in lower tier cities still waiting for their first trip to Greater China or beyond and the affluent members of the Millennials and the Generation Z considering international travel already as a normal integral part of their lifestyle. As these trips are paid from the wealth and not from the income of the travellers, if not by government or company, the slowing down economy will not result in dramatically decreasing numbers of outbound travellers.
Even terrorism and other scares have not stopped the Chinese from travelling abroad, it only has changed in some cases the destinations preferred. Especially the more experienced travellers are developing their preferences and go beyond the must-see places to enjoy the diversity of the planet in countries like Serbia and Nepal and to live out their special interests in food, health, education, nostalgia and still, if less so, shopping.
Therefore, after 11% YoY increase in 2018, the Chinese trips to destinations around the world, as always notwithstanding Black Swan events, can be forecasted to continue to grow quite similar to the second half of 2018 at 9.5% YoY in 2019, resulting in a total number of trips beyond Greater China of 92 million.
Putting together the data for Greater China and the Rest of the World, COTRI forecast for 2019 is an increase by 11% YoY from 162 to 180 million border crossings from Mainland China, with 49% of all trips ending in Greater China and 51% terminating in destinations beyond.
Let us finish the editorial for the last issue of COTRI Weekly for 2018 with heartfelt wishes from the whole COTRI staff for a peaceful, enjoyable, and profitable year 2019 for you, your loved ones and the world.
Prof. Dr. Arlt and the COTRI Weekly team