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Trump’s trade war with China hits US tourism


Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 29 August 2018 00:00


 

  • Chinese tourist bookings slump 8.4% following tariffs

 President Donald Trump’s tit-for-tat trade war with China appears to have caused a significant slump in Chinese visitors to the United States that could cost the American tourism sector dearly this year – according to the latest findings from ForwardKeys which predicts future travel patterns by analysing 17 million booking transactions a day.

Weekly bookings from China to the US were up 2% from the last week of February (after the Chinese New Year holiday) to 23 March when the first tariffs took effect. Since then, ForwardKeys’ data shows the year-on-year figure to August is down by 8.4%, falling further as new rounds of tariffs have been announced. 

The negative impact on the Chinese currency, which has fallen 7.5% against the US Dollar since tariffs were introduced – meaning tourists’ money buys less – and warnings from Beijing about US travel security risks, have likely further influenced the trend.

ForwardKeys’ data reveals that for the rest of the year, Chinese outbound bookings to the US are 9.6% behind where they were at the same time last year, whereas Chinese outbound bookings worldwide are ahead by 5.5%.

This pattern of growth worldwide but slowdown to the US is consistent in every month except October. A general setback in October is due to this year’s Mid-Autumn festival falling at the end of September, which draws departures at the start of the busy National Day Golden Week holiday into September from October.

The biggest impact has been on bookings for group travel (six or more passengers) from China to the US, currently behind for the rest of 2018 by 34.4% compared to last year. Bookings by free independent travellers (FIT) are behind 3.9%, with leisure travel being worse affected than travel for business or travel to visit friends and relatives.

By way of a benchmark, Chinese bookings for travel to Canada were up 4.8% to the end of July and are currently ahead 8.0% for August to December. Tourism is big business. The United Nations World Tourism Organisation (UNWTO) puts total spending by Chinese tourists abroad at $ 258 billion in 2017. The World Travel & Tourism Council (WTTC) reports that the value of tourism to the US from international visitors amounted to $200.7 billion in 2017, 8.6% of total exports.

ForwardKeys CEO and Co-Founder Olivier Jager said: “Our findings strongly suggest that President Trump’s trade war has had a significant impact on Chinese tourism to the US. Looking at the year to date, we see a setback in Chinese tourism arrivals of just under 5%. If that continues to the end of the year, we estimate that the cost to the US economy will be north of half a billion dollars in 2018. Chinese spending in this sector is significant – it amounts to the largest category of US services exports to China. It is unquestionable that the Chinese appetite for visiting the USA is diminishing, and that is bound to worry the US travel industry.”


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