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China inbound tourism on road to recovery

Inbound tourism from China slumped last year, while businesses in the sector today slowly get back on their feet

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Chinese tourist arrivals to Singapore appear to be bottoming out, according to anecdotal accounts of travel operators and hospitality players, with some businesses saying they are on the mend while others are hoping that upcoming campaigns will help them recover.

Singapore

CHINESE tourist arrivals to Singapore appear to be bottoming out, according to anecdotal accounts of travel operators and hospitality players, with some businesses saying they are on the mend while others are hoping that upcoming campaigns will help them recover.

Bestlink Travel Pte Ltd, an agency dealing with Chinese inbound tourists, saw a 40 per cent drop in numbers of Chinese visitors for the second half of 2014, but managed to see business pick up by about 20 per cent for the first half of 2015.

Hotels too, bore the brunt of last year's decline, but have been showing signs of improvement in the first half of this year.

Royal Plaza on Scotts, for example, has seen a steady increase in China travellers since 2011, from 3 per cent to 6 per cent in 2014, and the peak periods of the Lunar New Year and China Golden Week were strong. However, "the number has dipped 20 per cent in the second half of 2014 as compared to the first half", noted Patrick Fiat, general manager of Royal Plaza on Scotts.

"Based on the current bookings for this year, the arrivals from China remain flat, meaning our China arrivals have stabilised since the later part of last year with no increase or decline," added Mr Fiat.

Last year, Singapore's inbound tourism from China took a major hit, and several hotels and travel agencies saw a slump in visitor arrivals. For 2015, Singapore has focused, once again, on strengthening Chinese visitor numbers and marketing efforts to accelerate recovery are well under way.

The decline last year was attributed to several circumstances in Southeast Asia, including the Tourism Law of China in October 2013, the MH370 plane incident and anti-Chinese demonstrations in Vietnam. Given that holiday tours to Singapore are frequently grouped with other Southeast Asian countries, these incidents hit Singapore's inbound tourist numbers from China.

Compared to the previous year, numbers of Chinese visitors in April, May, June and July of 2014 plummeted by 44.5 per cent, 51.6 per cent, 45.2 per cent and 27.3 per cent respectively. For the whole of last year, tourist arrivals from China fell 24.1 per cent to 1.72 million.

The first half of this year showed signs of recovery, with a total of 663,078 visitors from January to April, though the number was still weak compared to the same time period in 2014 and 2013, which had 683,986 and 875,725 visitors respectively.

As always, however, visitor numbers in month of February stood out. Chinese New Year is a peak time for incoming Chinese travellers, and this year's visitor number stood strong at 238,008, compared to 203,600 in February 2014. In March, however, the number fell to 130,811 this year, from 165,642 in the same month last year, according to latest data from Singapore Tourism Board (STB), and rebounded again to 153,712 in April, from 126,507 a year ago. Official data for May is not yet available.

As China is Singapore's second largest country market for tourism, after Indonesia, travel agencies dealing predominantly with Chinese inbound tourists felt the impact of the fall in visitor arrivals from China most significantly.

While the decline in Chinese inbound tourism hit a significant part of the industry, business for some stayed afoot.

Chan Brothers, one of the leading travel agencies in the region, did not face major repercussions on its inbound business so far, of which the majority comprised MICE (meetings, incentives, conferences and exhibitions) travel.

"Fifteen months later, year-on-year inbound travel demand has remained constant," said Rebecca Chia, spokeswoman for Chan Brothers.

Businesses that remained less affected also showed a large audience reach overall which contributed to stability. The Pan Pacific Hotels Group is one such example.

"Tactical marketing promotions that capitalise on peak Chinese travel periods, flash sales as well as strategic advertising and tie-ups with Chinese online booking platforms and travel agents, have helped to buffer our hotels against the market decline," said Timur Senturk, vice-president, operations, Asean, Pan Pacific Hotels Group.

Singapore has recently been channelling efforts in order to initiate a rebound in the Chinese inbound tourism industry. In May 2015, the STB announced that new visa measures would extend the validity of Multiple Journey Visas (MJVs) issued to nationals from the People's Republic of China (PRC) for up to a maximum of 10 years.

This new policy, along with marketing campaigns run by the STB and the Changi Airport Group (CAG), aim to accelerate the growth of Chinese visitors to Singapore.

"Earlier this year, CAG has announced the $35 million two-year tie-up with STB to boost awareness of and visitorship to Changi Airport and Singapore, with some resources focused on key markets such as China," said Ivan Tan, spokesman for Changi Airport Group.

"Some initiatives, such as the Pan-China travel campaign jointly organised by STB, CAG, Lex Travel and several Chinese travel agents, have been on-going since last year to entice Chinese travellers to choose Singapore for their holidays."

"In view of the recent visa arrival policy changes for Chinese tourists and the S$20 million STB global marketing campaign, we are excited to see an even further increase to the tourism industry especially from inbound Chinese tourists," said Richard Ong, general manager of Orchard Hotel Singapore.

Travel agencies have also noted that many of the CAG road shows conducted in China for second and third- tier cities have helped in promoting Singapore as a tourist destination.

Moreover, travel agencies and hotels have been promoting Singapore as "mono-destination" spot, through which tours to Singapore are promoted without Malaysia or Thailand as additional destinations.

Sheraton Towers noted this, with an increase in the length of stay for Chinese travellers as many shifted their travel plans from Malaysia to spend more days in Singapore.

For those who have yet to recover, optimism remains solid. With the region regaining stability and marketing campaigns thriving, the industry players are showing confidence in the market's recovery.

"The recent changes in visa regulations and improved marketing will definitely assist (growth)," said Robert McIntosh, executive director, CBRE Hotels, Asia Pacific.

"It is too early to quantify the impact of these two initiatives but if the (Chinese visitor) arrival numbers could be brought back to 2013 levels, we estimate that it would lift the occupancy of hotels by between 2 and 4 percentage points."

In addition to the various marketing campaigns to drive up inbound tourism, Singapore's credibility remains high.

"Singapore is seen as the crown jewel in the region with its excellent tourism infrastructure with efficient transport network, comprehensive business facilities and varied options in terms of accommodation," added Chan Brothers' Ms Chia.

Industry players will be watching the arrivals during the summer school holiday period as it is a popular travel window among well-off mainland Chinese families.

"July and August will be the next big season to look out for, because it's the summer holiday period for the China market, and they will determine how the year will go," said Dominic Ong, managing director of travel agency Singapore Alive.