The US travel industry faces a long wait for Chinese tourism to reach its 2019 peak | 104.1 WIKY

By Aishwarya Jain

(Reuters) – The U.S. travel sector will have to wait at least two more years for lucrative Chinese tourism to recover to pre-pandemic levels, as slow growth and high costs in the Asian country keep its tourists away from America.

The slower-than-expected recovery in Chinese travel could further depress profits for U.S. hotel operators as they struggle to normalize domestic travel due to persistent inflation.

“There was an expectation that as COVID restrictions eased, US-China travel, especially tourist travel, would show strong demand growth and at least a return to pre-COVID levels. There has been no such recovery,” said Ryan Yonk, senior research faculty at the American Institute for Economic Research.

China started gradually lifting travel-related restrictions from January 2023 and fully lifted restrictions on group travel in August last year, but the resulting increase in Chinese arrivals to almost 1.1 million remains 60% below 2019 levels , according to data from U.S. National Travel and Tourism. Office (NTTO).

That’s largely because Chinese tourists are still struggling with an uncertain economy, prioritizing savings and turning to domestic travel or visiting nearby countries to save money.

The Asian American Hotel Owners Association (AAHOA), which represents about 20,000 U.S. hoteliers, says the decline in Chinese tourism has reduced revenue and profitability.

“This, in turn, has led to job losses and financial strain on workers and related workers whose livelihoods depend on international tourism,” the AAHOA said in a statement to Reuters.

Chinese tourists in the US spent as much as $15 billion in 2019, more than any other market, the US travel company said.

International Trade Administration (ITA) data for 2023 shows that Chinese tourist spending, which averages $4,137 per visitor, is 123.6% higher than the average foreign tourist spending of $1,850 per visitor.

Tourists from China also spend about 30% of the total travel budget on accommodation and lodging, ITA data shows.

The U.S. economy is expected to gain $30 billion and 50,000 jobs if China returns to 2019 tourism levels, Commerce Secretary Gina Raimondo said last year.

Analysts have also said rising geopolitical tensions and the high cost of flying between the US and China are weighing on travel, as the number of flights between the two countries remains below pre-pandemic levels.

“The generally negative political climate between the U.S. and China is not helping tourism between the two countries,” said Patrick Scholes, an analyst at Truist Securities.

Nearby countries in Southeast Asia have encouraged Chinese visitors by lifting visa requirements.

Chinese arrivals in Thailand and Singapore rose 1,187.1% and 942.2% in 2023, remaining below pre-pandemic levels but far higher than a 192.9% increase in the US

Although Chinese outbound tourism to the US is expected to grow in 2024, it is not expected to exceed pre-pandemic levels until 2026, the NTTO said.

According to a report by Economist Intelligence, the total number of Chinese outbound travelers will remain below pre-pandemic levels until 2025.

(Reporting by Aishwarya Jain in Bengaluru; Editing by Devika Syamnath)