Depreciation of yuan affecting travel choices
People still heading out, but exchange rates will play an outsize role in deciding where they spend holiday
Recent depreciation of the yuan has not dampened Chinese tourists’ enthusiasm for outbound trips, but it has affected where they are going and what they are doing abroad, industry insiders said.
Ctrip, one of China’s leading online Shanghai-based travel agencies, said on Saturday that a record 6 million trips would be made by Chinese tourists to overseas countries during the coming Spring Festival holiday. Total outbound consumption is expected to surpass 100 billion yuan ($14.37 billion).
Wang Zhenyue, deputy director of UTour International Travel Service Co’s directmarketing center, didn’t provide specific numbers but said the company expects to see 15 to 20 percent growth in terms of tourist numbers during the Golden Week.
“Yuan depreciation will not have a direct impact on the Spring Festival travel market, because the cost of about 70 percent of outbound trips were priced months in advance,” he said. “However, self-planning travelers and shopping lovers might want to think twice before making any plans.”
According to China Youth Travel Service, popular over- seas destinations including Thailand, the United States and the Maldives have seen a 3 to 15 percent price increase.
“It means a 10,000 yuan trip to the US would cost 300 to 500 yuan more, which is not a big enough difference to change people’s minds,” said Xu Xiaolei, spokesman of CTYS. “In addition, overseas destinations such as South Korea, Singapore, Italy and Turkey have seen a 10 to 30 percent price drop.”
Since 2012, China has become the world’s leader in international tourism consumption and outbound tourism. However, uncertainties such as fluctuating currency exchange rates are influencing outbound tourists’ decisionmaking.
On Dec 15, the yuan fell to its weakest level in eight years after the US Federal Reserve signaled a faster pace of rate hikes. Many people have concerns that it will affect the travel industry because Chinese outbound tourists are cost-sensitive and love shopping.
Xu said the changing currency exchange rates would significantly affect where tourists want to go and what they do abroad.
“Many tourists have no plans or preference when they consult with us,” Xu said. “They simply want to get a deal that is reasonably priced. Travel to destinations with favorable currency exchange rates has become a phenomenon.”
“Shopping would certainly be curtailed in countries such as the United States.”
Yang Wenli, 30, manager of a music hall in Wuhan, Hubei province, said she is still considering where to go with her family.
“Traveling abroad is still a big decision in terms of consumption for my family. We only go abroad once a year, so we want to make it enjoyable as well as economical,” Yang said.