De­pre­ci­a­tion of yuan af­fect­ing travel choices

Peo­ple still head­ing out, but ex­change rates will play an out­size role in de­cid­ing where they spend hol­i­day

China Daily (Hong Kong) - - CHINA - By SU ZHOU suzhou@chi­nadaily.com.cn

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.

REUTERS

Chi­nese tourists re­ceive sou­venirs from air­port greeters dur­ing the Chi­nese Lu­nar New Year hol­i­day at Bangkok’s Su­varn­ab­humi Air­port in Thai­land in Fe­bru­ary.

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