Diplomatic standoff between USA and China: Reputations tarnished, causing tourism decline - Damaged Reputations and Struggling Tourism Industries in U.S. and China
Headline: The Decline in Chinese Tourism: The Impact of COVID-19 and Geopolitical Tensions
In the realm of global travel, the fallout from recent world events has dealt a heavier blow to China than to the US. Major German airports, Frankfurt and Munich, have registered a rise in American-bound travelers since President Trump assumed office, while seeing a decrease in traffic to China. In terms of worldwide tourist arrivals, the US surpassed China in 2019.
Industry Braces for Trump-induced US Tourism Slump
Munich Airport reported a substantial increase in passengers traveling to the US, totalling nearly 1.2 million from January to May. A growth of around 37,000 passengers compared to the previous year is remarkable. In Frankfurt, there was a similar increase of 7,600 passengers to 944,300 on US-bound flights in the first four months, not including May. However, these figures are yet to reveal a significant Trump effect. What's noteworthy is that these numbers encompass both outbound and inbound travelers.
The travel industry prospects a negative impact on US tourism during Trump's second term. According to the World Tourism Organization based in London, along with consulting firm Oxford Economics, the US is estimated to experience a staggering loss of over twelve billion dollars in 2022 owing to the absence of foreign visitors. Der Spiegel dedicated its latest cover story to this crisis in travel, instigated by Trump.
A Challenging Climb for Chinese Tourism
Contrastingly, passenger numbers on flights to and from Munich and Frankfurt have decreased this year. In Munich, this decline amounted to 1,300 passengers in the first five months. Frankfurt saw a reduction of 27,000 passengers with China-bound flights in the first four months of the year. This trend is also visible in a comparison of numbers from 2019 and 2022: A continuous decline in Chinese air traffic, with higher numbers in US travel.
"China's accessibility has changed significantly," says Dennis Utzerath, tourism expert at the international consulting firm BCG in Cologne. Flights offerings during the pandemic were significantly reduced, and the Ukraine war in 2022 made it challenging for European airlines to compete with their Chinese counterparts due to costly detours around Russian airspace. Several airline companies, including Lufthansa and British Airways, have temporarily suspended flights to China.
Tour operators detect renewed interest in China
Holger Baldus, security manager at Munich-based tour operator Studiosus, shares a surprising perspective. He suggests that the low passenger numbers from Germany to China should not necessarily be interpreted as a lack of tourist demand for China, owing to the changes in airline routes. Instead, the manager sees a resurgence of Chinese tourism from Germany, Austria, and Switzerland, although it is still limited due to the scarcity of available seats.
Even the largest German tour operator, TUI, reports a growing interest in China - albeit from a modest starting point. The company is optimistic about the future of Chinese tourism.
China's International Appeal Wanes Post-Pandemic
Since the COVID-19 pandemic, China's international appeal has experienced a remarkable decline. In 2019, China welcomed nearly 96.6 million foreign visitors, but that number fell to approximately 64.9 million in 2022 - a decrease of about a third. Conversely, travel to the US has rebounded stronger: The US hosted 79.3 million visitors in 2019, which dipped to 72.3 million in 2022 - more than in China.
China's image in the Western world has suffered for numerous reasons, including state surveillance, harsh COVID-19 lockdowns, environmental pollution, and war threats against Taiwan, making it hard to quantify the exact impact on tourist willingness.
Tourism Feeds on Positive Perceptions
Tourism thrives on "positive images in the mind," notes Utzerath, a business consultant. Negative news leaves a lasting impression, but it's not about writing off a country, rather about the drying up of beautiful experiences, travel stories, and positive associations that drive the interest of potential visitors.
The same volatility applies to the US, with no immediate enthusiasm for travel there due to ongoing negative news. However, the favorable exchange rate between the euro and the dollar may encourage tourism.
A Recovery Strategy for China
Different from the US, the Chinese government is actively working to attract more visitors. Beijing has streamlined its visa policy, making it easier for Germans and citizens of other European countries to travel to China for business or tourism, with a 30-day visa-free entry scheme. China has also made it simpler to access its digital payment system, with translated apps and acceptance of foreign credit cards. In the first quarter of 2022, authorities reported an increase of more than a third in foreign arrivals compared to the same period the previous year.
China hopes that tourism will stimulate domestic economic recovery, addressing weak demand and dampened consumer sentiment. With offerings like special train journeys catering to senior citizens, Beijing is fostering increased consumer expenditure among the elderly population.
- The decrease in Chinese tourism has led industries to scrutinize the country's employment policy, as a potential reduction in foreign visitors could negatively impact local employment within the tourism sector.
- As finance plays a crucial role in the travel industry, the estimated loss of over twelve billion dollars in 2022 due to the absence of foreign visitors in the US could necessitate a reevaluation of employment policy in light of potential financial challenges.
- Amidst the decline in Chinese tourism, the US has surpassed China as a global travel destination, signifying a shift in lifestyle and preferences that could have broader implications for employment policy within the tourism industry.
