Chinese tourism in the United States dropped off for the first time in 15 years, stoking concerns that ongoing trade frictions with China are starting to squeeze out this $36.4 billion market.
Arizona also saw its first drop in many years, said Scott Dunn, director of communications for the Arizona Office of Tourism.
“After about eight years of steady growth, it actually dropped for the first time but it dropped less than the national average so we’re not suffering as much as other states,” said Dunn, whose office markets actively to Chinese tourists.
Double-digit growth fizzles
After years of double-digit growth, Chinese tourism numbers dropped 5.7 percent in the U.S. last year, according to U.S. Department of Commerce data. Visitor numbers dropped to 2.9 million from 3.2 million in 2017.
Arizona also experienced strong growth over the past decade with China its fastest-growing international market. From 2010 to 2017, the number of Chinese visitors to Arizona grew 28 percent, Dunn said. In 2017, they spent an estimated $236.7 million, making it Arizona’s No. 1 overseas market for spending.
Arizona is still crunching the numbers for 2018 but it was a record-breaking year for tourism overall, Dunn said. Chinese tourists, however, declined by an estimated 3.7 percent.
Chinese tourists bigger spenders
Many countries compete for Chinese tourists because they are bigger spenders, said Tori Barnes, executive vice president for public affairs and policy at the U.S. Travel Association. Chinese tourists stay an average of 18 days and spend an average of $6,700 per trip, about 50 percent more than other international tourists.
Barnes and other tourism officials fear the year-long tariff battle is contributing to the decline in numbers. Commerce Department data shows the trend is continuing in 2019.
A report from Bank of America Merrill Lynch last September shows a “worst case” scenario, predicting visitors from China could drop 50 percent if trade frictions persist.
Trade battle weighing on travelers
For more than a year, the two superpower leaders, President Donald Trump and President Xi Jinping, have been in negotiations over trade and espionage. Trump has placed 25 percent tariffs on $250 billion worth of Chinese goods trying to force concessions. Xi has retaliated in kind.
Trump wants more protections for American intellectual property and a guarantee that China will end predatory practices including cybertheft and forced transfers of technology from American companies doing business in China.
In the latest development, Trump and Xi met at the G20 Summit in Osaka, Japan, and brokered a truce. Both agreed to hold off on new trade taxes while they continue to broker a trade deal.
Both countries issue travel warnings
China has issued travel warnings, discouraging Chinese citizens from traveling to the U.S.
Last month, China’s Ministry of Culture and Tourism issued an advisory stating that Chinese citizens have been interrogated, interviewed and subjected to other harassment from American law enforcement. Other advisories warn Chinese citizens of shootings, burglaries and high crime in America.
Earlier this year, the U.S. issued its own travel warning, stating that Chinese authorities have prohibited U.S. citizens from leaving China by using ‘exit bans,’ sometimes keeping U.S. citizens in China for years.
Chilling effect on travel, economies
Such reports can have a “chilling effect” on tourism, stated Roger Dow, president and chief executive of the U.S. Travel Association.
“This is something we have seen regularly from the Chinese government, about every six months or so. This move would appear connected to the U.S.-China trade dispute,” Dow said in a prepared statement in response to China’s latest travel warning.
“As we have before, we continue to urge both governments not to politicize travel for the reasons I have stated often: travel is incredibly valuable for both countries in terms of direct commercial activity and business relationships that have a broad downstream economic impact.”