The Yuan has weakened significantly against the dollar this year – much to the relief of the Chinese leadership. But Chinese holidaymakers are faced with tough decisions on how to make their Yuan go further. Their changing priorities will definitely affect the travel and tourism industry.
Chinese people still very much want to travel abroad. A Shanghai-based travel agency said recently that during the upcoming Chinese Spring Festival (the Chinese New Year), 6 million Chinese tourists would take a trip to overseas countries. Chinese tourists as a whole spend the equivalent of $14.37 billion overseas – a staggering amount of money.
But this year, with exchange rates not as favourable as they have been, Chinese travellers need to take a close look at their holiday plans. Some lucky holidaymakers have already booked on prepaid trips which were priced before the major depreciation of the currency. However those who are thinking of nipping overseas for a quick shopping trip will need to take a cool look at how the numbers stack up.
Chinese travellers love the Maldives, Thailand and United States. These three destinations have seen price increases of between 3 to 15%. In the case of the US, a trip that would have cost 10,000 yuan is now going to be between 300 and 500 yuan more. This increase is not in itself enough to stop people travelling. And in addition, many other destinations have become cheaper for Chinese travellers.
These include Turkey, Italy, Singapore and South Korea. Some of the price drops for these holidays have been as big as 30%.
Like most people, Chinese travellers are deterred by uncertainty about the costs of their overseas trip and currency fluctuations may make them think twice. In particular, the recent announcements by the US Federal Reserve that interest rates would rise more quickly, made the yuan fall to its lowest level against the dollar in eight years.
Because Chinese tourists love to shop when they go abroad, rather than simply lie on a beach, their travel plans are quite sensitive to decreases in the purchasing power of the yuan. This also gives some idea of how valuable they are to the host countries, in terms of their high level of spending while they are in the country.
But this year, some travel agents in China are reporting that they’re seeing Chinese families choosing their holiday destinations based on favourable exchange rates.
Bild: bigstockphoto.com / michaelpuche