Chinese Ban on Tour Groups to Affect Tourism Business in Southeast Asia

Chinese authorities decided to suspend from Monday, 27 January all groups travelling

Tourist wearing masks near the Dataran Merdeka. NSTP/MUHD ZAABA ZAKERIA

As the pandemic of coronavirus is gaining strength in China, Chinese authorities decided to suspend from Monday, 27 January all groups travelling. All countries in ASEAN will be affected by the decision especially if it lasts more than a month.

Although it was to be expected, the announcement on Sunday that Chinese groups would be banned from travelling domestically and internationally from Monday, 27 January, sent a worrying message to the travel industry in ASEAN countries. Over the years, the tourism community in Southeast Asia has been increasingly relying on China tourist arrivals.

According to estimations, Chinese visitors to Southeast Asia reached a record last year with close to 32 million arrivals. Thailand received the largest share of Chinese travellers in 2019 at almost 11 million, representing a third of all arrivals. Vietnam saw a jump of 17% in Chinese arrivals, is now the second most popular destination in ASEAN at 5.8 million. Singapore arrived third among ASEAN destinations for Chinese with some 3.6 million tourists recorded last year, according to first estimates.

Most countries record double-digit growth in tourist arrivals. Myanmar even saw a jump of 160% last year, the Philippines by 41% while growth turned however moderate in Thailand with total arrivals up by only 2.9%. Indonesia was the only country recorded a negative evolution with total arrivals down by 5.3% until October 2019. Indonesia is meanwhile less dependent of the Chinese outbound market has total arrivals represent only 13% of all international arrivals to the country.

In most ASEAN countries, the share of Chinese travellers hangs around 20% while it already stands at 27.6% in Thailand while being close to 33% in Vietnam and reaching a record of 39% in Cambodia.

Chinese tourist arrivals to ASEAN

While the ban affects only tour groups- they, for example, account now for 40% of all Chinese arrivals to Thailand- countries such as Cambodia and Vietnam are highly dependent on Chinese travellers.

In an interview with Malaysia daily newspaper New Straits Times, Malaysian Association of Tour and Travel Agents (Matta) president Tan Kok Liang said that “ The Wuhan coronavirus will affect the national tourism industry. Matta hopes that the situation is contained and that it will last only for a short period. Otherwise, the repercussion will be severe as it will affect the tourism industry not only in Malaysia but also globally.”

The deadly novel coronavirus (2019-nCoV) outbreak could affect Malaysia’s tourism industry with expected losses running into millions of ringgit. From January to September 2019, China was the third biggest source of foreign tourists for Malaysia with 2.41 million arrivals.

Similar losses can then be expected across Southeast Asia if the situation worsens or remains stagnant during a couple of months.