More Chinese tourists arrive, but at a slowing pace

Even during off-season, Chinese tourists are still flocking to Chicago.

By Xuanyan Ouyang

Yuzhuo Zhang was looking at the Van Gogh’s Bedrooms exhibition at the Art Institute of Chicago. He came to the U.S. mainly for an interview at a university in Maryland and to shop for his wedding in July.

“The economy, both globally and in China, is not good now, so we tend to be more rational in terms of shopping,” said Zhang. “As far as I know, some companies in China are not doing well, and some even went bankrupt or were closed down. So I think both companies and individuals reduce their travelling to the U.S. ”

Art Institute of Chicago Museum
Art Institute of Chicago.

Zhang is one of the huge influx of Chinese tourists–more than 2 million in 2014– driving the continuing growth of tourism in the U.S. But the slowing economic growth in China and depreciation of the Chinese currency may discourage them from coming here.

Nevertheless, Aizhou Liu, a high school graduate who travelled alone to Chicago to visit colleges for future application decisions, said these factors did not impact her family’s traveling at all.

“Actually, the devaluation is not that bad, just point-something percent rise,” said Liu.

China has been the fastest-growing outbound market and spender in the global tourism industry since 2012, according to the 2015 Tourism Highlight Report by the United Nations World Tourism Organization. Chinese international travelers spent U.S. $165 billion globally in 2014, a 27 percent increase from $129 billion in 2013.

Looking at global tourism receipts, which are expenditures by international visitors including airfare on national carriers, China contributed 13 percent of the world total.

However, the second-largest economy reported in mid-January a gross domestic product growth rate of 6.9 percent in 2015, a 25-year low.

“So far, the impact has not been very big. Arrivals continue to grow, although at a slower pace,” Ron Erdmann, deputy director of research in the U.S. Department of Commerce, responded in an e-mail.

Nuno Ribeiro, a University of Illinois professor of recreation, sport and tourism, said that economic cooling has less influence on wealthier Chinese.

Most of the Chinese tourists coming to the U.S. are upper middle class who are willing to spend freely. According to the Department of Commerce, the average Chinese visitor to the U.S. in 2014 spent more than $10,800, including air fare.

“Tourism is a rather unique, economic, social and cultural activity,” Ribeiro added. “Although tourism competes for discretionary income, it is also known that tourists, once they have their spending pattern established in regard to travel, they are very unlikely to reduce their travel consumption. It is one of the paradoxes of tourism studies.”

Some Chinese Tourists are Spending Less

Wendy Zhang chose to come to Chicago mainly because she has a friend here who can show her around. She said the devaluation of the Chinese currency and the cooling Chinese economy did not affect her decision to travel to the U.S. and will not impact her consumption during the trip.

“The imported products in China are much, much more expensive,” said Wendy Zhang. “Even though the Chinese currency yuan is devalued now, things in the U.S. are still much cheaper, not to mention the fact that we can get discounts in the U.S. and I do not buy real luxuries but may spend at most a few hundred dollars at one time.”

But Yuzhuo Zhang said he is changing his consumption pattern in the U.S. to some extent, in line with Ribeiro’s analysis that Chinese tourists might spend less instead of giving up their trips.

“When you do a large amount of shopping, the less than one point increase in currency exchange has a big impact because I may spend ten to twenty thousand U.S. dollars for shopping this time,” said Yuzhuo Zhang. He added that he would prefer to shop in places like Maryland instead of in Chicago where the sales tax is one of the highest in the nation.

Jun Liu, deputy consul general at the Chinese Consulate General in Chicago, said the economic slowdown and currency devaluation in China might have less influence on the U.S. than nearby countries such as Thailand, South Korea and Japan. He said it is partly because of the efforts made by the U.S. and China in recent years.

In November 2014, President Obama announced at the Asia-Pacific Economic Cooperation summit that the U.S. and China had reached a reciprocal agreement on a 10-year visa policy for tourists and business people. The new policy allows citizens from both countries to get multiple-entry visas for up to 10 years, which is the longest visa possible under U.S. law.

According to a press release from the White House, the new visa policy will boost the number of Chinese tourists to 7.3 million by 2021, from 2.2 million in 2014, and contribute about $85 billion and create up to 440,000 U.S. jobs.

During his visit to the U.S last September, Chinese President Xi Jinping announced that the two countries agreed to make the year 2016 the “China-U.S. Tourism Year”. Experts in the tourism industry believe this will facilitate the tourism exchange between the two countries.

Chicago is Working to Gain a Bigger Share

As for the tourism industry in Chicago, China’s economic slowdown and yuan devaluation pose both opportunities and challenges.

Choose Chicago, the tourism bureau of Chicago, has set “promoting the city as a premier cultural destination” as its main strategy to “elevate Chicago to among the top five U.S. cities for inbound international travel by 2020”.

“Chicago is a typical American city, it’s different from New York. New York is international and cosmopolitan, but Chicago has authentic American culture and people are nice,” said Liu, of the Chinese Consulate. “My friends who visited Chicago are impressed by the beauty, the landscaping and architecture of Chicago and they often want to come back.”

The City of Chicago has officially embraced the Chinese New Year and enhanced the annual celebration with various events and cultural exchange.  This year the third such joint observance kicked off with Jackie Chan’s Long Yun Kung Fu Troupe performance on Feb. 8, followed by Art Institute tours in Mandarin, and other events at the Chicago History Museum and the Chicago Botanic Garden–all at least partly intended to attract more Chinese tourists.

Jackie Chan’s Long Yun Kung Fu Troupe performance in Chicago on Feb. 8.
Jackie Chan’s Long Yun Kung Fu Troupe performance in Chicago on Feb. 8. (Photo courtesy of The Chinese Fine Arts Society)

Despite these efforts, Chicago is not on the list of  top international destinations for Chinese tourists. Even domestically it is in a weaker position in competition with West Coast and East Coast cities.

The average number of states that Chinese travellers visited was 1.7 and 1.8 respectively in 2013 and 2014, according to the U.S. Department of Commerce statistics. That survey also shows that California comprised 46.1 percent of the market in 2013, and 46.2 percent in 2014. New York had 32.5 percent of the market in 2013, while no data is provided for 2014.

Reflections from many Chinese travellers to Chicago, including even Liu who likes it here,  suggest that Chicago’s tourism still has a long way to go. They pointed out that Chicago’s attractiveness is undermined by Chicago’s long winter season, a lack of name recognition, an insufficiency of advertising in China, and few Chinese signs in public spaces and tourist attractions.

Photo at top: Even during the off-season, Chinese tourists are still flocking to Chicago’s attractions like the Cloud Gate sculpture in Millennium Park. (Xuanyan Ouyang/MEDILL)