Latest News
HomeAsia-PacificChinese currency’s appreciation boosts outbound travel
Asia Tourism Relations

Chinese currency’s appreciation boosts outbound travel

More Chinese tourists are expected to travel to overseas destinations with the appreciation of the Chinese currency yuan against the US dollar, industry insiders recently told Asia Tourism Relations (ATR), one of the leading tourism and travel consultancies in China. Glen Hingley, Managing Director of Asia Tourism Relations, said, ”In the past years, China’s outbound travel keeps a strong momentum and the further appreciation of the…

More Chinese tourists are expected to travel to overseas destinations with the appreciation of the Chinese currency yuan against the US dollar, industry insiders recently told Asia Tourism Relations (ATR), one of the leading tourism and travel consultancies in China.

Glen Hingley, Managing Director of Asia Tourism Relations, said, ”In the past years, China’s outbound travel keeps a strong momentum and the further appreciation of the Chinese currency against the US dollar serves as a catalyst for the demand for outbound travel and overseas shopping.”

The central parity rate of the yuan breached the psychological mark of 7 against the US dollar earlier on April 10 and keeps standing around 6.98 for over one month. For Chinese travelers, it means stronger purchasing power in the United States and other countries and regions that use US dollars or peg their currencies to it.

Since Chinese tour groups are as yet unable to organize trips to the US, it is destinations such as Hong Kong, with its currency pegged to the US dollar, that attract tourists from the Chinese mainland.

From 1994 to mid 2005 the exchange rate between US dollar and yuan remained stable, ranging from 8.7 to 8.3. However on May 15, 2006, the rate of yuan breached the mark of 8 against the US dollar. In less than one year, the central parity rate of the yuan breached the mark of 7 once again against the US dollar.

Analysts attributed the continuous rise to a weakening U.S. dollar. They forecast that the Chinese currency would appreciate at least 7-10 percent against the U.S. dollar during 2008. The yuan, however, has not appreciated much against the Euro or the Australian dollar.

Favorite overseas destinations for Chinese mainlanders include Hong Kong, Macao, Japan, Korea and some Southeast Asian countries. At present, HK$100 can be exchanged for 89 yuan, down from nearly 100 yuan last January.

As a result more Chinese people have called local travel agencies to inquire about Hong Kong tour packages. The number of customers who purchased Hong Kong tour products from online travel products booking company Ctrip has increased by 70 per cent year on year.

With the appreciation of the Chinese currency, some foreign tourists might still drop their plans to visit China. “Chinese domestic travel services must work harder to create better itineraries and strengthen the promotion of their products to maintain growth in the inbound market, in order to offset the negative influence of the appreciation on the inbound tourism market,” Glen Hingley said.

China is now Asia’s largest outbound tourist source nation, having outranked Japan, the previous leader in the Asia-Pacific region. In 2007, there were over 40 million Chinese tourists traveling abroad. World Tourism Organization predicted it is set to reach a staggering 100 million per year by 2020.

China’s economic boom has provided the Chinese with higher disposable income, while better diplomatic relations and relaxed travel regulations have given the Chinese more opportunity to travel to many overseas destinations.

With 134 countries and regions now granted the Approved Destination Status (a bilateral tourism agreement between the Chinese government and foreign destinations permitting to receive Chinese tourists traveling on leisure) China is continuing working to extend the status to other countries.

19/07/2024
18/07/2024
17/07/2024
16/07/2024
15/07/2024