Signs of Recovery in Chinese Tourism to South Africa

There are signs that Chinese tourism to South Africa is picking up again after a disastrous year that saw a 26.1% drop in arrivals from mainland China and Hong Kong between January and August 2015.

The two main reasons for the drop are the SA government’s stricter visa requirements – which meant Chinese visitors had to supply biometric data in person in the country of origin when applying for a visa to visit SA – and the slowing global economy.

Yet, all this seems to be changing as travel agencies report a sharp uptick in bookings from China between the Festive Season and the Chinese New Year, in February 2016. This is traditionally the peak season for Chinese outbound travel.

One factor that has boosted the number of Chinese visitors is UnionPay International’s promotion of Cape Town as one of the “40 selected travel destinations worldwide” to its massive, largely Asia-based cardholders. UnionPay is a fast-growing international bankcard association with more than 5 billion cards in circulation, which are accepted in more than 150 countries and regions, and issued in over 40 countries and regions. Besides unremittingly expanding the scope of card-usage, UnionPay International is also dedicated to enriching its global system of card-using offers and privileges. Each year, UnionPay international launches a series of preferential programs. This year, it has partnered with several hotel groups and airlines as well as traditional merchants, offering cardholders a variety of benefits, including discounts of up to 15% at over 300 merchants worldwide.

At present, UnionPay has presence in 44 African countries, delivering secure and convenient payment services to its cardholders who work in or travel to these countries. In South Africa, 50% of all ATMs accept UnionPay cards, and merchants accepting UnionPay cards cover airports, hotels, attractions, and shops most visited by tourists. The exclusive offers jointly provided by UnionPay International and the local merchants will attract more tourists.

Louis Wang, a travel agency with Nexus Holidays, says several other reasons may also account for the increase in bookings from China: “First of all, the exchange rate is favourable for Chinese visitors to South Africa, and we now have a direct flight between Beijing and Johannesburg.

“Secondly, the South Africa government will allow Chinese passport holders to enter SA without visa permits from early next year.

“Thirdly, South Africa-China relations are in the best shape ever.”

Nancy Yin of New Africa Travel says SA is attracting more visitors due to the weak rand, which makes it affordable to visit. However, the stricter visa requirements did substantial damage to SA’s image in China. “Remember, Chinese people can get a visa to go to many other countries – if you make it too difficult for them to travel to SA, they will go elsewhere.”

The recent visit to SA by Chinese President Xi Jinping, during which he met more than 40 African leaders and dignitaries, highlighted the need to promote smoother travel and business flows between Africa and China.

Li Zhixian, General Manager of UnionPay International Africa, says the Xi’s recent visit to SA, allied with the loosening of visa restrictions, will help boost Chinese outbound tourism to SA. “We were delighted to have Cape Town as one of the selected 40 international destinations promoted this year, and there are clear signs that the number of travellers is now picking up as we approach the yearend. We expect to see this trend continue into 2016, particularly as we approach the Chinese New Year in February, by which time the new system of capturing biometric data at SA ports of entry should be in full swing.

“With 5 billion cards in circulation, UnionPay has considerable pulling power and we expect the campaign to have a positive effect on China-SA tourism stats,” says Zhixian.

A recent study by InterContinental Hotels (ICH) and Oxford University found that SA ranks as one of the top countries in the world where Chinese travellers make the most spending. The number of Chinese travellers to SA grew 122% to 151 000 over the three years to 2013. The ICH study suggests Chinese visitors to SA will spend US$1.5 billion (R19.6 billion) by 2017, and possibly US$1.8 billion (R23.6 billion) if travel policies between the two countries improve.

The Annual Report of China Outbound Tourism Development (2015) issued by China Tourism Academy also shows that Africa is the fastest-growing outbound traveling market to Chinese residents, with a year-on-year growth of 80.9% in 2014. South Africa, together with Egypt, Mauritius, Kenya, and the Seychelles are the five most popular destinations among Chinese tourists in Africa.

According to The Consumption Trend of Chinese Outbound Tourists (2015), a report issued by UnionPay International, China Tourism Academy expects that the consumer spending of Chinese outbound tourists in 2015 will reach 1,1 trillion yuan and will continue to increase stably in the future. Shopping still accounts for the largest part of Chinese tourists’ spending abroad, followed by accommodation and transportation. The proportions took by entertainment, catering and attractions tickets spending are also increasing year by year.

The report shows that daily necessities are gradually taking the place of luxury goods to be the goods most purchased by Chinese outbound tourists, while spending in the local leisure and entertainment programs keeps increasing. The transaction volume of UnionPay cards at department stores and supermarkets has increased remarkably. Meanwhile, Chinese tourists’ average spending for a single meal abroad declines, and local food specialties are favoured by Chinese tourists. With regard to accommodation, tourists’ selection of top-end hotels and economical chain hotels bears obvious polarization.

The report introduces other new trends in Chinese people’s outbound traveling: larger scale, higher frequency, and more diversified destinations. Additionally, in markets where UnionPay cards are issued in large scale, such as Hong Kong, South Korea, and Japan, the local people also use UnionPay cards frequently in their travels to enjoy exclusive offers and privileges.