Is Asian Tourism Too Dependent on China?
Image Credit: Wikimedia Commons

Is Asian Tourism Too Dependent on China?


Last Friday, MasterCard released the 2015 version of its Global Destination Cities Index which tracks the most visited cities around the world.

Unsurprisingly, Asia does remarkably well when it comes to the number of international visitors. If we look at just the 2015 projected numbers, eight of the twenty top cities are based in Asia – Bangkok, Singapore, Kuala Lumpur, Seoul, Hong Kong, Tokyo, Taipei, and Shanghai. Looking across the past few years, four of the five fastest-growing cities in the world over the 2009-2015 period are located in Asia – Taipei, Tokyo, Bangkok and Seoul – with all of them still expanding by double-digits annually (the lone non-Asian city here was Istanbul).

But the report suggests that these impressive aggregate numbers may hide other worries. Mainly, while Asian countries attract a lot of tourists and help raise government revenues in a weak global economy, the makeup of these visitors tends to be significantly less diverse than non-Asian cities. This matters, the report argues, because on balance, cities that get tourists from fewer destinations are more vulnerable to shifts from one country or another.

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The findings suggest that several Asian cities have less diversification, and, in turn, lower resilience. The report measures resilience by the number of feeder cities accounting for half of international visitors. Bangkok, which ranked 2nd globally in terms of aggregate international visitors, ranks a mere 7th in resilience, with just seven feeder cities. Singapore, which placed 7th internationally, ranked 10th in resilience with 11 feeder cities.

The lackluster performance by Asian cities on the resilience index is more striking when contrasted with other highly-ranked European and Middle Eastern cities.  Most notably, Istanbul, which ranked 5th in international visitors, topped the resilience rankings with a whopping 33 feeder cities, nearly five times that of Bangkok and thrice that of Singapore. London, which was the top destination for tourists, ranked just below Istanbul on the resilience index with 26 feeder cities. Indeed, the other top countries on the resilience index are all countries in the Middle East or the West – Paris, Amsterdam, Dubai, New York in that order – until one gets to Bangkok, the highest ranked Asian city at 7th place where it is tied with Rome.

What accounts for the lack of diversification in Asian cities? A big part of it, the findings suggest, is a large dependence on China. Last year, China alone accounted for more than 13 percent of all visitors to the Asia-Pacific – the highest proportion among all foreign travelers and more than double the recorded figure of 6 percent five years ago. This is in marked contrast to China’s composition of tourists in some other leading European and Middle Eastern cities. In London, for example, Chinese tourists accounted for just 0.6 percent of all international visitors.

MasterCard chief economist Yuwa Hedrick-Wong told Reuters that the high dependency of Asian cities on Chinese tourists was unhealthy.

“As a source of tourists, China looms large and a lot of Asian cities have benefited hugely. But they have grown to be very dependent on these tourists, and one must be cautious not to go down one path too far. You must diversify,” he said. The report itself ends by noting that the challenge for otherwise very successful destination cities is “to diversify their sources of visitors while maintaining their robust rates of growth.”

The perils of overdependence on China are clear. Beyond the general risk of putting all your eggs in one basket, the influx of Chinese tourists in particular have brought their own problems for several Asian countries (See, for instance: “Thailand Tells Chinese Tourists How To Behave”).

Achieving this, however, could prove challenging. While countries can take active steps towards diversification – such as widening their range of attractions to appeal to a broader audience – there are limits to what they can do. China’s dominant role in Asia’s tourism industry is a product not only of government policy, but other structural factors such as Beijing’s large population and its proximity to other Asian nations. Visiting neighboring Asian countries is a cheaper and thus more accessible option for a greater portion of the Chinese population than more expensive trips to faraway European and Middle Eastern capitals. ‘Distance’ matters not only geographically but culturally as well – many more Chinese may be more comfortable visiting a place they are more familiar with closer to their country’s borders than one that is halfway across the world.

Furthermore, while Asian cities like Bangkok and Singapore have become more popular destinations for international visitors over the past few years, it is not altogether surprising that they still cannot draw as many visitors from as many places as London, New York or Paris which have held reputations as some of the world’s leading cities for far longer and amongst more of the world. That is setting the bar quite high indeed. Indeed, a more useful question might be whether Asian cities are catching up to those in other parts of the world in terms of resilience over a number of years moving forward. While MasterCard has not collected this date for the years prior to 2015, this could be something to explore further down the line.

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