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Will Chinese Tourists Determine the Future of the UK Tourism Industry?

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The UK government is slowly realising the importance of attracting more Chinese tourists to the UK. While the visa application process continues to be lengthy, the UK Home Office has announced plans to facilitate the procedure by introducing a guidance leaflet in Mandarin from June 2013. However, more practical solutions such as  easing the visa processing system, joint data collection with other European countries concerning Chinese visa applicants or abolishing visa requirements altogether, need to be introduced by the UK government in order to encourage more wealthy travellers from China to visit the United Kingdom.

If such steps are not taken the country risks losing its competitive advantage, missing out on a slice of Chinese outbound visitors that amounted to over 48 million trips abroad in 2012. Failure to attract Chinese visitors threatens job creation and inhibits tourism receipts, particularly seeing as Europe has laid out the red carpet to Chinese consumers.

Currently, the majority of Chinese tourists opt for other European destinations as a consequence of the visa application process, which are profiting from the high spending power of the Chinese. It remains to be seen just how much the change will ease the visa application process for Chinese tourists and if it will encourage them to visit Britain.

UK visa restrictions hampering tourism flows from China

Chinese tourists have become an integral part of the foreign tourist influx into Europe. However, up until now, many have stayed away from the UK. Countries such as France, Germany, Austria, Italy and Spain, which are part of the Schengen area, have seen a much greater influx of Chinese tourists in comparison. While France attracted 1.4 million tourist trips from China last year, the UK drew only 232,000.

Arrivals to the Top Western European Countries from China 2012/2017

Arrivals to Top Western European Countries from China

Source: Euromonitor International

Chinese tourists see more benefits in applying for the Schengen visa as it allows them to visit a number of European countries during their trip. The UK visa application requirements for Chinese tourists are also more intrusive compared to those of the Schengen visa. Chinese visa applicants are required to provide detailed information about their financial background and attitude towards terrorism, as well as biometric data such as fingerprints. This has deterred a large number of Chinese tourists from visiting the UK.

Key customers for luxury goods in Europe

Chinese tourists are high spenders, especially when it comes to luxury goods. Some European destinations generate the majority of their luxury goods revenue from sales to tourists. This is particularly the case in Southern European destinations such as Italy, France and Spain. Despite economic difficulties including high unemployment and low consumer confidence, Italy and Spain rank first and fifth, respectively, in terms of luxury goods expenditure in Western Europe.

Luxury Goods Value Sales in Top Western European Countries 2012/2017
Luxury goods value sales in top Western European countries

Source: Euromonitor International 

Vast unexploited potential to attract Chinese tourists to the UK

The UK government is slowly realising the potential income that could be generated by attracting more Chinese tourists to the country. According to Visit Britain, tourist visa liberalisation to non-European nationalities could generate an additional £2.8 billion in tourism revenue per year. Chinese visitors alone could generate £1.2 billion of this, according to the Airport Operators Association, as Chinese tourists are estimated to spend around £1,600 per head when visiting the UK.

The UK has much to offer Chinese visitors and can be very competitive with other European destinations currently enjoying stronger tourism flows from China. Chinese tourists are particularly interested in the British monarchy and in the important cultural sights spread throughout the country. The British love affair with tea is another characteristic that the British and Chinese share. The ability of many Chinese tourists to speak English also facilitates trips to the UK, while the large number of luxury retailers present in the UK is another strong attraction.

Initial changes are being introduced but much more could still be done

The UK Home Office has announced the start of talks with Chinese tour operators in order to introduce easier application requirements for Chinese tourists. The Home Office plans to provide visa guidance in Mandarin from June 2013, while the visa application form will remain in English due to cost issues related to translating the answers. It remains to be seen if these initial changes will impact the number of travellers from China to the UK. A lot more still needs to be done in order to attract these high-spending tourists.

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