Trump’s trade war with China hits US tourism

Chinese tourist taking a photo of the statue of Liberty in New York City

US president Donald Trump’s tit-for-tat trade war with China appears to have caused a significant slump in Chinese visitors to the US that could cost the American tourism sector dearly this year, according to ForwardKeys.

Weekly bookings from China to the US were up 2% from the last week of February (after the Chinese New Year holiday) to March 23 when the first tariffs took effect.

Chinese tourist taking a photo of the Statue of Liberty in New York City

Since then, ForwardKeys data shows the year-on-year figure to August is down by 8.4%, falling further as new rounds of tariffs have been announced.

ForwardKeys said the negative impact on the Chinese currency, which has fallen 7.5% against the US dollar since tariffs were introduced – meaning tourists’ money buys less – and warnings from Beijing about US travel security risks, have likely further influenced the trend.

ForwardKeys’ data reveals that for the rest of the year, Chinese outbound bookings to the US are 9.6% behind where they were at the same time last year, whereas Chinese outbound bookings worldwide are ahead by 5.5%.

This pattern of growth worldwide but slowdown to the US is consistent in every month except October. A general setback in October is due to this year’s Mid-Autumn festival falling at the end of September, which draws departures at the start of the busy National Day Golden Week holiday into September from October.

The biggest impact has been on bookings for group travel (six or more passengers) from China to the US, currently behind for the rest of 2018 by 34.4% compared to last year.

FIT bookings are behind 3.9%, with leisure travel being worse affected than travel for business or travel to visit friends and relatives, ForwardKeys pointed out.

By way of a benchmark, Chinese bookings for travel to Canada were up 4.8% to the end of July and are currently ahead 8.0% for August to December.

ForwardKeys CEO and co-founder, Olivier Jager, said: “Our findings strongly suggest that president Trump’s trade war has had a significant impact on Chinese tourism to the US. Looking at the year to date, we see a setback in Chinese tourism arrivals of just under 5%. If that continues to the end of the year, we estimate that the cost to the US economy will be north of half a billion US dollars in 2018.

“Chinese spending in this sector is significant – it amounts to the largest category of US services exports to China. It is unquestionable that the Chinese appetite for visiting the US is diminishing, and that is bound to worry the US travel industry.”

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