As China’s outbound tourism market continues to balloon, a growing number of destinations are easing visa requirements to woo the mainland traveller, with casinos in those countries likely to be among the key beneficiaries. With research suggesting that most Chinese overseas tourists will visit a casino, relaxed visa restrictions could be a key driver for GGR.
As China prepared to celebrate the year of the monkey in early February, there were many who wondered if the celebrations would be muted because of the effects of the perceived economic slowdown as Q4 GDP growth came in at 6.8 percent. That was lower than expected and came as industrial production slowed, exports and imports remained sluggish and prices fell, highlighting deflationary pressures in the economy.On the face of it, the sluggish economy, coupled with a weaker Renminbi making overseas travel more expensive, might bode ill for the regional and indeed global casinos. However, the consumer sector has shown surprising strength.
China’s outbound tourism market, already the largest in the world, is driving trends in luxury and leisure across the globe but, as this market continues to expand, the demographic is also changing with the millennial Chinese seeking different experiences from their parents. In 2014, Chinese outbound travellers spent a record $164 billion. By 2019 this number is expected to balloon to 174 million tourists spending $264 billion annually on outbound tourism, making understanding the preferences of the younger generation key.
It’s difficult to enter a tourist hotspot in Asia without observing signs written in Chinese, or a street vendor shouting greetings in Mandarin - a testament to the influence of Chinese outbound tourism.
The Coronavirus, now renamed as Covid-19, has devastated the near-term outlook for Asia’s casino operators, though analysts still expect demand to snap back sharply once the outbreak is under control. The big question is when that might be.