China Tourism and Economics

China’s Tourists demand

Income and pricing influence tourist decisions. The majority of empirical research has concluded that a destination’s income elasticity of tourist demand is positive and larger than 1, implying that international tourism destinations are superior-good (OECD, 2016). According to consumer behavior theory, increasing destination costs diminishes demand while increasing the desire for alternatives. Tourism in other countries is a luxury for the Chinese, and it is heavily reliant on the evolution of relative pricing and travel costs between their country and the destination, as well as the availability of flights to such locations.

Cost at destination

The cost of arrival at destinations is a key factor in the tourism industry. Once they’ve decided where they’ll go, they must consider all or most of their decisions there, such as taking the bus regularly, taking the subway from the departure gate, the typical accommodation cost for their transportation style, the average restaurant cost, attractions they’d rather see, and so on. Tourists assess the expenditure on these luxuries to determine whether they can manage them through their dream location. According to OECD (2016), Chinese travelers investigate prices and find out how much they cost if they are advertised online so customers can see their expenditure and whether it is enough for the place. For instance, if individuals choose between two different locations, both offering the same amenities, it is more likely for them to choose the cheaper option.

Flight availability

When tourists visit a given location, the major hindrance is flight availability. Most people want to visit places for a few days and simply get back to their lives before long. This tourist demand allows Chinese tourists to effectively choose a destination which gives them a quick and easy way in and out as well. As per OECD (2016) Flight accessibility allows lots of users to engage in interaction while also boosting the tourism sector, which is a key economic boon for both origin-destination- nations. For this reason, Chinese tourists are especially careful when selecting destinations. For instance, if a tourist requires immediate medical attention that is not available at the destination, they’d have to be flown out to the nearest location where they can get it. If the destination does not have adequate flight availability, the tourist may be delayed, which could result in a fatal outcome.

The expenditure and receipts (OECD, 2016)

Table 1: Expenditures and receipts in China for the last three years.

In 2019, China had a stable economy. Job allocation was increasing exponentially and economic stability was close to being achieved. During this period, of the total expenditure in the tourism industry, the outbound expenditures were higher than the receipt by 20%. This shows that people spent more money outside the country than they did in the country. In 2020, however, the Covid-19 emerged in China. The expenditures in this period reduced by 20% as compared to the previous year. However, the pandemic did not stop and preceded the following year. Due to the fast rate at which the disease was spreading, measures such as lockdowns were put into place. These measures prevented inter-country travel between China and many countries. Thus, most Chinese tourists were cut off from accessing major attractions or them. This prevented most of them from traveling, thus, the expenditures were reduced heavily. As a result, the receipts increased by 20%as compared to the previous year.

Conclusion

The tourism industry is a key field in the tourism sector. In China, tourism contributes a significant portion of the revenue collected. However, several demands affect the choice of destination as well as the overall expenditure in the industry. The availability of flights to the destination is a key demand that most tourists pay attention to, especially in destinations where they might need to leave in a hurry. Chinese tourists also consider the cost and prices of arriving and staying at their destinations, in that they choose destinations that best fit their economic status. In summative, as seen in the table above, the total expenditure increase and decrease depending on the country’s economic state. When the economic state is good, the total expenditure is high. On the other hand, when the economic status is poor, the expenditure is low.

References

OECD (2016), OECD Economic Surveys: Norway 2016, OECD Publishing, Paris, http://dx.doi.org/10.1787/eco_surveys-nor-2016-en

OECD (2016), PISA 2015 Results (Volume I): Excellence and Equity in Education, PISA, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264266490-en.

OECD (2016), Skills for a Digital World, OECD Publishing, Paris, http://dx.doi.org/10.1787/5jlwz83z3wnw-en.

OECD (2016), Skills matter : further results from the survey of adult skills., OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264258051-en.