Why are Chinese tourists avoiding trips to the U.S.?

In 2018, Chinese tourists made nearly 150 million trips around the world, spending a colossal $277 billion. More than $36 billion, or about 13% of that sum, was spent in the US, with Chinese visitors spending it up in Hawaii, Hollywood, and other big-ticket US destinations.

Since the start of the trade war, however, Chinese tourism to the US is down by more than 8%. The number of Chinese visitors stateside is waning—due to geopolitical pressures, a strong dollar, and the seductive call of the rest of the world.

The resulting trend could be extremely damaging for the US tourism sector. It’s already under pressure from reduced domestic travel, as Americans save pennies to pay off their debt. (Talk of a looming recession hasn’t helped.)

Though visits of all kinds to the US from China are falling, it is pleasure trips that have taken the greatest hit.

Since Donald Trump imposed tariffs on Chinese goods in March 2018, the dollar has gone from strength to strength—making it harder for Chinese tourists to justify an already expensive trip.

Chinese officials have also done what they can to dissuade travel to the US, including issuing a travel advisory in June warning of “frequent mass shootings, robberies and thefts.” At a Chinese Foreign Ministry press conference, spokesperson Yan Shuang said it was a question of “mutual respect.” He cited harassment of Chinese citizens seeking the right to travel to the US by US law-enforcement agencies as a particular concern.

It’s questionable whether the advisory, which expires at the end of the year, had much of an impact compared to the wider economic and geopolitical picture. Online, Chinese people mocked the warning, noting that officials’ families were continuing to travel to the US.

Then, there’s the question of visas. To travel to the US, Chinese visitors must apply for a B visa. Last year, 17% of Chinese applicants were refused—but had to pay $160 for their application nonetheless. Since 2013, the rate of refusal has steadily risen.

At the same time, other countries have taken dramatic steps to open their doors to Chinese tourists, and their spending potential. Thailand is the latest to float visa-free entry for Chinese travelers. It would be joining the likes of the United Arab Emirates, Fiji, and Morocco. After relaxing its requirements in 2016, the North African nation saw a 3,500% year-on-year increase in visa applications from China processed by Ctrip, a Shanghai-based travel agency.

With more options than ever for Chinese travelers, the roughly one-in-six chance of a US visa rejection could be the difference for families choosing between a beach vacation in Barbados or Hawaii.

But while they may not be going to the US, Chinese tourists are still packing their bags to other cheaper, more welcoming destinations. Outbound travel from China worldwide remained consistent, with 5.5% growth in 2018.