Article Correctness Is Author's Responsibility: Chinese Tourism to U.S. Cities Takes a Hit From Trade Wars

Tensions between the United States and China appear to be taking a toll on Chinese tourism to America, according to new data from the National Travel and Tourism Office.

Customs data collected by the American agency show that the U.S. received 2.9 million Chinese visitors in 2018, down 5.7 percent from the year before. It’s too early to predict the impact on individual cities in the long term, says Tori Barnes, vice president of public affairs at the U.S. Travel Association, but that trade organization has been warning that a prolonged trade war could “bleed into the travel arena.”

The economic impact for popular destinations could be significant. The average Chinese visitor spends 18 days and $7,000 per trip to the U.S., according to the U.S. Travel Association.

The top American destinations are New York, Los Angeles, San Francisco, Las Vegas, D.C., and Boston, Barnes says. But the effects could extend beyond large cities: Smaller places near national parks and mountains—including cities in Utah and Montana—also get signifiant foot traffic from Chinese visitors.

Some local businesses say they are already noticing the change. One transportation company in Salt Lake City, which shuttles international tourists from the airport to Yellowstone National Park, told the Idaho Falls Post Register that it has seen many last-minute cancellations. And in Las Vegas, a spokesperson for a travel agency catering to Chinese travelers told a local news station that some companies are struggling to get people to come to their trade shows. Las Vegas Asian Chamber of Commerce President Sonny Vinuya also told the station that visa issues lowered the number of Chinese New Year performers from 3,400 to 900 this year.

The trade war has been punctuated by harsh rhetoric between Washington and Beijing. Last summer, China issued a travel warning, telling its citizens to beware of “shooting, robberies, and high costs for medical care” in the U.S., according to the AP. China’s economic uncertainty is another factor driving this decline, leading budget-conscious travelers to stay closer to home.

According to the U.S. Travel Association, Chinese visitors make up the third-largest source of overseas travel to the U.S., after the U.K. and Japan, and they spent $18.8 billion dollars in the U.S. in 2017.

Still, the U.S. had already seen growth slowing among Chinese travelers in recent years. The National Travel and Tourism Office reports that the number of Chinese visits tripled between 2000 and 2010—from 249,000 visits to 802,000—and tripled again between 2010 and 2015. But 2017 saw the slowest pace of growth, with just 4 percent more trips compared to the previous year.

Gary Hufbauer, a non-resident senior fellow at the Peterson Institute for International Economics, worries that political tension may further slow things down if the trade war escalates—particularly if President Trump continues denouncing China as America’s enemy. That, he said, further alarms Chinese citizens over traveling to what they might consider a hostile country. Meanwhile, the Chinese government can retaliate by further discouraging travel, either by broadcasting negative messages about the U.S. or by limiting travel visas.

That latter method would affect a different kind of Chinese visitor: students, some of whom are already feeling the effects of Trump’s visa restrictions in the tech sector. Hufbauer says that’s a larger concern for many cities. Over the last decade, the number of Chinese international students grew fourfold. Between 2017 and 2018, U.S. universities saw 363,341 students—up from 81,127 in the 2007-2008 school year, according to the Institute of International Education. One recent survey from a tuition-payment startup for Chinese students abroad found that many are now opting to study in Britain, Canada, and Australia over the U.S.

That’s a concern in Boston, for example, where Chinese students make up over 20 percent of Harvard University’s international study body. In a July 2018 interview with local station WBUR, the Greater Boston Convention and Visitors’ Bureau President Pat Moscaritolo said his organization is “pretty nervous” about the potential impacts. Chinese visitors overall represent 15 percent of the city’s tourist market, and have become its biggest group of overseas tourists—one that spent a whopping $273 million in 2016.

But Hufbauer is cautiously optimistic that further escalations of the trade war will be limited.

“At this point, it is certainly not good for the U.S. economy, and it’s obviously hurting the Chinese economy, so there is a lot of motivation” to avoid escalation, he says.