More Chinese tourists have been booking trips to London as a result of the plunging pound thanks to the Brexit vote. (Shutterstock)
A volatile stock market, downgraded credit rating, and plunging pound may be some of the economic woes plaguing the UK after the Brexit vote, but there is one thing that seems set to go up in the near future: Chinese tourist numbers.
According to a recent report in Shanghai Daily, travel agencies are seeing a surge in Chinese travelers booking tour packages to the UK as travel and shopping in the region are set to become much cheaper. According to Chinese travel agency Shanghai Spring Tour, all of its tour packages to Britain have now been totally booked for the summer. Meanwhile, Ctrip has also seen a jump in bookings to the UK.
With shopping a high travel priority and an acute awareness of where to seek out the best prices of luxury goods and avoid mainland tariffs, Chinese tourists have been known to follow currency fluctuations to get a good deal. This has been one factor in the recent Chinese spending boom in Japan as the weak yen means cheaper prices of luxury goods and premium Japanese brands. When the ruble rapidly plunged in 2014, Chinese travelers anddaigou sellers rushed to Russia and cleared out entire luxury boutiques thanks to the cheap prices.
The UK has long been working to attract more Chinese tourists, but its exclusion from the Schengen Area has made the visa application process cumbersome for visitors from China. As groups such as the luxury retailer-led UK-China Visa Alliance have lobbied for easier visa access, the government has made changes such as a two-year multi-entry visa policy for Chinese travelers as well as a partnership with Belgium to grant Chinese visitors with a Belgium-issued Schengen visa access to the UK.
But these efforts for greater EU-related visa access may now be undone, showing it’s not all good news when it comes to Chinese tourism in the post-Brexit UK. According to a recent webinar on the Brexit’s impact on Chinese tourism in the UK by the European Tourism Association and the China Outbound Tourism Research Institute (COTRI), UK-Europe package tours could take a hit as participants traveling to both the UK and European countries would have to declare tax-free goods brought from the UK into Europe. This includes not only European countries, but also Ireland, which the organizations predicts will now see fewer Chinese tourists entering form the UK.
“If a tourist is intending to do a lot of shopping, the only option would be to visit either the UK or the EU, otherwise they will risk paying VAT and customs duties,” said COTRI COO Daniel Meesak.
In the long run, the webinar pointed out that Chinese tourists are risk-averse when it comes to making their travel plans and tend to avoid places seen as politically unstable. “Any type of instability that will follow the Brexit will without a doubt be a deterrent for Chinese tourists,” said Meesak. The perception of increased political and economic instability could also deter the Chinese real estate buyers who have been flooding to London in recent years. “One of the main reasons, as a Chinese person, you would like to invest in a property market abroad is to get away from risk in the first place,” he noted. “The Brexit makes the UK a riskier investment.”