Asian tourism-focused businesses ready for China rebound as border reopens

AmorePacific Holdings

10/01/2023 04:31

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      Chinese tourists spent $255 bln a year before pandemic
    

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      Thailand has lifted 2023 arrival forecast for Chinese
tourists
    

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      Trip.com reports 83% jump in outbound searches as border
reopens
    

  
    By Minwoo Park, Chris Gallagher and Jiraporn Kuhakan
       SEOUL/TOKYO/BANGKOK, Jan 10 (Reuters) - South Korean and
Japanese shop owners, Thai tour bus operators and K-pop groups
are among those celebrating China's border reopening as
businesses around Asia rekindle ties with the region's largest
economy.
    China was the world's largest outbound tourism market before
the pandemic, and the absence of its once $255 billion of annual
spending since borders were shut three years ago has led to
financial trouble for many tourism-dependent businesses and
employees.
    "I'm not afraid of getting COVID-19," said Choi Dae-sung,
49, who has sold clothes and other products in Seoul's busy
Myeongdong shopping district for about 30 years but rode a motor
bike delivering food to make ends meet during the pandemic.
    "We had such a hard time, and I would rather have more
Chinese people come than the government restricting their entry
so I can do business."
    Hikeshi Spirit, a clothing store in Tokyo's Asakusa district
that was hugely popular with Chinese tourists before the
pandemic, is also hoping this key customer segment will join
other nationalities in returning soon, sales manager Masaki
Nagayama said.
    "About 90% of our staff can speak English, so with the
timing for Chinese customers, we would like to think about
hiring staff who can speak Chinese," he said.
    In Thailand, the deputy prime minister personally welcomed
Chinese tourists at Bangkok's Suvarnabhumi Airport on Monday, a
day after China's border reopening, and the country now hopes
Chinese visitors can double this year to 10 million people,
nearing the pre-pandemic level of 11 million in 2019.
    "Tour bus operators who have had their vehicles idly parked
for over three years are now gearing up for (bus) inspections,"
said Thai Tour Bus Association President Wasuchet Sophonsatien.
    Kitsanan Bulalom, 53, a Bangkok tour bus driver for 14
years, said he and colleagues were eager to get back to work and
earn more cash, adding that he worked six days a week before the
pandemic but that was cut to only about one day a week when
tourism slumped.
    Underscoring the improving travel demand outlook, data from
travel website operator Trip.com Group Ltd  9961.HK  showed an
83% jump in outbound searches from Dec. 26 to Jan. 5 versus the
previous two week period. Thailand, Japan, the United States,
South Korea, Australia, Macao, Singapore, Hong Kong and Taiwan
were the most-searched destinations.
    South Korean K-pop groups are also expected to be among the
beneficiaries of China's reopening, with Kyobo Securities
analyst Park Seong-guk pointing to an expected bump in ticket
and merchandise sales in a note to clients.
    A video uploaded to Chinese social media site Weibo on
Sunday showed K-pop boy band Tempest posing on the red carpet of
a local music festival after arriving at Beijing Capital
International Airport.
    Yue Hua Entertainment Korea, which manages Tempest, did not
respond to a request for comment. 
    Park at Kyobo predicted the four major K-pop agencies – Hybe
Co Ltd  352820.KS , SM Entertainment Co Ltd  041510.KQ , JYP
Entertainment Corp  035900.KQ  and YG Entertainment Inc
 122870.KQ  – will see tour attendance grow by 35.6% this year
compared to 2019 when sales were depressed due to tension over
the THAAD U.S. missile defence system stationed in South Korea.
    Share prices in China-exposed companies as varied as
Airports of Thailand PCL  AOT.BK  and South Korean cosmetic
makers LG H&H Ltd  051900.KS  and AmorePacific Corp  090430.KS 
have performed strongly in anticipation of a rebound in business
since the border reopening was announced on Dec. 26. 
    But some businesses are striking a more cautious note, as
many countries implement travel restrictions that require
Chinese visitors to take pre-departure COVID-19 tests and cap
flight numbers to and from the mainland.
    International flights to and from China remain at only 11%
of 2019 capacity, Cirium data showed, leading to high air fares
ahead of the week-long Lunar New Year holiday beginning Jan. 21.
    "We welcome the measure of reopening the border but try not
to estimate a quick jump in business once the border reopens,"
Annie Yau Tse, chairwoman of the Hong Kong Retail Management
Association, which represents more than 9,000 retail outlets,
said last week.
    "The pandemic outbreak on the mainland is still vigorous and
needs time to recover, while domestic consumption remains weak
on the mainland."
 (Reporting by Minwoo Park in Seoul, Chris Gallagher in Tokyo
and Jiraporn Kuhakan in Bangkok; Additional reporting by Hyunsu
Yim, Daewoung Kim, Hyonhee Shin and Choonsik Yoo in Seoul,
Francesco Guarascio in Hanoi and Donny Kwok in Hong Kong;
Writing by Jamie Freed; Editing by Miyoung Kim and Christopher
Cushing)
 ((Jamie.Freed@thomsonreuters.com;))