Chinese tourists crown Vietnam, sideline Thailand

Business Times

3 days ago

[SINGAPORE] Chinese tourists are reshaping travel trends in South-east Asia, with Vietnam and Malaysia gaining ground while Thailand, the traditional hot spot, is seeing visitor growth stall amid currency swings, safety concerns and China's economic headwinds.
For more than a decade, Chinese tourists have been the backbone of South-east Asia's tourism engine, filling hotels, malls and tour buses. But the long-awaited post-pandemic rebound is proving uneven, raising warning signs for some countries and cheers in others.
During the first six months of 2025, foreign tourist arrivals in Thailand were down 4.2 per cent from the corresponding period in the previous year, with 16 million tourist arrivals, according to a recent announcement by Thailand's Ministry of Sports and Tourism.
A major drag came from the slowdown in Chinese visitors, who accounted for just under 14 per cent of Thailand's total arrivals in the first five months of 2025. That marks a sharp drop from about 28 per cent in 2019 before the pandemic and 19 per cent in 2024, based on data from the Bank of America.
On the other hand, Vietnam has emerged as an unexpected winner.
Chinese arrivals to the country surged more than 78 per cent in the first quarter of 2025 from the same period last year, surpassing Thailand by about 200,000 visitors as tourists flocked to luxury resorts and beaches in popular coastal areas Da Nang and Nha Trang.
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Thailand received nearly twice as many Chinese travellers in 2024 as its coastal neighbour.
'This might be the first time Thailand has been outpaced by another South-east Asian rival,' Bloomberg Intelligence analysts Eric Zhu and George Ferguson wrote on Jun 24.
Vietnam led the region in overall tourism growth in the first four months of 2025, with arrivals up 23.8 per cent, while Malaysia came in second with 10.5 per cent growth on the year. Meanwhile, Indonesia experienced a 5.6 per cent rise, while the Philippines and Thailand recorded declines of 0.8 per cent and 0.3 per cent, respectively.
Currency shifts, safety woes
Currency shifts are part of the story, with the Chinese yuan falling 10.5 per cent against the Thai baht over the past year. This has diminished Thailand's longstanding allure as an affordable destination for Chinese tourists, wrote Zhu and Ferguson.
By contrast, the yuan has appreciated against the Vietnamese dong and the Indonesian rupiah, offering Chinese travellers a spending boost in these countries.
But the region's reputation as a whole has also taken a hit amid rising safety concerns. A kidnapping involving a Chinese actor in Thailand in January, as well as a March earthquake, have painted a less rosy portrait of China's southern neighbours, such as Laos, Cambodia and Thailand, which have already been battling reputations as hot spots for illegal activity.
Meanwhile, relatively safer alternatives, including Japan and South Korea, have witnessed Chinese arrivals surge, with Japan reporting a 68 per cent rise in early 2025, while Chinese travel to South Korea similarly increased 10 per cent, Bloomberg Intelligence noted.
Chinese woes
While Malaysia, Vietnam and Singapore have seen upticks in Chinese arrivals, the numbers pale in comparison to pre-Covid Chinese visits to the region.
Countries that have traditionally relied on mainland China as a significant driver of economic growth now face a double whammy as Chinese economic woes slow outbound travel, and external headwinds may push the remaining travellers into alternative markets.
Most vulnerable are Malaysia and Thailand, where tourism accounted for around 14 per cent and 12 per cent of gross domestic product, respectively, in 2024. Hot spots such as Penang and Kuala Lumpur in Malaysia, and Bangkok and Phuket in Thailand, have traditionally been popular among Chinese tourists to the region.
Grim economic prospects have also affected spending patterns among younger travellers from China, with a Bloomberg Intelligence survey of the country's travel sentiment noting that international travel budgets have fallen 23 percentage points from April last year.
'Younger travellers indicated greater caution about spending, likely a reflection of the tougher economic challenges they are facing,' the analysts wrote.
'Special forces travellers'
Younger Chinese tourists, often calling themselves 'special forces travellers' on social media platforms, have opted for shorter, cheaper and more tightly packed itineraries. These travellers are spontaneous and driven by social media trends, making their habits harder to predict, said Chai Boon Sian, managing director and vice-president of international markets at Trip.com.
On platforms such as Xiaohongshu or Douyin, for instance, seemingly random or everyday locations can attain viral popularity online as tourist attractions, such as an oddly colourful Maybank branch in Kota Kinabalu, Malaysia.
'Rather than the Merlion and the Petronas Twin Towers, we now see the Chinese chasing experiences in less-travelled places,' he said. Locations such as Cambodia, Brunei, Semporna in Malaysia, and Phu Quoc island in Vietnam have witnessed surprising demand, Chai told The Business Times.
'Before the pandemic, people travelled in large tour groups by the busloads. Now, younger Chinese travel in smaller groups and stay for shorter periods,' said Chai.
This has made it difficult to forecast when a return to pre-pandemic volume within the region might happen, Chai noted. 'It's hard to say, given the changing travel preferences and group sizes,' he said.
However, he expected the present slump to eventually rebound in the longer term. 'The sheer size of the Chinese population means that travel demand will remain strong, even with current economic headwinds.'
Chai has observed a lasting shift in spending patterns that may spark hope for the tourism sector. 'Unlike older generations who budgeted carefully, the younger generation spend what they want,' Chai added. 'They're not afraid to spend first and figure out savings later.'
Indeed, industry group World Travel and Tourism Council (WTTC) forecast that Chinese spending on international holidays would outpace pre-Covid-19 levels in 2025, after the country's reopening in 2024 fell short of spending forecasts by about 11 per cent.
Rebound hopes
The faltering demand for Chinese tourism is not something that local operators and governments are brushing aside; instead, they are taking concerted efforts to reboot demand from Asia's largest economy.
The Tourism Authority of Thailand has initiated campaigns aimed specifically at attracting Chinese travellers to the kingdom. Its efforts include joint marketing campaigns with partners such as travel agencies and airlines. Meanwhile, the Thai tourism ministry has also planned tourist subsidies of up to 1.8 billion baht (S$70.6 million) to boost the country's attractiveness during the slow season.
Private players are also working with governments to restore momentum. Last year, Singapore-based online travel agency Trip.com tied up with Malaysia's tourism authority to draw more Chinese tourists to the country.
Governments have also loosened visa requirements. Malaysia in April extended its visa-free policy for Chinese tourists visiting for up to 90 days by five years, having introduced the initiative in December 2023. The country reported about 3.3 million Chinese tourists arriving in 2024, up from 1.5 million in 2023.
Likewise, Singapore in February 2024 exempted visa requirements for visits of up to 30 days for Chinese travellers. With higher populations of Mandarin speakers in the region, both Singapore and Malaysia have largely remained attractive to tourists due to linguistic familiarity, Chai explained.
For this reason, service providers are starting to incorporate 'China-friendly' hospitality: from Mandarin-speaking staff and Chinese-style breakfasts in Vietnamese and Thai hotels, to retailers accepting Chinese payment services such as Alipay and having access to translation apps. 'Chinese tourists prefer familiar comforts,' Chai noted.
Domestic travel booms
Instead of venturing southward, an increasing number of Chinese tourists now opt for travel within the mainland. Less-expensive trips closer to home are becoming increasingly popular, including journeys by road and train, the WTTC found in an April report.
Research by the council forecast that domestic travel spending will hit nearly US$1 trillion in 2025 in a 19 per cent jump from the previous year, as the country makes moves to boost domestic consumption through retail and tourism spending.
Similarly, Bloomberg Intelligence's survey found that just 47 per cent of travellers had intentions to venture abroad in the third quarter – typically the most in-demand period for tourism. This was the lowest recorded figure across the last four quarters, wrote Zhu and Ferguson, while demand for domestic travel held steady at around 71 per cent.