Retailers Eager for Chinese Tourists to Return

Luxury shops and retailers in Vancouver, Toronto, and LA are poised to benefit from Chinese travelers coming back.

February 26, 2024
  • Heli Brecailo

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  • Top-spending Chinese tourists are taking their time to return to Canada and the U.S.

  • For now, Canada and the U.S. have only limited ability to speed up Chinese visitation as this is a Chinese economic issue.

  • Luxury stores and markets like Vancouver, Toronto, and LA will benefit more from the return of Chinese travelers.

Chinese outbound travel tied to economy

The Chinese aren't traveling abroad as previously, in part due to scars left by Beijing’s zero-tolerance pandemic policy. Despite an easing of travel restrictions in 2023, the number of flights out of China has yet to return to earlier levels.

This December, China’s international air passenger traffic peaked at 63 percent of the corresponding level in 2019, although for the full year of 2023 it was only 39 percent.

The return of Chinese tourists will undoubtedly boost retail sales and food services in major North American destinations. Although visitors from China make up a smaller share of tourists, they outspend other nationalities.

The World Travel and Tourism Council reported that travelers from mainland China spend more on shopping than other nationalities do. By 2033, China is expected to account for approximately one in four global travel dollars.

Chinese outbound travel is tied closely to the Chinese economy. With the softening economy and weaker currency, Chinese consumers have become more cautious. Chinese airlines are also hesitant to offer new flights, keeping fares high.

Chinese visitors lag other nationalities in Canada

When it comes to returning to Canada, Chinese visitors lag other nationalities. This November, only 51% of Chinese visitors returned to Canada compared with 2019 levels. This compares with 91% of Americans, 121% of Mexicans, 96% of French, and 87% of Brits returning to Canada.

While Chinese travelers account for only a small percentage of international tourists in Canada, some locations, such as Vancouver and Toronto, rely more on Chinese spending and feel their absence.

Destination Canada anticipates that Chinese visitation and spending in Canada will recover by 2027. By 2030, China will be Canada’s largest overseas market for spending and second for visits.

The return of Chinese tourists will drive luxury growth

Luxury retail is particularly impacted by the lack of Chinese tourists. Canada and the U.S. are relatively expensive destinations for Chinese travelers and tend to attract those from wealthy households.

Luxury retailers in Vancouver and Toronto have become used to catering to Chinese customers by accepting Chinese digital payment methods such as WeChat and Alipay.

Before the pandemic, more than two-thirds of Chinese shoppers bought luxury goods overseas. With the pandemic, the Chinese turned to their domestic market to buy luxury, but that should change as they travel internationally again.

Contact Heli Brecailo

National Research Manager, Retail Research