KUALA LUMPUR: Chinese tourism spending in Malaysia could surge to over RM30 billion next year, nearly double than 2019, driven by an expected increase in tourist arrivals from China and higher average spending per visitor, according to analysts.
They noted that Chinese visitors are spending significantly more in the post-COVID era.
In the first half of 2024, the average tourism expenditure per Chinese visitor was 27 per cent higher than in 2019 (1H 2024: RM6,242 vs. 2019: RM4,921), according to Maybank Investment Bank (Maybank IB).
"Our channel checks reveal that the recent summer holidays saw Chinese visitor arrivals exceeding even pre-COVID levels. We estimate that Chinese visitor arrivals may surge to five million in 2025 (60 per cent more than 2019), and Chinese tourism expenditure may also surge to over RM30 billion, it said in a note.
Malaysia and Singapore have emerged as top destinations for Chinese tourists, both ranking in the top 10 most visited countries, with flight seat capacity from China surpassing pre-pandemic levels. This is largely attributed to the waiver of visa requirements for Chinese visitors.
In the first eight months of this year, Malaysia saw the arrival of 2,285,785 Chinese tourists, a 160 per cent increase compared to the same period last year. Prior to the COVID-19 pandemic in 2019, Malaysia welcomed 3.1 million tourists from China.
Seat capacity from China to Malaysia and Singapore surged from below 80,000 in early 2023 to around 400,000 by September 2024. In September alone, seat capacity to Malaysia reached 123 per cent of pre-COVID levels, while Singapore saw 118 per cent.
"We observe Chinese visitation to Singapore because a third of all Chinese visitors to Malaysia enter by land from Singapore as part of 'Xin-Ma-Tai' (Singapore-Malaysia-Thailand) tours," Maybank IB added.
The growth in seat capacity from China to Malaysia has been primarily driven by Chinese airlines rather than Malaysian carriers.
Based on the September 2024 seat capacity of 419,153 from China to Malaysia and an 80 per cent load factor, the investment bank estimates that Malaysia could receive four million Chinese visitors by air in 2025.
With an additional 1.1 million Chinese tourists expected to enter via land from Singapore, the total number of Chinese visitors could reach five million in 2025.
Interestingly, Tourism Malaysia has set a lower target of five million Chinese visitors for the year, but if this is achieved, Malaysia would see a 60 per cent increase in Chinese arrivals compared to 2019.
Maybank IB highlighted several publicly listed companies poised to benefit from Chinese tourism, including Genting Malaysia Bhd (which saw 4.0 per cent of its 2019 visitor arrivals from China), Genting Bhd via Genting Malaysia and Genting Singapore (which derived 20-30 per cent of its 2019 gross gaming revenue from Chinese visitors), CapitaLand Group (14 per cent of 2019 available seat kilometres), and AirAsia X Bhd (25 per cent of 2019 available seat kilometres).
Other companies with indirect exposure to Chinese tourism include KLCCP Stapled Group and Pavilion REIT.