Full visa liberalisation for Chinese travellers into Europe could generate EUR12.5 billion per annum in additional inbound spending

New research from the European Travel Commission shows that visa liberalisation between China and Europe would undoubtedly increase demand from one of the most lucrative source markets and contribute to European GDP and employment growth. While any visa liberalisation measures need to be balanced against security and immigration concerns, its findings show the positive impact on GDP and job creation within the tourism sector specifically and the wider economy more generally, “would likely be considerable”.


Summary:

  • European Travel Commission research shows visa liberalisation between China and Europe would increase demand and contribute to European GDP  growth;
  • The analysis estimates that a full visa liberalisation scenario would increase the average growth of Chinese arrivals from 7% to 18% per year between 2018-2023;
  • This would generate additional inbound spending of EUR12.5 billion per annum and raise total employment level by nearly 1%, creating 237,000 additional jobs.

International tourism is an important driver of European economies in terms of its size and growth potential. International tourism arrivals in European countries accounted for over half of arrivals worldwide in 2017, and the region includes seven of the world’s top ten destinations ranked by visitor volume. Travel to the region has grown at an average rate of around 5% in each year since 2010. However, travel restrictions limit the growth potential of international travel, especially from key emerging markets which are taking a growing share of global tourism demand and will continue to rise in prominence.

Europe’s visa regimes are among the most restrictive in the world, according to the United Nations World Tourism Organisation (UNWTO), which estimated that almost three quarters of the global population required a visa to travel to Europe in 2015. This number largely accounts for visitors from long-haul source markets which are amongst the most valuable as they tend to stay longer and spend more per day than the average visitor.

The European Travel Commission report ‘Visa Policy and Chinese Travel to Europe‘ quantifies the potential impacts of visa facilitation for Chinese travellers on European tourism. Presently China is one of the long-haul source markets for which visa-free access to the EU, including the Schengen area, is not available despite the incremental rise in Chinese travel demand to Europe over the last ten years.

China is the world’s largest outbound travel market, both in terms of generated arrivals and total travel expenditure and travel demand to Europe has been strong in recent years, and the outlook equally so. Yet, China is subjected to some of the “most stringent visa requirements imposed by European destinations,” says the report. “European destinations are host to less than half of Chinese long-haul travel; a proportion which is largely unchanged from ten years ago. This is despite some rapid growth in Chinese travel demand over the same period,” it adds.

In analysis by Tourism Economics assessing the potential uplift for the EU 27 (excluding UK) under three different policy approaches – adoption of industry best practice, improvements in available visa types and full visa liberalisation – the relaxation of restrictions for Chinese arrivals shows positive uplift.

In the baseline forecast average annual arrivals growth from China to EU27 is estimated at +7.4% over the 2018-23 period compared to +18.4% in the full visa liberalisation scenario. Arrivals from China currently account for less than 2% of all visits to the EU and in all scenarios this share is expected to increase. In the full visa liberalisation scenario this share is expected to reach 3.9% by 2023 compared to 2.3% in the baseline outlook.

The analysis suggests that adoption of industry best practice (e.g., reduced fees, increased validity, less paperwork) would yield 2.2 million more visitor arrivals from China in 2023 compared to the baseline; +16% uplift for that market. Improvements in available visa types (e.g., visa on arrival or eVisa) would likely result in Chinese arrivals to Europe being +17% higher in 2023 than if there was no policy change, equating to 4.4 million additional arrivals in 2023, while, full visa liberalisation would likely yield a +71% increase in Chinese arrivals, equivalent to +1.6% increase in total EU arrivals in 2023 relative to a baseline of no visa policy changes.

Under the best practice scenario, inbound revenue would likely be up  +0.7% or EUR2.8 billion higher than the baseline outlook for 2023; the new visa types scenario would grow inbound revenue +1.3% higher than baseline; an additional EUR5.5 billion per annum by 2023; while full visa liberalisation would generate additional inbound spending of EUR12.5 billion of spend per annum, +2.9% higher than the baseline by 2023, according to the research. This would grow travel and tourism’s contribution to Europe’s GDP up +1.0% higher with a total employment uplift of +0.9%, representing 237,000 additional jobs, including 120,000 directly within the sector.

To avoid a greater loss of opportunities, especially from long-haul source markets such as China, “it is imperative that the EU’s visa policies are modernised and enhanced” to further facilitate travel from key markets, says the report. “Now more than ever Europe needs to secure further employment; investing in visa liberalisation targeted at key markets can achieve this aim efficiently and effectively,” adds Robert Andrzejczyk, vice president of the European Travel Commission and coordinator of its visa advocacy work.