Question Period Note: CHINESE TOURISM IN CANADA

What is the status of the Chinese tourism market in Canada?

• On August 10th, China announced its latest list of approved destination countries permitted for outbound group tourism. Canada was not included.

• China’s decision will have an economic impact on Canadian tourism businesses. That is why the Government of Canada is engaged in ongoing dialogue with Chinese officials to resolve the issue.

• Destination Canada continues to market Canada as a premier tourism destination to global markets, including in China, to high yield, non-group travellers.

• The Approved Destination Status (ADS) is a bilateral arrangement between China and specific countries that facilitates Chinese tourists’ travel to those countries in tour groups. In 1995, the ADS policy was created to account for the growing interest of Chinese citizens in foreign travel. When a country has ADS, Chinese travel agents approved by the Chinese government are permitted to promote that country as a destination, and to work with tour operators in the inbound country to ensure that Chinese citizens enjoy a safe and appropriate tour in the destination.

• After years of negotiations, the Government of Canada reached an agreement on ADS in 2009, with approved group tours beginning in 2010. A Memorandum of Understanding to implement the agreement was signed on June 24, 2010 by the Minister of Foreign Affairs for Canada and the head of the China National Tourism Administration. Approved group tours led to a significant expansion of air travel between Canada and China and a boost for tourist destinations and activity from Chinese visitors.

• All ADS travel was suspended by China in 2020 due to the COVID-19 pandemic. In February 2023, China began allowing its citizens to take overseas group tours again after a roughly three-year halt. The ban has been lifted in three stages on a pilot basis, with all three stages of approved destinations including a total of 138 countries and regions. Of the countries that had ADS status prior to the suspension in 2020, only five have not been reinstated: Sudan, Syria, North Korea, Ukraine, and Canada.

• According to press reports, the Chinese Embassy in Ottawa attributes the removal to “hyping up so-called ‘Chinese interference’ and the rise of rampant discriminatory anti-Asian acts and words.”

• Fully or partially guided tours or all-inclusive packages are a popular booking choice for Chinese travellers. In 2021, a Destination Canada survey found that 97 percent of Chinese travellers indicated that they would use a travel agent to help research or book a trip to Canada.

• Quantifying the potential impact of the Chinese announcement is challenging. However, the service industries that benefit most from tour groups can be expected to be affected – especially those in British Columbia and Ontario, which traditionally receive 75 percent of total Canadian expenditures from Chinese travellers.

• As the Chinese tourism market matures, the population is becoming more comfortable with independent, non-group travel. With that, a May 2018 Skift Research Report found that nearly 50 percent of Chinese outbound travellers now prefer independent travel.

• The August 10 list of approved destinations for group tours from China was the third list announced this year.

• China announced that, beginning in February 2023, outbound tours following COVID-19 would resume. Its Approved Destination Status (ADS) list now includes 138 countries, including the U.S., Germany, and the United Kingdom. Canada, however, is not included in the updated list, and is among only four other countries yet to have its Approved Destination Status reinstated.

• As non-tour group Chinese travellers tend to be higher yield, Destination Canada has in recent years shifted its focus to marketing to China’s independent leisure and business travellers.

• In 2019, China was Canada’s third-largest source of international tourists and was Canada’s second-largest source of tourism export revenue, with spending of about $1.9 billion by over 700,000 Chinese visitors.