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‘There’s a lot of pent-up demand’: The world is waiting for Chinese tourists to return

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As China reopens to the world for the first time in nearly three years, 24-year-old Mai Liang is wasting no time planning her first trip.

The Nanjing-based student hopes to travel to Hong Kong as soon as this month and has already budgeted 5,000 RMB ($730) for high-end cosmetics.

“I miss the street vibes, the atmosphere and the food so much,” she said. “Beauty products sold in Hong Kong still have a competitive advantage in terms of prices. I trust their authenticity more than those sold on Chinese e-commerce platforms.”

Since early 2020, the largest number of tourists in the world have been cut off from the world ChinaThe machine for zero Covid restrictions that included mass testing, lockdown and quarantine of arrivals.

A woman arriving from China enters a Covid-19 testing center
Some countries impose border controls and mandatory testing on visitors from China © Lee Jin-man / AP

This weekend, like Beijing He finally deconstructs the last of those procedures, set to change. Around the world, airlines, hotels and luxury companies are preparing for the return of tens of millions of tourists and hundreds of billions of dollars – although experts have suggested the recovery could take months to gather steam.

May’s travel visa to Hong Kong, which reopened its shared border with China on Sunday, expired in 2019, and she has been unable to renew it while services were suspended during the pandemic, reflecting broader hurdles to travel from the locked-down country. China has “strictly restricted” foreign travel in an effort to prevent its population from coming back with the virus.

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In 2019, before the coronavirus pandemic, 155 million Chinese traveled abroad and spent $255 billion, according to analysts at Citi, who forecast a strong rebound in the first quarter of 2023 and a mass return of tourism in the second quarter.

The early impact is likely to be felt in Hong Kong, where tourism accounted for 4.5 percent of the economy in 2018. The city government has He unveiled a stake of about 60,000 Access daily in each direction when borders reopen on Sunday.

Their return will be eagerly awaited. In the first 10 months of 2022, there were just 249,000 mainland visitors to Hong Kong, down from more than 51 million visitors in 2018.

Mainland tourists’ taste for luxury has been the lifeblood of Hong Kong’s ailing retail sector, which lost its crown of the world’s most expensive retail district to rent on New York’s Fifth Avenue last year, according to real estate consultants Cushman & Wakefield.

For major global destinations such as Europe and the United States, limited commercial flights and a backlog of visa applications mean the impact of China’s reopening may take some time to materialize. The China Outbound Tourism Research Institute estimates that 18 million Chinese tourists will travel internationally in the first half of the year, followed by 40 million in the second half.

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“There is a lot of pent-up demand from the Chinese to travel, but the problem is how agile we can accommodate them by issuing visas and creating additional flight connectivity,” said Eduardo Santander, CEO of the European Travel Commission. .

London’s luxury department store Harrods is buying stock of tailor-made clothing for the Chinese for the first time since 2019. Michael Ward, general manager, cited the lack of flights as an early hindrance, but predicted an acceleration later this year.

“We are talking about very large numbers if Chinese tourists come back,” he said. “Our outlook has improved twofold: it allows us to return to the country to talk to high net worth individuals and it allows us to bring back old friends we haven’t seen in the UK for years.”

In Japan, where Chinese tourists accounted for 30 percent of pre-Covid outbound arrivals, their return will be crucial to reaching a $37 billion annual target for the industry. Connect some merchants recent strength of the yen From recent multi-decade lows to retail investors betting on an influx of Chinese tourists energizing their buying patterns.

Masaaki Akita, president of the Matsuya department store chain, told reporters this week that the group expects an increase in sales of food and cosmetics, while rival Isetan Mitsukoshi expanded tax-refund counters at its flagship store in Tokyo’s Shinjuku business district in November.

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But with Japan joining countries such as the United States, the United Kingdom, France, Italy and Spain in imposing border controls and compulsory testing on visitors from China, analysts said it could take up to two years for arrivals to restore pre-pandemic levels.

“We’re starting to see affluent Chinese customers coming back, but we’re not expecting the kind of explosive buying for cosmetics we’ve seen in the past,” said a spokesperson for Isetan Mitsukoshi.

In the United States, where China was one of the largest sources of tourist arrivals before the pandemic, businesses have not yet fully recovered. Expedia travel website said that searches for flights from China to the United States rose 40 percent after Beijing’s decision to cancel incoming quarantine rules last week, while inquiries doubled in the other direction.

The speed of the policy reversal, which came even as China was plunged into the worst of the pandemic, surprised onlookers. Michael Yu, a 30-year-old Shanghai office worker, had already arranged a September trip to Italy for a November wedding, despite the restrictions at the time.

“At that time, I expected to reopen in the first half of 2023, but I didn’t expect it to be so soon,” Yu said.

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In many cases, zero Covid rules were effectively rescinded after the easing was announced, well before the Sunday deadline.

When Zhao Xiao, a 26-year-old master’s student in Zurich, returned to Shanghai this week after nearly a year and a half abroad, quarantine rules still applied, but he managed to avoid confinement. He said the police and airport staff weren’t particularly bothered. Only the hotel – an industry that itself suffered from a lack of tourism – was still trying to impose itself.

“the hotel [wanted] A little extra income wherever they can get it.”

Additional reporting by Xueqiao Wang in Shanghai, Oliver Barnes and Arjun Neil Alim in London, Andy Lin, Chan Huh and Gloria Lee in Hong Kong, Andrew Edgecliff Johnson in New York and Kan Inagaki in Tokyo.


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Britain’s Sunak says fighting inflation will require discipline, Reuters

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© Reuters. Reuters / Henry Nichols / Paul

LONDON (Reuters) – British Prime Minister Rishi Sunak has said inflation is not guaranteed to go down this year and his government must be disciplined to ensure it does.

“You have to continue to be disciplined and take the right and responsible decisions in order to bring down inflation,” Sunak said in an interview with BBC Television. “It’s really important that we do that. It’s not something abstract. It affects people.”

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California storm leaves more than 330,000 without power, more severe weather ahead By Reuters

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© Reuters. FILE PHOTO: Capitola Wharf damaged by the storm’s severe waves is seen in Santa Cruz, California, United States, on January 5, 2023, in this screenshot obtained from a social media video. Kelly Pound/via Reuters

(Reuters) – Heavy rains and damaging winds knocked out power to hundreds of thousands of homes and businesses in California late Sunday as the region prepared for the next onslaught of severe weather.

More than 330,000 homes and businesses were reported to still be without power in California as of 3:08 a.m. EDT (8:08 GMT) Sunday night, according to data from PowerOutage.us.

At least six people have died in the bad weather since New Year’s weekend, including a child who was killed by a falling redwood tree and crushing a mobile home in Northern California.

Meanwhile, meteorologists have warned that another “atmospheric river” of thick, moist tropical air will hit California on Monday with mountain rain and snow.

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An NWS weather warning Saturday warned that the cumulative effect of back-to-back heavy rain storms since late December could cause rivers to rise to record levels and cause flooding across much of central California.

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Mercedes expects double-digit growth in India in 2023 despite weak rupee by Reuters

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© Reuters. FILE PHOTO: Various models of Mercedes-Benz cars are parked at the company’s car assembly plant in Chakan, outside Pune, India June 11, 2015. REUTERS/Danish Siddiqui/File Photo

Written by Aditi Shah

NEW DELHI (Reuters) – Mercedes-Benz expects double-digit sales growth in India this year, the head of its domestic unit Mercedes-Benz said in an interview, despite concerns that a weak rupee could push up car prices.

The German luxury automaker’s sales in India rose 41% last year to 15,822 vehicles, an all-time high in the country, and it has a backlog of orders of around 6,000, Santosh Iyer, managing director of Mercedes-Benz India, told Reuters.

He said that one of the risks to the growth of the luxury car market in India is the weakness of the Indian currency, which could force Mercedes to increase domestic prices as the prices of imported components rise.

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The rupee fell 10% against the dollar in 2022, its biggest decline since 2013, making it one of the worst-performing Asian currencies.

“One of the biggest risks we see for us is the exchange rate. With the rupee weakening a bit more, that will lead us to more price increases. And that’s some of the headwinds that we see when it comes to growth potential,” Iyer said.

“But we are starting the year with a very healthy order bank and that gives us confidence of double-digit growth even in 2023,” Iyer said.

Mercedes plans to launch 10 new cars in India in 2023, most of which cost more than 10 million rupees (US$120,000), the high-end segment which grew by 69% in 2022. The new launches will include petrol cars, electric cars and plug-in electrics. – in hybrids.

The company launched three electric cars in India in 2022 including a locally assembled electric model of the S-class sedan. Electric cars have seen strong demand, with Indian customers waiting four to six months after reserving their cars. Iyer wants to reduce this to two to three months before more EVs are launched.

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Electric vehicle market in India is gaining momentum – Renault Reuters reported on Friday that (EPA:) is considering building a mass-market electric vehicle domestically, in a renewed push to a market where sales of these vehicles are expected to grow rapidly from a small base.

local automaker Tata Motors (NYSE::) and foreign players like Stellantis and Hyundai Motor have also launched EVs.

Ayer said Mercedes has seen a decrease in global semiconductor shortages, but it still faces some disruptions due to spare parts shortages and shipment delays due to geopolitical issues, the energy crisis in Europe and pandemic-related lockdowns in various parts of the world.

He predicted that it would take 12 to 18 months for the situation to return to normal.

($1 = 82.5410 Indian rupees)

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