China's border reopening spurs capital flow, tourism recovery in APAC cities

Five Asian cities made it to the top 20 in Euromonitor’s Top 100 City Destinations Index 2023.

Euromonitor’s Top 100 City Destinations Index 2023 has highlighted a robust representation of Asian cities, with five making it to the top 20 and revealing a significant upswing in tourism and economic activity in Asia-Pacific.

Prudence Lai, Senior Research Analyst at Euromonitor, provided insights into the factors contributing to this trend, particularly focusing on how China's border reopening is benefiting capital flow and tourism in the APAC region.

“It's important to mention the border reopening no doubt is an important context to drive recovery in the APAC region this year. Due to border reopening, capital flows to growing emerging markets in APAC, especially Southeast Asia and Taiwan, boosted up the overall performance in the economic and business factor,” she said.

Lai introduced the Index, which ranks cities based on six pillars: economic and business performance, tourism performance, tourism policy and attractiveness, tourism infrastructure, health and safety, and sustainability. 

She said that the strong showing of Asian cities – Tokyo, Singapore, Seoul, Osaka, and Hong Kong – is attributed to their performance in three key pillars: economic and business factors, tourism performance, and tourism policy and attractiveness.

“China’s border reopening also benefits capital flow that expects to capture this recovery opportunity in the region," Lai noted, adding that Singapore ranks first globally under the economic and business pillar, followed by Taipei and Hong Kong at eighth.

The depreciation of the yen has uniquely boosted the tourism attractiveness of Japanese cities. However, Lai pointed out that APAC cities generally lag in the sustainability pillar, although efforts are being made to enhance sustainable tourism.

Discussing Hong Kong's strategy to regain its status as a leading tourist destination, Euromonitor observed that Hong Kong recorded the largest increase in trips this year. Lai said that this surge is largely attributed to the border reopening of China, as Chinese tourists historically represent over 60% of Hong Kong's inbound arrivals. 

She also mentioned that the "Hello Hong Kong" campaign, led by the Hong Kong Tourism Board, played a crucial role in this recovery, effectively communicating the city's reopening to tourists. The campaign now focuses on reintroducing Hong Kong's culture and uniqueness.

Comparing Hong Kong with other Asian cities in the top 20, Lai emphasized the need for a more aligned and refined plan. While cities like Osaka, Kyoto, Kobe, and Bangkok have developed comprehensive strategies for synergizing their tourist offerings, Hong Kong has yet to fully align with its neighboring cities in the Greater Bay Area. Such alignment is crucial for creating a cohesive experience that enhances the length of stay and spending per trip, thereby fostering high-value tourism.

Lai suggested that Hong Kong could benefit from a more collaborative approach with other cities in the Greater Bay Area, leveraging existing infrastructure and directing tourist flows more effectively.