Asian travel hotspots may be counting on an ever-growing horde of Chinese tourists for growth, but China's move last week to weaken the yuan may choke off the flow of travelers.
"China's high growth in outbound travel was partially due to a strong renminbi and lower tax in overseas countries," Deutsche Bank warned in a note last week.
"Although travel agencies may bear the higher costs in the short term, we think persistent renminbi devaluation would lead to more expensive outbound packages, which would in turn slow down the explosive growth in outbound travel."
In a move that rattled global markets, the People's Bank of China (PBOC) allowed the yuan - the units of the currency known as the renminbi - to weaken a total of around 3 percent against the U.S. dollar on Tuesday, Wednesday and Thursday amid a shift toward a "managed float" regime. The PBOC set Friday's fixing at a slightly stronger level, which may signal the string of aggressively weaker fixings is finished for now.
But that yuan move may be enough to snuff out Chinese wanderlust, or at least prompt tourists to rein in their overseas shopping jaunts around Asia.
The sheer number of Chinese travelers, as well as the growth in numbers, involved is huge. In the first half of this year, China had around 61.9 million outbound tourists, according to the independent research agency China Outbound Tourism Research Institute, up 12.1 percent from the same period in 2014. Last year, CLSA forecast that the number of mainlanders traveling abroad was expected to hit a whopping 200 million per year by 2020.