KUALA LUMPUR (Jan 19): The growth of Chinese outbound tourism is expected to continue in 2016, albeit at a slower rate, CLSA said, predicting annual growth rate for the coming five years at 9% compared with 17% in the past five years.

Of the 9% growth, CLSA expects travel numbers to Hong Kong and Macau to grow by 3%, while trips to other locations will grow on average by 16%.

CLSA regional head of consumer and gaming Aaron Fischer said despite the lower growth forecast, departures from China are expected to soar by 104% to 200 million by 2020 from 98 million in 2013.

Improved affordability, easing travel restrictions and increasing desire to travel remain the key drivers underpinning the stellar Chinese outbound tourism growth story, Fischer told a media conference call today.

Citing its proprietary survey of more than 400 outbound travellers, he said experiencing foreign cultures, enjoying nice environments, relaxing, and broadening horizons are increasingly more important goals for Chinese tourists compared to shopping, which has long been the main priority.

"As a result, we are negative on Hong Kong's tourism and retail sectors. A lack of new attractions, increased competition, capacity constraints, a strengthening Hong Kong dollar, tension against Chinese mainlanders and a reduction on import tariffs in China saw inbound Chinese tourist numbers to Hong Kong decline dramatically in 2015," said Fischer.

"Chinese travellers looking for unique cultural experiences are most likely to head to South Korea, Japan, Thailand or the United States (US) in the next three years. South Korea is attractive for its relatively cheap luxury goods and cosmetics, while Thailand offers beaches and other cultural destinations," he added.

According to a CLSA survey conducted in December 2014, respondents ranked Malaysia as the ninth most visited destination in the past three years, citing "nice environment", "experience of foreign culture" and "expand my vision" as the top reasons to visit the country. Malaysia is also ranked the third most popular destination in Southeast Asia, after Thailand and Singapore.

CLSA estimated that Chinese outbound trips to Southeast Asia grew by 41% year-on-year in 2015, the highest compared with other regions like Australasia (24%), North America (15%) and West Europe (8%).

Last year, however, the number of Chinese tourists to Malaysia fell 12% from 2014, accounting for 1% of Chinese outbound tourism.

"Malaysia saw a sharp dip in tourist arrivals from China in the immediate months after the (flight) MH370 and MH17 incidents (in 2014). Some return of confidence has nonetheless been underway, with tourist arrivals from China to Malaysia showing year-on-year improvements since May 2015," said CLSA Malaysia transport and aviation analyst Gan Jian Bo.

Last year, the proportion of Chinese travellers who chose safety as one of the three key factors affecting their destination choice rose by 12 percentage points over 2014 following the twin tragedies.

Malaysia was listed as one of the destinations to avoid in the 2014 survey, but was no longer among the list of places that they wish to avoid in 2015.

"China is the top contributor to global outbound travel, currently comprising 10% of total global outbound travel. We anticipate China's share of the global total to reach 14% by 2020, driving structural growth in the airline, gaming, luggage, retail and internet industries," said Fischer.