China's travel industry struggles to rebound

Before COVID hit, China held the top spot for outbound tourists.

China's travel industry struggles to rebound
Travelers take pictures near a Louis Vuitton store at Beijing Daxing International Airport in Beijing, China, April 24, 2023. Reuters/Tingshu Wang

The backstory: Before COVID hit, China held the top spot for outbound tourists, with nearly 170 million Chinese tourists traveling abroad. This brought a massive US$253 billion to the global economy in 2019, according to the China Outbound Tourism Research Institute. But because of the pandemic, things changed. China had some of the strictest COVID measures in the world with its zero-COVID stance, including lockdowns, quarantines, border closures and more.

More recently: Late last year, China began easing up on its zero-COVID policy. This meant borders were opening, and people could start traveling again. But here's some news that might surprise you – according to a recent survey by Dragon Trail International, many Chinese travelers are still not keen on traveling abroad.

In the first week of April, the survey asked over 1,000 mainland Chinese travelers about their holiday and summer travel plans, and 31% of them had zero plans to travel outside of mainland China this year. And the biggest factor in their decision? They're worried about their safety outside of China, which actually beat not having enough money or time.

The development: As China's five-day "golden week" holiday approaches this Saturday, it turns out that most mainland travelers planning to go abroad in 2023 have their sights set on Asia. According to Dragon Trail, 75% prefer to visit Asia, with Europe coming in second place. Hong Kong, Macau and Thailand are at the top of the list. Also, most respondents (a little over 60%) like to keep things simple and book all-inclusive packages.

Aside from safety concerns, the airline industry's recovery in the region is another factor stifling tourism. International passenger volumes on flights leaving China are at just 12.4% of what they were before COVID. And airliners are still restoring routes that were canceled during the pandemic. Air travel leaving the mainland will take about another year to fully recover, according to the Association of Asia Pacific Airlines.

Key comments:

"Chinese travelers need to be confident that traveling activity is safe and they can enjoy a trouble-free experience," said Professor Dimitrios Buhalis, Director of the eTourism Lab and Deputy Director of the International Centre for Tourism and Hospitality Research at Bournemouth University Business School, to TMS. "After a long period of restraining travel, people are understandably nervous about traveling away from China during the pandemic. They will rely on government advice and regulation to satisfy their safety requirements. Not only [will] Chinese outbound tourism market fully recover in the very near future, but we will also experience 'revenge tourism.' Travelers are keen to enjoy all the experiences that they have missed out and will use the savings they accumulated to enjoy life again."

"We don't need this survey to tell us that the recovery of the Chinese outbound tourism market has not yet met the expectations of many destinations," said Sienna Parulis-Cook, director of marketing and communications at Dragon Trail.

"The Chinese tourists we will welcome this year and in the coming years are very different from those who came before," said Wolfgang Georg Arlt, founder and chief executive of COTRI, at ITB Berlin, the world's largest tourism trade fair.

"There has been a lot of news in China about inflation in Europe and high energy prices," said Ying Zhang, a research analyst at the Economist Intelligence Unit.