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On January 8, 2023, China reopened its borders to travel, ending a three-year lockdown due to the Covid pandemic. Most analysts were predicting an increase in travel, but that didn’t happen. And a year later, the world is still waiting.
But many in the industry say this will be the year regardless. According to Michael Jones, co-founder of China Create Consulting, “2023 was the year of China’s reopening to the world, while 2024 will be the year of outbound tourism consolidation and expansion. “
In reality, they still have no choice but to be optimistic. Let’s see how vital China is for travel.
Before the pandemic, China was the world’s largest outbound tourism market. Chinese tourists accounted for a total of 20% of total foreign tourism spending. They spent about $277 billion in 2018 and $255 billion in 2019. That’s huge.
“Since it is the largest economy in the world, in terms of purchasing power parity, the monetary capacity of the average Chinese citizen particularly contributes (to global sales),” says Alexander Glos, chief executive of China i2i Group.
Will the rebound we expected a year ago consolidate despite everything?
In this story, we will cover:
The surge to China has been impacted by three issues: limited flights, exorbitant prices and difficulties in obtaining visas.
Things are now moving in the right direction.
2023 will be the year of China’s reopening to the world, while 2024 will be the year of the consolidation and expansion of outbound tourism.
China’s foreign seat capacity in December 2023 was just 62% of December 2019 levels, according to aviation analytics firm OAG. But the key is the trend.
“A year ago, we were at about 10% of pre-pandemic levels, and by the end of the year, we were at 62%. At this rate, we will return to the general situation in the near future,” said Oliver Sedlinger. , CEO of China-based tourism marketing consultancy Sedlinger and Associates.
Glos notes that in many destinations, Chinese arrivals are now approaching one hundred percent of pre-Covid levels. The latest insights from Dubai suggest that arrivals from China are already here and will surpass one hundred percent in December and January.
According to Jones, the economic recovery is playing a critical role in the sale of recreational travel, especially as China’s tourism landscape shifts from a prestige ruled by retirees to a broader demographic landscape.
“China has issued over 200 million passports and this is only 13% to 14% of the population. As Chinese become more middle class in their economic capability and behavior patterns, comparable to Europe and North America, the growth in global Chinese travel is guaranteed to continue and accelerate,” Glos notes.
The effect of the pandemic on the overseas travel industry is evident in the registration of new travel-like ventures. In 2019, China recorded a near 10-year high in outbound travel-like startups with 33,500. It declined and even with an uptick, only 26,000 were added in 2023. There are now 118,500 overseas travel-like companies in China.
China outbound tourism is expected to continue to grow in 2024, as foreign visas become more accessible and pre-pandemic flights are restored.
Countries like Thailand, Malaysia, and Singapore, which are waiving or planning to waive visa requirements for Chinese tourists, are among the top destinations based on booking data, notes Boon Sian Chai, managing director and vice president of international markets for Trip.com Group. It’s a point he had highlighted while speaking at the Skift Global Forum East in Dubai in December.
There are many different perspectives and projections on how China’s outbound market will temporarily fully recover. Some experts are more optimistic, others more cautious, but they all agree that the market is very important for global tourism and is making a comeback.
“Search volume for Singapore on our site increased by 80% within an hour of the announcement that China and Singapore would soon put into effect a 30-day mutual visa waiver,” Chai said. “Our foreign hotel and flight bookings in the third quarter are back to approximately 80% of pre-Covid levels. “
As Sedlinger puts it, “There are many differing views and projections on how quickly the Chinese outbound travel market will fully recover. Some experts are more optimistic, others are more cautious — but what all agree on is that the market is crucial for global tourism and that it is coming back strongly.”
Sedlinger is also keen to see which of the recent domestic lifestyle trends and consumption changes will spill over into outbound travel.
An interesting aspect of China’s reopening story lies in its focus on inbound tourism. It has extended the visa-free policy to citizens from six countries — France, Germany, Italy, the Netherlands, Spain, and Malaysia — and established a mutual 30-day visa-free travel arrangement with Singapore.
It’s an unexpected development, according to Jones, who sees it as a “more hands-on program” that demonstrates China’s growing flexibility in inspiring economic recovery.
Visa-related announcements have sparked interest. Trip. com insights show a significant increase in searches for flights to China among travelers from affected countries, according to Chai.
About 214,000 people from these countries entered China in December 2023, an increase of about 28% from November, according to the National Immigration Administration.
Singapore’s search volume on our site increased by 80% within an hour of the announcement that China and Singapore would soon put a 30-day mutual visa waiver into effect.
Last week, China also announced the easing of access restrictions for tourists from the United States. Then came the announcement, through Thai Prime Minister Srettha Thavisin, that China and Thailand agreed to put into effect a permanent visa waiver for citizens of both countries starting in March.
Collaborative efforts between the government and industry players, such as the country’s largest travel agency, Trip. com Group, aim to delight foreign visitors. Initiatives such as “Nihao!” The China Travel Guide program and partnerships with electronic payment service providers highlight China’s efforts to make inbound travel more available and attractive.
Sedlinger highlighted China’s increased efforts to sell tourism, saying, “The product is there, it just wants to be well promoted. “
Highlighting notable trends, Chai points to the rise of “special forces travel” among Gen Z travelers, contributing to the expansion of rural tourism in China.
The preference for Array, along with the expression of independence through exploration, remains strong in China. Glos notes that the Chinese are seeking exclusive reporting domestically, a trend that is expected to move abroad in 2024.
Post-Covid spending patterns reveal a shift towards an experiential spectrum with a greater focus on hotels as an integral component of the overall experience. The classic focus on buying food has been drastically reduced in the budget of the average Chinese person, indicating a transformation in priorities.
The converted face of the new Chinese traveler, as Glos points out, is the youngest, usually in their thirties, known as Free Independent Travelers (FIT).
“By demonstrating a nuanced understanding of global dynamics, those Americans align more strongly with their European and North American counterparts. “
Although Glos notes that the decline of the giant organization was evident in 2023, this year we will see a resurgence of the Array organization.
Consumer behavior that evolved during the pandemic has also replaced the way other people plan and provide their travel experiences.
In recent years, Trip. com Group has expanded its content offerings, such as live-streamed series, ride-sharing space, and the Star Hub channel, which supports spousal marketing activities.
The China Tourism Research Institute estimates that by 2023, the annual volume of domestic tourism will reach 5. 4 billion trips and tourism earnings will reach 90% of the 2019 peak, indicating a strong and.
As of December 2022, China’s domestic tourism accounts for about 15% of pre-Covid levels and foreign tourism about 1% of pre-Covid levels, Glos notes.
Travel is a vital component of the Chinese consumer’s lifestyle. Our projections for 2024 are that the world will not only recover to pre-Covid levels, but exceed 2019 figures by the end of next year.
After October’s National Day holiday, the latest insights suggest that domestic tourism has recovered to around one hundred percent of pre-Covid levels, with domestic spending exceeding pre-Covid levels by around 10-15%.
Reflecting on the tourism boom, Chai notes that domestic hotel bookings in the third quarter of 2023 were up more than 90% year-on-year, while hotel and flight bookings recovered to around 80% of pre-Covid levels.
According to data from Group Trip. com, as of December 15, overall domestic bookings for the New Year holiday have more than tripled compared to last year, with search volumes for domestic flights and hotels exceeding 2019 levels.
In the careful dance of economic recovery, the Chinese consumer has tip-toed through the past year. But as Glos mentions, “Travel is an important part of the Chinese consumer’s lifestyle. Our projections for 2024 are that global travel will not just rebound to pre-Covid levels but will shatter those 2019 numbers by the end of the coming year.”
Get ready for a travel extravaganza, where caution gives way to the exuberant footsteps of a resurgent Chinese wanderlust.
Our daily coverage of the global travel industry. Written by editors and analysts from across Skift’s brands.
Tags: asia monthly, china outbound, china travel, coronavirus recovery, gen z, oag, reopening travel, thailand, trip.com group, visa waiver
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