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Travel and tourism industry in China - statistics & facts

Promising growth, the aftermath of covid-19, key insights.

Detailed statistics

Absolute economic contribution of tourism in China 2014-2029

Share of the GDP of the tourism sector in China 2013-2028

Revenue from tourism in China 2012-2022

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Current statistics on this topic.

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Number of outbound visitor departures from China 2010-2024

International tourist arrivals in China 2010-2021

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Recommended statistics

• Premium Statistic Revenue from tourism in China 2012-2022
• Premium Statistic Growth rate in tourism revenue in China 2012-2022
• Basic Statistic Contribution of China's travel and tourism industry to GDP 2014-2023
• Basic Statistic Number of travel and tourism jobs in China 2019-2033
• Premium Statistic Number of travel agencies in China 2008-2022
• Premium Statistic Tourism revenue during Chinese New Year in China 2017-2024
• Premium Statistic Travel destinations planned by Chinese people for 2022

China's revenue from tourism from 2012 to 2022 (in billion yuan)

Growth rate in tourism revenue in China 2012-2022

Annual change in the tourism revenue in China from 2012 to 2022

Contribution of China's travel and tourism industry to GDP 2014-2023

Travel and tourism industry's share of GDP in China from 2014 to 2022 with a forecast for 2023, by direct and total contribution

Number of travel and tourism jobs in China 2019-2033

Total number of travel and tourism industry jobs in China from 2019 to 2022 with forecasts for 2023 and 2033 (in millions)

Number of travel agencies in China 2008-2022

Number of travel agencies in China from 2008 to 2022

Tourism revenue during Chinese New Year in China 2017-2024

Tourism revenue during Spring Festival in China from 2017 to 2024 (in billion yuan)

Travel destinations planned by Chinese people for 2022

Main destinations of international trips planned for 2022 among people in China as of July 2022, by region

Domestic tourism

• Premium Statistic Number of domestic tourist arrivals in China 2013-2023
• Premium Statistic Quarterly domestic tourist arrivals in China Q4 2019-Q4 2023
• Premium Statistic Expenses of domestic tourists in China 2013-2023
• Premium Statistic Total number of local tourists during Chinese New Year in China 2017-2024
• Premium Statistic Most popular domestic travel destinations of Chinese millionaires 2024

Number of domestic tourist arrivals in China 2013-2023

Number of domestic visitor arrivals in China from 2013 to 2023 (in millions)

Quarterly domestic tourist arrivals in China Q4 2019-Q4 2023

Quarterly number of domestic visitor arrivals in China from 4th quarter 2019 to 4th quarter 2023 (in millions)

Expenses of domestic tourists in China 2013-2023

Expenses of domestic tourists in China from 2013 to 2023 (in billion yuan)

Total number of local tourists during Chinese New Year in China 2017-2024

Total number of domestic tourists during Spring Festival in China from 2017 to 2024 (in millions)

Most popular domestic travel destinations of Chinese millionaires 2024

Leading domestic travel destinations of Chinese millionaires as of 2024

International tourism

• Premium Statistic China's revenue from international tourism 2000-2021
• Premium Statistic International tourist arrivals in China 2010-2021
• Premium Statistic Number of outbound visitor departures from China 2010-2024
• Premium Statistic International tourism spending of Chinese tourists 2008-2021
• Premium Statistic Number of visitors to the U.S. from China 2005-2025
• Premium Statistic Most popular international travel destinations among Chinese millionaires 2024

China's revenue from international tourism 2000-2021

China's revenue from international tourism from 2000 to 2021 (in billion U.S. dollars)

Overseas visitor arrivals in China from 2010 to 2020 with an estimate for 2021 (in millions)

Number of outbound tourists departing from China from 2010 to 2023 with a forecast for 2024 (in millions)

International tourism spending of Chinese tourists 2008-2021

International tourism expenditure of Chinese tourists from 2008 to 2021 (in billion U.S. dollars)

Number of visitors to the U.S. from China 2005-2025

Number of tourist arrivals in the United States from China from 2005 to 2022 with forecasts until 2025 (in millions)

Most popular international travel destinations among Chinese millionaires 2024

Favorite international travel destinations of Chinese millionaires as of 2024

Online travel market

• Premium Statistic Transaction volume of the Chinese online travel booking market 2013-2022
• Premium Statistic Number of online travel booking users in China 2015-2023
• Premium Statistic Penetration rate of online travel booking in China 2015-2023
• Premium Statistic Market share index of leading online travel agencies in China 2019
• Premium Statistic Revenue of Trip.com Group 2012-2022
• Premium Statistic Tuniu's revenue 2014-2022

Transaction volume of the Chinese online travel booking market 2013-2022

Transaction volume of the online travel booking market in China from 2013 to 2020 with estimates until 2022 (in billion yuan)

Number of online travel booking users in China 2015-2023

Number of online travel booking users in China from 2015 to 2023 (in millions)

Penetration rate of online travel booking in China 2015-2023

Penetration rate of online travel booking in China from 2015 to 2023

Market share index of leading online travel agencies in China 2019

Market share index of leading Chinese online travel agencies based on revenues in 2019

Revenue of Trip.com Group 2012-2022

Net revenue of Trip.com Group Ltd. in China from 2012 to 2022 (in billion yuan)

Tuniu's revenue 2014-2022

Revenue of Tuniu Corporation from 2014 to 2022 (in billion yuan)

COVID-19 impact on tourism industry

• Premium Statistic Reasons to not travel long-haul to Europe worldwide 2023, by country
• Premium Statistic COVID-19 coronavirus impact on domestic tourism in China 2020
• Premium Statistic Travel sector employee employment situation during coronavirus pandemic in China 2022
• Premium Statistic Unemployment length in travel sector during coronavirus pandemic in China 2022
• Premium Statistic Expected time of traveling abroad after lifting quarantine restrictions in China 2022
• Premium Statistic Preferred travel destinations after lifting quarantine restrictions in China 2022

Reasons to not travel long-haul to Europe worldwide 2023, by country

Main reasons to avoid long-haul travel to Europe in the next 12 months in selected countries worldwide as of December 2023

COVID-19 coronavirus impact on domestic tourism in China 2020

Loss rate of domestic tourists and travel revenue in China affected by coronavirus COVID-19 pandemic in 1st half 2020 and forecasted loss rate for whole year 2020

Travel sector employee employment situation during coronavirus pandemic in China 2022

Employment status of travel and tourism sector employees during COVID-19 pandemic in China as of February 2022

Unemployment length in travel sector during coronavirus pandemic in China 2022

Unemployment length among those who lost their jobs in tourism sector during COVID-19 pandemic in China as of February 2022

Expected time of traveling abroad after lifting quarantine restrictions in China 2022

Expected time frame before traveling abroad for leisure after lifting quarantine restrictions in China as of October 2022

Preferred travel destinations after lifting quarantine restrictions in China 2022

Leading leisure travel destinations among international travelers when all quarantine restrictions are lifted in China as of October 2022

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China’s Travel Economy Is Slowly Coming Back. Here’s Where It Stands.

Over a year after China opened its borders following the pandemic, international trips are still lagging, although domestic travel is more popular.

By Tiffany May

Reporting from Hong Kong

Since China reopened its borders in 2023 after three years of Covid isolation, domestic travel has thrived and high-speed rail has grown increasingly popular. But international trips in and out of the country are lagging, and flight capacity is still just two-thirds of prepandemic levels.

The economic stakes are high. Before the pandemic, Chinese travelers were the world’s biggest spenders, accounting for 20 percent of global tourism spending, according to the United Nations World Tourism Organization.

In the past year, the Chinese authorities have tried to spur more inbound travel. Among the changes: China has waived travel visas or agreed to extend the length of visa-free travel for visitors from eight countries, including Germany and France.

The main factor holding back international travel by Chinese will continue to be China’s economy. Growth has bounced back from the pandemic, but the weight of a severe real estate downturn has dampened consumer spending and confidence inside China. And global geopolitical tensions remain a wild card. China is engaged in trade disputes with the United States and Europe, home to many major multinational companies. As they think twice about their business in China, travel suffers.

Here’s what to know about the state of China’s travel economy.

Travel to China ground nearly to a halt in the pandemic. It won’t fully recover until 2025.

Throughout the pandemic, China enforced some of the strictest travel rules in the world. Overseas travelers who managed to enter the country sometimes had to quarantine at their own expense for as long as two months.

As of December, international flight capacity — essentially the number of available seats on flights coming from and going to China — was only 62 percent of what it was in December 2019, according to OAG, a flight data analytics firm. But domestic travel has picked up: Over the 3-day weekend at the end of last month, the number of those fliers exceeded prepandemic levels by nearly 10 percent.

At the start of last year, there were only about 500 international flights every week in China, according to the Civil Aviation Administration of China, the aviation regulator. Now there are about 4,600, and that number is expected to increase to 6,000 by the end of the year — about 80 percent of prepandemic levels.

A big test will come next month during the spring festival around the Lunar New Year, typically a heavy travel period when millions of workers travel to their hometowns. Chinese airlines will schedule 2,500 additional international flights to accommodate spring festival visits, China’s aviation regulator said last week.

China’s transport officials said they expected 480 million rail trips to be made during a 40-day travel surge around the spring festival in the weeks before and after the Lunar New Year, a nearly 40 percent increase from last year.

High-speed rail has become a more popular way to travel within the country. China State Railway Group, the national rail operator, said rail trips exceeded 20 million at the start of the Golden Week holiday in October, a high, and the average daily number of passenger trips throughout the year exceeded 10 million.

Most analysts said they believed that the full recovery of international travel wouldn’t happen until 2025.

In a January research note, economists at Nomura, a Japanese bank, said the pace of the sector’s recovery would largely be determined by how much Chinese travelers were willing to spend. Pandemic-era problems like delays in issuing visas and passports that lasted through 2023 have been addressed.

“While supply-side constraints eased, the demand-side drag is now starting to kick in, and sizable headwinds remain for China’s outbound tourism recovery in 2024 and possibly 2025,” the Nomura economists wrote.

Applying for a visa and visiting China are a bit less complicated.

In December, China started allowing visitors from France, Germany, Italy, Spain, Malaysia and the Netherlands to travel for 15 days without visas, a change it said would last through November 2024. China’s National Immigration Administration said 147,000 visas had been granted in the first six and a half weeks of the program. China also reached agreements to make visa-free travel more accessible for tourists from Thailand and Singapore.

For Americans, visa applicants will no longer need to submit documents such as hotel booking records, an itinerary or an invitation letter. The authorities have also cut all visa application fees by 25 percent until the end of the year.

It has also gotten easier for foreigners to pay for things when visiting China. Last July, the main payment platforms, WeChat Pay and AliPay, said they would support foreign credit cards and allow visitors to pay like locals. China has moved away from paper money and coins , a trend that accelerated during the pandemic.

Flights between China and the United States have been only slowly restored. Before the pandemic, there were more than 300 flights every week between the two countries. That number was 36 a week in September and has gradually increased. In November, the countries agreed to increase flights to 70 a week.

Geopolitical tensions and reluctant Chinese travelers could derail the sector’s recovery.

The fraught Chinese-U.S. relationship will continue to lurk in the background of international travel to China.

The U.S. State Department maintains a “Level 3” travel alert on China, warning Americans to “reconsider travel” to the country because of “the risk of wrongful detentions,” among other reasons.

China’s Ministry of Foreign Affairs has its own travel notice, warning that travelers to the United States have been “harassed and interrogated” at the border with “various excuses,” and that Chinese citizens have been arbitrarily arrested and prosecuted.

The changing tastes and expendable income of Chinese travelers could shape how the travel economy’s recovery plays out.

“As Chinese households become more price-sensitive and rational, domestic tourism is more preferred, given that it usually takes less time and money,” said Ying Zhang of the Economist Intelligence Unit, a research business.

Tiffany May is a reporter based in Hong Kong, covering the politics, business and culture of the city and the broader region. More about Tiffany May

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China’s Tourism Sector Prospects in 2023-24

Amid the post-pandemic recovery, China’s tourism sector is rebounding with vigor in 2023. We discuss the resurgence of outbound and domestic travel, evolving traveler behavior, and tech-enabled trends in this article. From cultural exploration to wellness escapes and digital integration, the stage is set for foreign businesses and investors to seize opportunities in this transformed landscape.

After enduring the significant impacts of the COVID-19 pandemic, China’s tourism sector is gearing up for a strong resurgence in 2023. Projections indicate that the total revenue from domestic tourism is expected to exceed RMB 4 trillion (approximately US$580.96 billion), marking an impressive 96 percent growth. Several driving forces contribute to this revival in China’s tourism landscape, including:

• Easing of travel restrictions;
• Increase in disposable income among Chinese consumers; and
• Growing popularity of domestic tourism.

In particular, the government’s support in revitalizing the tourism sector is evident through subsidies and tax exemptions provided to tourism enterprises. The robust resurgence of China’s tourism industry also serves as a positive indicator for the nation’s economy, with tourism being a significant driver of economic growth and expected to contribute notably to the country’s GDP. Overall, 2023 has seen a continuous stream of new policies, products, technologies, concepts, trends, and opportunities impacting the tourism industry.

China’s evolving tourism landscape

Insights from outbound tourism in h1 of 2023.

Both outbound and inbound tourism markets in the first half of 2023 have shown impressive vitality, surpassing the levels observed in the same period of 2019. Average expenditures for outbound travelers have exhibited a notable increase, with Hong Kong and Macao leading the resurgence of outbound tourism. The total number of inbound and outbound individuals has surged by approximately 170 percent.

Data from the World Tourism Alliance’s reports, reveal that the outbound tourism sentiment index reached 28 percent in the first half of 2023, marking a 21-point increase from the same period in 2019. The outbound tourism market has displayed a gradual “U-shaped” recovery, emphasizing a steady resurgence rather than an abrupt rebound.

According to recent data from Alipay’s Overseas Spending Platform, the average expenditure per user for outbound travel in the first half of 2023 grew by 24 percent compared to 2019. Among popular destinations, the top 10 outbound travel destinations in terms of transaction volume for the first half of 2023 were:

• South Korea;
• United Kingdom; and

This data is supported by several favorable policies. Since the beginning of the year, the National Immigration Administration has continuously optimized and adjusted inbound and outbound management policies.

Starting from February 20, 2023, mainland cities within the Greater Bay Area initiated a pilot implementation of visa endorsements for cross-border talent to and from Hong Kong and Macao. On May 15, 2023, policies such as the nationwide implementation of group travel endorsements for mainland residents traveling to Hong Kong and Macao were fully restored.

The streamlined and optimized policies for travel to Hong Kong and Macao prompted provinces across the mainland to organize multiple tour groups, leading to a consistent rise in mainland visitors to these regions. According to data released by the Hong Kong Tourism Board, nearly 13 million visitors arrived in Hong Kong in the first half of 2023, of which approximately 10 million were mainland visitors, accounting for around 77 percent of the total.

Furthermore, based on recent data released by the National Immigration Administration, the first half of 2023 witnessed a total of 168 million inbound and outbound individuals passing through China’s immigration, marking a year-on-year increase of 169.6 percent.

At the same time, approximately 42.798 million entry and exit permits for travel to and from Hong Kong, Macao, and Taiwan were issued, indicating a significant 1509 percent increase compared to the same period in 2022.

These figures further underline China’s promising revival in outbound tourism. Indeed, Chinese tourists have once again become a significant force driving global tourism and offline consumption.

In terms of outbound travel numbers, the top 10 departure cities were: Shenzhen, Shanghai, Guangzhou, Beijing, Hangzhou, Foshan, Dongguan, Zhuhai, Chengdu, and Wuhan. This highlights that outbound travel is mainly concentrated in first-tier and new first-tier cities, with the “Guangzhou-Shenzhen-Foshan-Dongguan-Zhuhai” Greater Bay Area cities also playing a pivotal role in outbound tourism.

The primary reason driving Chinese tourists to travel abroad is leisure, with business and visiting friends and relatives (VFR) as the subsequent motivations. The rapid expansion of outbound tourism from China can be attributed to the rising incomes of the middle class , the growing desire among Chinese travelers to explore diverse countries and cultures, and the ease of obtaining visas and fulfilling entry criteria for various destinations.

Moreover, the retail sector captures the largest portion of Chinese tourists’ spending when traveling abroad and is anticipated to retain its dominant position in terms of outbound tourism expenditure over the projected timeframe.

The steady recovery of outbound tourism

Initial expectations for a robust rebound in outbound tourism this year have encountered a more precarious reality. Notable evidence of this transformation is seen in the changing preferences of Chinese leisure travelers. As reported by CNBC, the desire to travel abroad has surged from 28 percent to 52 percent among Chinese leisure travelers since last year, nearly doubling.

Business travel intentions have tripled, and interest in education, family visits, and medical tourism abroad is also on the rise. Other findings align, revealing that 50 percent of Chinese travelers plan to journey internationally within the next year.

A significant shift has also occurred in travel fears, particularly concerning Covid contraction. While it topped travelers’ concerns in 2022, it has diminished to the least worrisome aspect this year, as per Morning Consult’s survey. This shift reflects growing traveler confidence. Factors influencing this gradual recovery go beyond preferences. A recent report from the Mastercard Economics Institute reveals a shift in Chinese residents’ spending patterns.

Known for their shopping inclination, there’s a rising trend toward investing in experiences over possessions, particularly in a zero-Covid environment. Despite global economic uncertainties, Asia-Pacific’s, including China’s, travel recovery remains steady. As travel capacity grows, costs are anticipated to decrease, fueling a more dynamic travel landscape.

Contrary to an instant “boom,” China’s international travel revival is unfolding steadily. Though not as swift as initially projected, the evolving interests, changing attitudes, and gradual shift toward experiential spending all point to a growing and adaptive outbound tourism sector, offering a promising glimpse into the future.

The Chinese government’s recent efforts to revive outbound group travel

China’s Ministry of Culture and Tourism recently expanded outbound group tour destinations, including popular places like Japan and the US. A recent analysis provided by the EIU indicates that this move will aid global tourism recovery, benefiting countries with simplified visa procedures.

While the relaxed restrictions will moderately boost outbound tourism, obstacles and cautious spending persist. Nonetheless, domestic travel agencies are expected to see increased revenue, leading to employment and income growth in the sector.

However, challenges such as limited flights and labor shortages could hinder outbound tourism’s full recovery. A complete relaxation of restrictions is predicted in late 2023, but pre-pandemic outbound levels might not return until 2025.

Domestic tourism is thriving

In the first half of 2023, domestic tourism revenue (total tourist spending) reached RMB 2.3 trillion (approx. US$318 billion), marking a substantial increase of RMB 1.12 trillion (approx. US$155 billion) compared to the previous year. Notably, urban residents’ expenditures on travel accounted for a year-on-year surge of 108.9 percent, while rural residents’ travel spending grew by 41.5 percent.

The remarkable rebound of China’s domestic tourism sector can be attributed to a set of factors that differentiate it from the relatively slower recovery of outbound tourism. For one, the domestic tourism industry appears to be less affected by uncertainties surrounding employment and income growth compared to other service and retail sectors.

This is primarily due to the strong yearning of Chinese consumers to explore after years of mobility limitations imposed by the pandemic.

On the other hand, the prolonged revival of outbound flights has further bolstered the domestic tourism scene. Many individuals redirected their travel plans within China as international travel remained limited.

Notably, the return of international air traffic to approximately 80 percent of pre-pandemic levels is not expected until the fourth quarter of 2023, which creates a favorable environment for the vigorous resurgence of domestic tourism in the meantime.

Changing Chinese travelers’ preferences in 2023

In the wake of the COVID-19 pandemic and the subsequent travel restrictions, Chinese travelers underwent a transformation in their preferences and behaviors. Over the past three years, while international travel remained limited, domestic exploration thrived.

Around 8.7 billion domestic trips were taken, indicating an annual rate of around 50 percent of pre-pandemic levels. This period allowed the domestic market to mature, and travelers became more sophisticated in their pursuits, engaging in various new leisure experiences such as beach resorts, skiing trips, and city “staycations.”

As a result, the post-COVID-19 Chinese traveler exhibits distinct traits: heightened digital savvy, elevated expectations, and an appetite for novel experiences. These characteristics paint the profile of a typical Chinese traveler in 2023:

• Experiences matter: Survey data reveals that the rejuvenated Chinese tourist is driven by experiential travel. While outdoor and scenic trips remain popular, the preferences have evolved. Sightseeing and culinary experiences, highly valued in the initial survey series, are now joined by a growing interest in culture and history, beaches, and resorts, as well as health and wellness. This shift solidifies the trend towards experience-driven travel. Additionally, activities like skiing and snowboarding have gained popularity, possibly influenced by the 2022 Beijing Olympic Winter Games .
• Digital expert: Chinese travelers are among the world’s most digitally adept consumers, easily integrating mobile technologies and social media into their daily lives. The pandemic further propelled their online engagement. Short-form videos and livestreaming have emerged as dominant online entertainment options.
• Curious: The desire to explore novel experiences in unfamiliar destinations remains strong among Chinese travelers. Despite travel radius limitations imposed by policies, survey respondents express eagerness to visit new attractions. Instead of revisiting familiar places, 45 percent of participants prioritize short trips to new sites, while long trips to new destinations are the second most favored option.

Emerging trends and destinations

Cultural and heritage tourism.

A significant shift in China’s tourism landscape is the increasing emphasis on cultural tourism, where traditional heritage seamlessly intertwines with contemporary travel. As the nation preserves and celebrates its abundant historical and cultural treasures, a surge in cultural tourism activities like immersive experiences and interactive exchanges has taken center stage.

This trend is particularly pronounced in the realm of domestic tourism, where travelers are flocking to heritage sites and cultural landmarks to gain a deeper understanding of China’s rich heritage.

Moreover, the development of cultural and tourism industries constitutes a crucial component of China’s cultural confidence-building efforts. This sector has received significant attention from the government, evidenced by policies like the “14th Five-Year Plan for Cultural Development” and the “14th Five-Year Plan for Tourism Industry Development.” Such policies drive the integration of culture and tourism, increase the supply of cultural tourism products, and enhance the quality of such offerings.

Wellness tourism

In 2023, a remarkable shift in travel preferences among Chinese tourists has propelled wellness and health tourism to the forefront. As observed by Rung Kanjanaviroj, Director of the Tourism Authority of Thailand’s Chengdu office, Chinese travelers are displaying a distinct preference for destinations that offer a blend of sunny beaches and holistic well-being experiences.

This evolving trend has prompted destinations like Thailand to proactively adapt by refining their offerings. Through the enhancement of health tourism services and a focus on engaging student and youth travelers, Thailand has positioned itself as a prime destination for those seeking rejuvenation and self-care during their journeys.

The rise in wellness and health tourism reflects a broader shift in Chinese travelers’ priorities, as they seek destinations that not only provide scenic beauty but also nurture their physical and mental well-being.

Tech-enabled tourism in China’s innovative travel landscape

China’s tourism industry has evolved dramatically through the fusion of technology and changing consumer demands. In 2023, the landscape is marked by a growing emphasis on tech-enhanced experiences that cater to modern travelers’ evolving preferences that foreign businesses and investors in the sector can learn from.

• Smart appliances and IoT integration: China’s tech-driven tourism trend showcases the integration of smart appliances and the Internet of Things (IoT) into the travel journey. Travelers now wield the power to personalize their environment and encounters via smartphone apps. Innovations range from smart hotel rooms adjusting lighting, temperature, and ambiance to IoT-enabled transportation providing real-time updates, enhancing comfort and efficiency.
• Virtual and augmented reality immersion: Tech-savvy Chinese travelers are increasingly seeking immersive encounters. Virtual and augmented reality (VR/AR) have taken center stage, enabling tourists to explore historical sites, cultural landmarks, and natural marvels through virtual tours that breathe life into destinations. This not only enhances engagement but also serves as a potent tool for destination marketing.
• Seamless contactless services and digital payments : Contactless services and digital payments have become integral to China’s tech-enhanced tourism scene. Travelers can navigate touchpoints like check-in, security, dining, and shopping with minimal physical interaction. QR codes have revolutionized payment methods, enabling transactions through smartphones, and eliminating the need for physical currency or cards, in alignment with the country’s cashless society drive.

The city of Hangzhou offers a glimpse into the future of tech-enabled tourism. Hangzhou’s West Lake, a UNESCO World Heritage site, now features interactive kiosks that provide historical context, virtual guides, and navigation assistance to visitors. These digital enhancements blend seamlessly with the serene natural landscape, enriching the cultural experience.

Similarly, the China National Tourist Office uses VR to transport potential travelers to iconic destinations. Through immersive VR experiences, individuals can virtually explore the Great Wall, the Terracotta Army, and other renowned sites, sparking wanderlust and encouraging travel planning.

Preparing for the return of Chinese tourists to the international scene

The gradual easing of travel restrictions in China still presents a promising avenue for the recovery of the international travel and tourism sector. Amid this positive outlook, attracting Chinese tourists is becoming a priority for global businesses.

Chinese travelers, known for their enthusiasm to explore beyond their borders, are now seeking immersive experiences, quality accommodation, and exceptional service. Here are some strategies that foreign businesses can employ to entice and captivate the adventurous Chinese traveler.

Crafting authentic and familiar experiences

After a three-year hiatus from overseas travel, Chinese tourists are now yearning for high-quality experiences in familiar destinations.

They are looking beyond traditional shopping and sightseeing, expressing a keen interest in entertainment and experiential offerings. Theme parks, cultural activities, water sports, snow sports, and shows are among the sought-after activities.

The key is to offer authentic experiences that resonate with Chinese travelers’ desires for immersion, while still maintaining a touch of familiarity.

Businesses should leverage deep customer insights to design offerings that strike a balance between accessibility and authenticity, ensuring a comfortable yet exciting experience.

Harnessing the power of social media

Social media, particularly short videos, has emerged as a pivotal source of travel inspiration for all age groups. Tourist destinations have capitalized on this trend by launching engaging short video campaigns, maximizing exposure and engagement.

The burgeoning trend of city-walking , for example, where urban exploration is undertaken solely on foot, has not only captured the attention of locals but has also made significant waves across various social media platforms. Chinese netizens are embracing this form of experiential travel, and businesses can leverage social media to align with their preferences.

Platforms like Douyin, China’s counterpart to TikTok, have witnessed the rise of “city-walk content”. A recent video showcasing city-walk routes in Guangzhou amassed over 171,000 likes and found its way into the favorites of 72,000 viewers.

Furthermore, Xiaohongshu, a prominent lifestyle-sharing platform in China, reported a remarkable 30-fold increase in searches related to city walk during the first half of 2023 compared to the previous year.

Businesses can leverage social media platforms to connect with potential Chinese tourists, employing captivating content and innovative campaigns to pique their interest. Creating a strong presence on platforms like TikTok and engaging with influential figures can significantly boost visibility.

Collaboration with Internet giants

China’s tech-savvy travelers are deeply intertwined with the digital world, and internet giants like WeChat and Alipay play a pivotal role in their daily lives. Foreign businesses can tap into these existing digital ecosystems rather than starting from scratch.

For instance, Amsterdam’s Schiphol Airport offers a WeChat Mini Program providing information about the airport, including duty-free shopping and travel planning. Alibaba’s Alipay, renowned for its mobile payment capabilities, has partnered with tax refund agencies to streamline the tax refund process for Chinese travelers.

Such digital innovations enhance convenience and are fast becoming an expected norm.

Prioritize direct-to-consumer (D2C) channels

Navigating China’s intricate travel distribution landscape can be complex, as it encompasses diverse channels, such as online travel agencies (OTAs), online travel portals (OTPs), and traditional travel agencies. To make the most of this landscape, businesses can consider embracing D2C channels.

By leveraging social media platforms and official brand platforms, businesses can create a compelling value proposition that resonates with Chinese travelers. Investing in D2C channels not only enhances branding but also facilitates direct engagement with potential tourists, allowing for a personalized and enticing approach.

Key takeaways: Navigating China’s tourism resurgence

All in all, in 2023, China’s tourism is making a strong comeback, driven by key trends that reveal changing traveler preferences.

Domestically, easier travel rules and higher incomes are fueling local exploration. Internationally, outbound tourism is gradually recovering with a focus on immersive experiences, wellness, and cultural discovery.

Chinese travelers are becoming more tech-savvy, seeking out tech-enhanced experiences like virtual reality tours. This shift is boosting cultural, heritage, and wellness tourism.

Social media, especially platforms like TikTok and WeChat, are vital for engaging with Chinese travelers effectively.

In essence, China’s tourism resurgence is multifaceted, with travelers seeking enriched experiences, digital engagement, and authenticity.

Businesses that align with these preferences and capitalize on domestic and international opportunities are likely to thrive in the evolving travel landscape.

China Briefing is written and produced by Dezan Shira & Associates . The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at [email protected] .

Dezan Shira & Associates has offices in Vietnam , Indonesia , Singapore , United States , Germany , Italy , India , Dubai (UAE) , and Russia , in addition to our trade research facilities along the Belt & Road Initiative . We also have partner firms assisting foreign investors in The Philippines , Malaysia , Thailand , Bangladesh .

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China Air Travel Recovery Drives Global Demand to Near Pre-Pandemic Levels

Edward Russell

October 4th, 2023

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The return of China’s domestic travelers helped drive the global air travel recovery a tick closer to pre-pandemic levels, new data from trade group IATA shows.

Airline passenger traffic, measured in revenue per available seat kilometers (RASK), was 95.7% of 2019 levels during August, according to IATA. That is up 0.1% from July, and the closest to pre-pandemic levels that it has been since the crisis began. Traffic jumped 28.4% year-over-year.

The return of Chinese domestic travelers, who were largely absent from the recovery a year ago due to the country’s zero-Covid policy, drove the increase. Domestic traffic in China nearly doubled compared to last year, up 94% in August.

But globally, the main story continues to be the return of international travelers. International traffic increased 30% year-over-year in August, and stands at 88.5% of 2019 levels, IATA data show. North American airlines filled the greatest percentage of their international seats during the month.

“For the year to date, international traffic has increased by 50% versus last year, and ticket sales data show international bookings strengthening for travel in the last part of the year,” IATA Director General Willie Walsh said.

Walsh’s comments fit with the outlook painted by major international longhaul carriers. Delta Air Lines and United Airlines have both said they see international demand, particularly to Europe, staying robust longer into the fall — in other words into October — than it has historically. And Emirates President Tim Clark in June said the airline was “full” for the next nine months , or into early 2024.

Many longhaul airlines are looking to Asia as travelers surge back to the region after lengthy Covid travel restrictions. Some Asian countries, most notably China but also Japan, maintained Covid-era travel restrictions until late last year or early this year. But limits on airline capacity, including the geopolitical situation capping U.S.-China flights at artificially low levels, have taken longer to come off, leaving significant pent-up demand to the region that is expected to continue into 2024.

One thing to watch: Where domestic demand goes after August. U.S. budget carriers, including Breeze Airways , Frontier Airlines, and Spirit Airlines , have all reported weakening post-summer demand in the price-sensitive end of the market. That, without a commensurate return in corporate travelers, could mean the global air travel recovery could slow or even fall back this autumn.

Tags: Africa , Asia-Pacific , Europe , Latin America , Middle East , North America

Photo credit: The departure concourse at Shanghai's Pudong airport.  Flickr / Damien Walmsley

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China Sees Robust Travel, Tourism Demand During New Year's Day Holiday

China Sees Robust Travel, Tourism Demand During New Year's Day Holiday

FILE PHOTO: People pose for pictures at a tourism attraction in Beijing, China, October 17, 2023. REUTERS/Tingshu Wang/File Photo

BEIJING (Reuters) - Travel in China flourished over the three-day New Year's holiday, with 135 million domestic tourist trips, up 155% from last year, while domestic tourism revenue rose to 79.73 billion yuan ($11.23 billion), data released Monday showed.

During the New Year holidays, more than 128 million passenger trips were made on China's transport network, up 78.4% from 2023 and 33.1% from 2022, according to Ministry of Transport figures reported by state media.

The number of railway passenger trips surged 177.5% year-on-year, and air passenger trips jumped 140.3%, the Global Times reported.

Cold weather across large parts of the country did not deter people from flocking to music festivals and concerts, while group outings of families increased, the government said, adding that the popularity of ice and snow leisure in East China, Central China, South China and other places had increased.

Provinces in the north such as Heilongjiang took advantage of wintry cold, promoting ice and snow tourism and extending the operating hours of key scenic spots, subways and buses, the ministry of culture and tourism said.

Beijing also gave out vouchers to help stimulate holiday demand and spur the economy, as urban ice and snow-themed projects and theme parks have become increasingly important drivers of economic revenue for many cities.

From Saturday to Monday, passenger trips by air were likely to reach 5.19 million trips, 140.3% higher year on year, while journeys on highways and waterways are expected to jump by 46.1% and 72.9% respectively, according to the Ministry of Transport, as reported by state media outlet Xinhua.

($1 = 7.0978 Chinese yuan renminbi)

(Reporting by Bernard Orr and Shanghai newsroom; Editing by Gerry Doyle)

Copyright 2024 Thomson Reuters .

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Tourists visit Nakeli Village in Pu'er in southwest China's Yunnan Province, June 28, 2022. /CFP

The vitality of China's travel market is spurred by recent favorable policies and summer travel demand, sending a signal that the economy is gradually improving.

Summer is often a peak travel season. While the impact of the pandemic wanes, multiple favorable policies and demand increases have accelerated the travel sector's recovery.

As of June 24, most parts of China have resumed inter-provincial travel. Shanghai restarted group tours from the start of July after a three-month suspension in containing a resurgence of COVID-19 cases.

The gradually easing of restrictions boosts confidence in the summer travel market while at the same time providing some policy certainty, said Cheng Chaogong, a senior researcher at Tongcheng Research Institute, a think tank with the travel agency Ly.com.

Based on high policy certainty, Tongcheng Research Institute predicts that the summer tourism market will embark on the recovery track in 2022. It also expected a strong rebound in the parent-child tourism segment.

Tourists visit Yangzhou China Grand Canal Museum in east China's Jiangsu Province, June 29, 2022. /CFP

Data from Ly.com shows that tickets sale for domestic tourist attractions rose 44 percent in the first half of June from the second half of May.

Shanghai Disneyland reopened on June 30, and ticket sales to the resort jumped 42 percent on the day from the same time in March on the booking website Fliggy.com.

The broader metrics also portray a brightening picture. China's June official purchase managers index for the service sector returned to expansion after three months of contraction. Among the sub-categories, rail and air travel performed exceptionally.

China halved quarantine time for inbound travelers on June 28. Online inquiries and bookings for travel surged on the news. Travel booking website, Qunar.com shows that an hour following the announcement, the search volume of international air tickets doubled, reached the peak of outbound air ticket searches on the platform over the last two years.

China also removed the asterisk on the travel code a day later to facilitate mobility. The mark indicated a person's travel history involving an area with COVID-19 infections. Qunar data shows that the search volume for hotels doubled within 30 minutes of the announcement, and the search volume for train tickets increased by 1.5 times.

Travel sector insiders are cautiously optimistic about the recent development. Slashing quarantine time and removing the asterisk from travel history has undoubtedly facilitated mobility and came as specific measures in stabilizing economic growth while guarding against the epidemic, Li Xinjian, executive dean of the Capital Institute of Culture and Tourism Development of Beijing International Studies University told Cailianshe, a Chinese media outlet.

Tourists visit Huai'an Crystal Palace Beluga Water Park in east China's Jiangsu Province, July 3, 2022. /CFP

China is expected to see 520 million railway trips during the summer travel rush from July 1 to August 31, data from China State Railway Group Co. showed.

Rather than retaliatory consumption, there will be compensatory consumption, said Cheng. He expects the overall number of tourists in July and August to recover to more than 70 percent of the same period in 2019. Business travel and family visits will perform better than vocational trips, he added.

Catering to the overall deployment of the State Council's 33 measures to stabilize the economy , various localities have introduced policies to promote consumption in the cultural and tourism sector.

It is expected that new consumption hot-spots like E-sports hotels and the camping craze will thrive in the summer tourism market this year, while the night tour market and weekend micro vacations will be the highlights of summer travel market, said Cheng.

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Airlines keep capacity tight despite boom in China travel demand

BEIJING – The world’s airlines are taking a cautious approach to China’s reopening, reluctant to immediately change up schedules and divert planes from other routes despite the internal pent-up demand for international travel.

Scheduled flights into China during January, February and March are up no more than 2.9 per cent this week compared to last week, according to aviation data provider Cirium. That is fewer than 100 more flights each month.

Planned inbound services for the remainder of the year are little changed – a sign that China’s relaxation of quarantine restrictions from Jan 8 are yet to convince airlines to make significant changes to their timetables.

“I don’t think airlines will shift capacity from what they’re doing now in China,” said Mr Subhas Menon, director-general of the Association for Asia Pacific Airlines.

Most will rather wait to assess the situation, with Hong Kong, which also recently did away with many Covid-19 restrictions, being a useful testbed, he said.

Carriers’ lukewarm reaction to news that China will from early next year no longer subject inbound travellers to quarantine does not chime with the intense desire for overseas travel from people living in Asia’s biggest economy, most of whom have all but been locked in for the past three years.

Prior to the pandemic, China had a massive outbound travel market.

Mainland residents reacted swiftly to Monday’s news with bookings for outbound flights surging by 254 per cent on Tuesday morning versus the same period the day prior, Trip.com Group data show.

The top five destinations were Singapore, South Korea, Hong Kong, Japan and Thailand. Flight bookings to Singapore jumped 600 per cent, while bookings to the remaining four destinations soared around 400 per cent.

Airlines in those countries, however, were not rushing to add capacity.

Singapore Airlines said it will “continue to monitor the demand for air travel and adjust capacity accordingly”.

The national carrier will reinstate its Singapore-to-Beijing passenger service on Fridays from Dec 30, on a fortnightly basis. This comes three months after SIA reinstated flights from Beijing to Singapore on Sept 27. These flights operate every Tuesday and Friday.

Hong Kong’s Cathay Pacific Airways welcomed the announcement and said it will “continue to communicate with relevant authorities and increase our passenger capacity to and from the Chinese mainland as much as possible”.

Korean Air Lines said it plans to increase flights to China after the two countries mutually agreed to boost connectivity. Even though China has lifted quarantine rules, there is still a travel ban on group tours to South Korea that has been in place since 2017 – retaliation from China in response to a US-led deployment of an anti-missile shield in South Korea known as Thaad.

Korean Air currently operates nine flights a week to seven cities in mainland China and will boost that to 15 flights to nine cities starting from January, with the two additional cities being Shenzhen and Xiamen on top of Shenyang, Shanghai, Guangzhou, Dalian, Qingdao, Tianjin and Nanjing.

“There aren’t that many inquiries from Chinese, or from Koreans, for travel packages yet,” said director Yook Hyun-woo from Modetour Networks, a major travel agency in Seoul. “We’re still worried that a resurgence of the virus during winter may cool demand.”

A Japan Airlines spokesman said it was unfortunate that the country had strengthened its border measures for China, but noted that the carrier would act in accordance with government guidance.

Japan said earlier this week it will require a negative Covid-19 test result for travellers coming from China after case numbers there exploded and asked airlines not to increase the current number of flights. ANA Holdings said it is watching the situation closely.

Travellers from China made up nearly one-third of the 32 million visitors that flocked to Japan in 2019, prior to the pandemic.

Qantas Airways in Australia, another popular destination for Chinese tourists, said it would “keep customers updated about any plans we have to recommence flights into China”.

Other foreign carriers, meanwhile, remain limited by lingering pandemic curbs in terms of what capacity they can add back to China.

US airlines were restricted on the number of flights they could operate to China under an agreement between Chinese authorities and US Department of Transportation that dates to 2020 when the pandemic upended aviation. That accord would have to be modified for them to expand their China capacity.

United Airlines Holdings is “currently evaluating the market demand and operating environment to determine when it’s right for us to resume additional flight operations to mainland China”, spokesman Joshua Freed said. United currently flies between San Francisco and Shanghai four times a week.

Delta Air Lines said it had no changes to announce for its China service. The airline has been flying to Shanghai from Detroit and Seattle with a stop at Incheon International Airport in South Korea for crew changes. American Airlines Group did not immediately respond to a request for comment. American Airlines currently operates twice-weekly flights from Dallas Fort Worth International Airport to Shanghai with a stop in Seoul.

Deutsche Lufthansa said it looked forward to increasing capacity and remains “committed to this important market”. The German group currently operates 17 weekly flights from Europe to Chinese gateways including Beijing, Shanghai and Hong Kong.

Starting from Jan 16, Austrian Airlines will add one more weekly flight from Vienna to Shanghai.

International airlines will also be seeking clarification around aircrew and whether they are able to stay overnight in China now that quarantine has been dropped. Currently, many international carriers have to fly into China, drop off passengers and then fly to Seoul for the crew to spend the night there before flying back to China the next day to pick up fresh travellers for an onward overseas flight.

The industry’s main trade body, the International Air Transport Association (Iata), also said the requirement for pre-departure Covid-19 tests needs to be removed.

“It’s also crucial for the entire aviation value chain in China to be well prepared and adequately resourced to handle the expected surge of air travellers, so as to avoid the travel disruptions and problems seen elsewhere in the world when borders reopened,” said Iata’s regional vice-president for North Asia Xie Xingquan.

Any real explosion in outbound travel, however, may not happen until after Chinese New Year, which in 2023 falls in late January, or even some months after that.

While online searches for Chinese New Year outbound flights were up 300 per cent as of Dec 27, searches for Labour Day flight tickets around the holidays in early May were up 600 per cent, VariFlight data show. 

International ticket prices also are not showing any meaningful fluctuations and are still elevated.

Polls on Chinese social media indicated high fares could be another deterrent. “I got so excited at the news and then the flight prices calmed me down,” one person wrote on an account on Weibo, which is similar to Twitter. “Will wait and see instead.”

VariFlight analyst Wang Yi said international flight volumes will rebound gradually and probably “hit a real turning point by summer 2023”. BLOOMBERG

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China outbound travel demand towards 2030 – what and where are the opportunities.

Rapid growth in Chinese outbound travel demand from 2003 onwards was a key driver for tourism and leisure hospitality in many parts of the world. Can this momentum be regained post-COVID to drive more hotel development?

The hospitality industry is keenly looking forward to the return of tourist arrivals. Given that the largest source of outbound tourists being from China, the prospects for a recovery and medium-term growth are critical. In an earlier article ( A potential recovery in China outbound travel demand OR what’s in store for 2022? ). we discussed the short-term outlook for five key destinations. This article discussed outbound travel growth prospects, including key drivers the impact on hotel demand and opportunities for new destinations to emerge.

‍ Track record check: China outbound travel demand

The number of Chinese outbound travelers expanded considerably over the past two decades, and China was also the largest contributor to the global tourism industry by expenditures before COVID-19 emerged in early 2020.

Mainland China outbound trips 2000-2019

Statistics released by the National Bureau of Statistics of China (NBS) revealed that the total number of outbound trips grew steadily from 57.4 million in 2010 to 169 million in 2019. While the NBS does not publish data for 2020, the China Tourism Academy (CTA) estimates the number of outbound trips dropped to 20.2 million in 2020 due to COVID-19. A similar crisis, the SARS epidemic in 2003, however, did not cause a similarly severe impact on Chinese outbound travelers at that time. The comparable figure reached 20.2million in 2003 with a 22% growth over the previous year given a much shorter duration limited to several months, rather than years.

Total outbound trips reached 169 million in2019 at a 4% year-on-year growth. Trips to Asia accounted for more than 90% of the outbound trips, of which Greater China (“GC”), including Hong Kong SAR, Macau SAR, and Taiwan made up approximately 60% of the total or 100 million trips in2019. We caution that this figure includes a large number of same-day visitors, including commuters, school children, shoppers and some tourists. For Hong Kong SAR this figure can be as high as 63% in 2019 and 53% in Macau SAR in 2019.

Mainland China visitor arrivals to GC 2010-2020

Data on mainland Chinese visitor arrivals provided by the respective destinations’ authorities ( Hong Kong Tourism Board; Statistics and Census Service of Macau SAR; Taiwan Tourism Bureau ) indicate that Hong Kong was the most popular destination within Greater China in 2019,despite a slight decrease from 2018 due to an unstable environment. Macau, on the other hand, attracted Chinese travelers with its gaming and other attractions at stable growth rate over the past years. At the same time, destinations outside Greater China enjoyed increasing popularity among Chinese visitors, counting more than 60 million trips in 2019, the highest number on record.

Mainland Chinese Visitor Arrivals to Asia, ex-GC, 2019

Owing to their proximity Asian destinations welcomed the second-largest number of outbound Chinese tourists Ease of access favors short-to-medium-haul flights within a 3-to-5-hour flight radius for both convenience and cost. Notably, the limited number of vacation days available to Chinese workers also favors shorter flights. As reported by China Tourism Academy (CTA), Japan, South Korea and Southeast Asia were the top destinations outside Greater China in 2019. Excluding Greater China, top three Asian countries, Thailand, Japan, and Korea, accounted for more than half outbound trips in Asia in 2019.

In 2019, mature long-haul destinations captured a great share of Chinese outbound travel outside Asia, including close to 18 million trips to Europe and over 3.5 million trips to North America. Other key markets, such as Russia, Australia, and UAE, also attracted more than one million visitors from mainland China in the same year.

Mainland Chinese Visitor Arrivals to key long-haul markets, 2019

The near future

Although Chinese travelers turned to domestic travel during the pandemic, the number of outbound trips is set to rebound as borders reopen. While the country has a large and growing middle-class population willing to spend, the pace of recovery is dependent on the country’s progress regarding vaccinations, government policy, and travelers’ perceived risk of different overseas destinations.

More than 75% of the Chinese population is fully vaccinated, and major cities, such as Beijing and Shanghai, already achieved an 85% vaccination rate in August 2021. Nevertheless, experts in China suggested that the country would only consider reopening its border at a minimum nation-wide vaccination rate of 80% to 85%. Meanwhile, the country maintains strict border controls to prevent any import of infections; inter-provincial and inter-city travels do get be suspended when regional outbreaks happen domestically.

Unfortunately, government officials have yet to unveil any reopening plans, and the zero-tolerance policy is set to remain in place for a longer time. It is speculated that the border would remain shut for the coming year given the lead-up to the National Congress of the Chinese Communist Party in November 2022 – likely the most important political event in China since 1989. The Winter Olympics Games 2022 in Beijing are likely to only welcome a domestic audience complying with COVID-19 prevention measures, although vaccinated participants can enter without quarantine while remaining in an Olympic bubble. At the same time, efforts are being made to reopen the border between Hong Kong SAR and the mainland. Reportedly with a very limited quote of 1,000 daily arrivals from Hong Kong SAR, which adheres to a strict zero-tolerance policy of its own, starting towards the end of the year. According to the South China Morning Post , a full opening of the border could happen before June 2022 to resemble the condition at the Macau border. The mandatory three-week quarantine imposed on all inbound and returning travelers undoubtedly stymies Chinese outbound tourism demand.

Furthermore, the cost, perceived risks of destinations (regarding COVID-19), and ease of visa application are other key considerations among Chinese travelers for any future outbound trips. While more countries are welcoming tourists back, especially from low-risk countries like China, the unpredictable COVID-19 situation and border control measures in China pose insurmountable difficulties to bring Chinese tourists back in the short term. To the detriment of many industry stakeholders, the government does not see a great benefit in reopening borders for inbound travelers while domestic travelers are willing to spend on holidays within the country, propping up the economy for the time being.

Travel demand drivers

The three main segments of travel demand (business, leisure, MICE) are largely dependent on two drivers: economic performance (for all three) and the size of the population with sufficient disposable income(for leisure). China’s outbound travel demand is dominated by the leisure segment. In the modern age, the majority of higher-spending outbound leisure travelers can be found residing in urban areas.

China’s urbanization rate increased over the past decade

Since 2011, the urban population increased significantly from 51.8% to 63.8% in 2020 growing at a rate of approximately 3.0% per year before slowing down from 2018 onwards. While the pace of urbanization is slowing, projections by Morgan Stanley target an urbanization ratio of 75% by 2030. This change in the composition of the population will see not only greater demand for goods but also services and ultimately outbound travel. According to the EIU, population changes will further be impacted by a degree of migration back from coastal areas to central and western provinces, where manufacturing costs are lower.

Urban population by city cluster (m)

Population changes are additional drivers of urbanization that will impact economic development. Western and central provinces with higher population growth rates are set to close the development gap with coastal provinces.

A host of factors in urbanized areas leads to higher disposable income, including improved social mobility, access to resources, greater talent pool and incubation of ideas. Though certainly there are downsides as well, residents in urban areas enjoy a 36% disposable income premium compared to the national average.

The 2019 annual report on Outbound Travel by the CTA also suggested that the market of Chinese outbound travel is robust in the long run due to increasing income levels in the country driven by increasing levels of urbanization and economic development.

Urban areas in eastern China would continue to lead the growth of outbound travel while coastal provinces, like Jiangsu and Guangdong have further potential to eventually outperform Beijing and Shanghai. Over time the development gap between eastern China and other provinces is set to narrow, unlocking future potential for outbound travel in the populous western provinces.

Urban areas command a disposable income premium

The disposable income of Chinese population recorded a growth rate of approximately 9.0% in pre-pandemic times, decreasing to 4.7% during the pandemic. While trailing the national level in relative terms, disposable income growth in urban areas outpaced the national level in absolute terms for all years from 2014 to 2020.

Upon closer inspection, the composition of the employment base in urban areas shows three categories: state-owned enterprises(SOEs), private companies, and others.

Urban employment by sector 2011-2019

Among a dynamic economic environment with a higher degree of privatization, private companies employed 34% of urban workers by 2019, up from 26% in 2011. In absolute terms this represents approximately 76.5 million more urban private company employees over the eight-year span.

Comparing the number of urban private company employees next to the number of outbound trips, paints a compelling picture, as show in the detail below.

Urban employment & outbound trips

Over the eight-year period from 2011 to 2019,the growth in private company employees was moderately outpaced by the number of outbound trips. While more detailed studies are required on a provincial level, it is evident that the macro-trends of urbanization, increasing disposable income among urban residents and private sector employment provide strong support for continued outbound travel demand growth in the medium-to-long term.

The road to 2030

To no surprise, the potential return of Chinese outbound travelers has been discussed before, the most aggressive of which have Chinese outbound travelers return to 2019 levels as soon as 2023. In a May 2021 update ’ The road to recovery for Chinese outbound tourism ’, the Economist Intelligence Unit (EIU) expected outbound travel in China would return to pre-pandemic levels in early 2024 to reach its pre-COVID-19 potential of 240 million earliest by the end of 2025. At the beginning of the recovery, Chinese tourists would first return to Hong Kong, Macau, and Southeast Asian countries considering the vaccine rollout and risks of reopening in these destinations reported by EIU. On the other hand, the China Outbound Tourism Research Institute (COTRI) suggested that Chinese outbound tourism would surpass its record number of 180 million reached in 2019 by 2023 providing an optimistic outlook in their latest forecast from June 2021. In turn, in September 2022 Bernstein Research projected the number of total outbound trips would surpass 200 million in 2023 and 365 million by 2030; whereby the growing number of Chinese outbound travelers would stimulate hotel room night demand accordingly.

Comparison of outbound trip projections

AP’s projections of outbound Chinese travel are based on performance from pre-COVID-19 years and through the pandemic. Greater China (“GC”) was separated out. According to the NBS total outbound trips taken in 2019 reached 169 million, 102 million of which were outside GC. However, figures released by the destinations in GC only showed an aggregate 75 million Chinese inbound travelers in 2019 – a difference which could not be explained. To reconcile, the NBS’ total number of outbound trips of 169 million was adopted together with an adjusted number of trips to GC of 85 million to form the base for the projections of Chinese outbound travel in this article.

The analysis employs the ratio of outbound trips to urban population (OTUP) to project total travel demand. In addition to the base case, an optimistic and conservative scenario were developed.

Outbound trips by OTUP ratio, 2011-2030F

Historically, the OTUP ratio (plotted on the secondary y-axis) increased from 0.10 in 2011 to 0.19 in 2019, reflecting the growth of the middle class and disposable income. While the pandemic depressed this ratio significantly, we project a robust recovery in the medium term before gradually tapering off. In the three scenarios, the OTUP ratios reach 0.18, 0.2 and 0.25for the conservative, base and optimistic cases, respectively, by 2030. The total number of outbound trips ranges from 197.1 million to 271.2 million by2030. In the base case outbound trips arrive at 221.8 million by 2030, compared with 169 million in 2019 – a milestone projected to be surpassed in the base case come 2026. While the projection covers a relatively wide range, a host of factors can have both positive and negative impacts. One major aspect is the continued development of the domestic tourism industry under policies promoting cultural tourism, dual circulation, and domestic consumption.

Total outbound trips projections, 2019-2030F

The projections are further split for Greater China (GC) and ex-GC as show below.

GC trips projections, 2019-2030F

Outbound trips to GC are projected to recover to 2019 levels in the base case by 2025. Recent changes on travel permits and changes to supply may have limiting effects on a recovery in the short-term. Hotel capacity constraints will likely be the major obstacle for increased growth on overnight stays. Same-day visitors may well drive more outbound trips to GC, in particular for the integration areas on Hengqin Island next to Macau and the planned ‘Northern Metropolis’ at the Hong Kong -Shenzhen border. Historically, the share of same-day visitors was approximately 50% for Macau and 60% for Hong Kong.

Outbound trips projections ex-GC, 2019-2030F

The prospects for trips ex-GC are generally promising. The ramp-up period may be slightly longer, surpassing 2019 levels only by 2026.Given that limited new supply has been added to the pipeline during the pandemic and some hotel properties were converted to alternative uses, capacity constraints may limit growth in the near term. However, the upside potential until 2030 is significant, reaching close to 150 million compared to 85 million in 2019.

The incremental number of trips to ex-GC range from 21.5 million to 65.8 million trips, with a base case at 32 million. This represents a sizeable increase in outbound travel demand, which will have to be accommodated at hotels overseas. The usual suspects of regional destinations will be receiving the lion share of demand. Travel preferences among Chinese travelers do not show signs of an immediate shift towards new markets outside Asia once international travel resumes post-COVID-19.However, the existing destinations in Asia will unlikely be able to absorb the increased demand in a sustainable manner. This presents opportunities for emerging destinations or entirely new locales to accommodate more tourists - hopefully while subscribing to principles of sustainable development, thus avoiding mistakes made in other parts of Asia and across the world.

Outbound trips projections summary, 2019-2030F

Incremental Hotel Demand & Supply Absorption

Based on the above projections of outbound travel, we can develop a forecast of supply absorption. This is relevant for operators to understand future potential in specific markets but also investors to assess growth opportunities. The below forecast incorporates key factors of hotel demand such as average length of stay, double occupancy factor and occupancy rate to arrive at future room supply absorption.

Supply absorption base case

For GC arrivals, a rate of 50% of trips was determined to be for overnight stays – though this number may vary with a higher permeability of the border in the future, we would see this reflected in the top line numbers accordingly first (currently not factored into the analysis).The GC markets indicate a supply absorption of a relatively limited 10,500 rooms by 2030 in the base case. Notably this forecast assumes no change to the status quo for visitor arrivals to Taiwan. For ex-GC destinations, supply absorption from China outbound travel is considerably higher at 261,100 rooms by2030, though spread over a far larger area and concentrated on specific locales. Using the optimistic case outbound travel projections, a higher supply absorption of 35,600 rooms in GC and 601,100 rooms ex-GC by 2030.

One key variable in assessing supply absorption are occupancy levels. The following detail presents a sensitivity analysis by varying future occupancy levels from the base case.

Room absorption rates by occupancy levels, 2025to 2030

By 2030 an additional supply of 124,000 to 552,400 rooms, varying by occupancy levels, can be absorbed by incremental Chinese outbound travel demand. This bodes well for hotel markets globally and particularly in Asia. Key benefactors, assuming stable political relations, will be destinations in North Asia as well as Southeast Asia. Properly developed, there is potential for new destinations in Indonesia, Cambodia, and the Philippines as well as Malaysia, Myanmar, Laos, Nepal and Sri Lanka. The established destinations of Thailand and Vietnam will have to keep evolving their offering to attract higher-rated demand. Providing a compelling mix of culture, natural attractions and man-made facilities is needed to provide a comprehensive tourism experience for an increasingly sophisticated and demanding traveler. Hotel investors will be required to think beyond the room product and challenge themselves and other stakeholders in the destination to provide a competitive and attractive tourism offering that manages resources in a responsible and sustainable manner

The hotel and tourism industry must be patient for the return of outbound Chinese tourists and use the extra time to prepare better. Consumer markets in China are highly dynamic and demands are evolving constantly. A product and experience that sold relatively easy before the crisis may not be as attractive to attract future visitors. 2022 may see the recovery for many international travel markets but not for Chinese visitors just yet. Investors can take a strategic view and prepare for future demand growth either by seeking out distress opportunities or exploring new development.

References:

https://agbrief.com/news/china/08/09/2021/chinese-travel-demand-to-outstrip-tourism-infrastructure-by-end-decade-bernstein/

https://china-outbound.com/cotri-latest-presentation/

https://www.ap-ha.com/post/china-outbound-demand-2022

https://www.eiu.com/n/the-road-to-recovery-for-chinese-outbound-tourism/

https://www.morganstanley.com/ideas/china-smart-cities-economy

https://www.oliverwyman.com/content/dam/oliver-wyman/v2/publications/2021/may/when-and-where-will-we-see-chinese-travelers-again.pdf

https://www.scmp.com/news/hong-kong/health-environment/article/3154758/hong-kong-border-reopening-quarantine-free-travel

AP Hospitality Bulletin Asia Pacific - April 2024

Hotel Operator Guide 2024 - 11th Edition

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China Travel High-End Market

China has seen a revival in the high-end outbound travel market with the reopening of its border. Wealthy Chinese travelers are prepared to upgrade their travel spending by increasing overseas travel frequency and duration.    These luxury travelers are demonstrating a growing preference for immersive, slow-paced, and high-quality experiences, extending to premium offerings such as first-class flights and luxury accommodations. This preference highlights a segment for businesses offering tailored services, cultural experiences, or wellness-focused packages.   Survey data reveals that nearly half of the respondents, who classify as China’s high-income travelers, plan to make at least five trips in 2023, a slight increase from 2019 averages. Planned spending for 2023 is expected to rise by 15%, with an average budget of approximately USD 15,299. The majority of respondents intend to extend their vacation duration compared to pre-pandemic levels, and over a third of these high-end travelers plan to utilize premium travel and accommodation services.    For more information contact [email protected]

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International travel demand drives ANA revenues and operating profits

By Greg Waldron 2024-04-26T08:33:00+01:00

Strong travel demand and cost controls helped ANA Holdings, the parent of All Nippon Airways, power to a record operating profit its latest financial year.

ANA’s highlights in the 12 months to 31 March included the capture of inbound demand from Asia and North America, which also saw “higher-for-longer” yields.

Source: Greg Waldron/FlightGlobal

Carrier captured inbound traffic from Asia and North America

Domestically, ANA was able to capture strong demand for leisure travel, while low-cost unit Peach expanded its international routes, resulting in record revenues and operating profitability.

“Passenger demand continues to recover despite concerns about geopolitical risks such as the situation in Ukraine and the Middle East region and the implications for the airline industry,” says ANA.

“Against the backdrop of factors such as the change in the status of Covid-19 to a category 5 infectious disease in Japan, both international and domestic passenger services performed well, supported by strong demand for inbound travel to Japan and domestic leisure demand, leading to significantly higher operating revenue compared to the previous fiscal year.”

For the 2023 financial year ANA saw a consolidated operating profit of Y208 billion ($1.3 billion), doubling from a year earlier. Revenue rose 20.4% to Y2.1 trillion, as net profits nearly doubled to Y157 billion.

Mainline carrier ANA’s international passenger revenue jumped 68% to Y728 billion, as the number of international passengers carried rose 69.4% to 7.1 million. International ASKs rose 48.5% as RPKs rose 56%, while ANA’s international passenger load factor rose 3.7 percentage points to 77.3%.

ANA’s domestic passenger revenue rose 21.8% to Y654 billion, as the number of domestic passengers rose 18% to 40 million. Domestic ASKs rose 8.7% as domestic RPKs rose 18.2%. ANA’s domestic passenger load factor rose 5.7 percentage points to 70.2%.

Low-cost unit Peach also had a good year, with revenue climbing 53% to Y138 billion, and passengers carried climbing 20.2% to 9.3 million. Peach’s ASKs rose 10%, RPKs rose 29.9%, and its passenger load factor improved 13.2 percentage points to 86.7%.

Cargo, however, was a weak spot for ANA. “For international cargo service, despite efforts to capture demand between North America and Asia, volume and revenue for international cargo decreased from the same period of the previous fiscal year, due to a decline in market demand from major industries such as semiconductors, electronics and automotive-related industries,” says ANA.

“Nevertheless, its revenue remained at approximately 1.5 times higher compared to fiscal year 2019. For the route network, we worked to ensure profitability by actively monitoring demand trends and flexibly adjusting the utilization of freighters.”

ANA’s international cargo revenue fell 49.5% to Y156 billion, as freight carried declined 15.6%.

For the year ahead, ANA Holdings expects revenues to rise on the back of more growth in international travel demand. For the 2024 financial year ended 31 March 2025, it forecasts that operating revenue will rise 6.5% to Y2.2 trillion, but believes that an increase in operating costs will push operating profits down 18% to Y170 billion.

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Capacity and demand surge in China-New Zealand market as airlines eye further growth

With visitor flows from China to New Zealand recovering strongly, capacity in this market is expected to exceed pre-pandemic levels during the southern hemisphere winter season.

The resumption of flights to New Zealand by Sichuan Airlines means that six Chinese airlines are now operating there. Some of them plan significant capacity increases in coming months.

New Zealand was already a popular market for mainland China 's airlines before the pandemic, which is a major reason why capacity and demand is rebounding more quickly than in many of China 's other international markets.

Although China 's outbound travel has been generally slow to gain momentum, it is a good sign that it returning to pre-pandemic levels in certain markets - particularly a long haul destination like New Zealand . This bodes well for other countries that are waiting for Chinese traffic flows to bounce back.

China - New Zealand routes are dominated by the Chinese airlines, but having this many extra foreign airlines boosts Auckland Airport 's competitiveness.

The China market is important for New Zealand , both in terms of current service and potential demand. This market was growing rapidly before the COVID-19 pandemic, and there is scope for further expansion that will be helped by having such a broad range of Chinese airlines already flying to New Zealand on multiple routes.

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What can other countries learn from China’s travel recovery path?

While the path of the travel and tourism recovery will vary by market, China’s distinct experience may hold lessons for other markets—particularly those where, as in China, COVID-19 transmission rates are low and traveler confidence has recovered quickly.

In May 2020, we conducted a survey of Chinese travelers ; based on these results, we predicted that the domestic travel market would recover quickly. A follow-up survey in August further explored the key emerging travel trends, how traveler behavior and sentiment has evolved, and the implications for global travel industry players. Using the same methodology, we surveyed respondents from eight Chinese cities, 1 We surveyed approximated 2,000 respondents from Beijing, Chengdu, Guangzhou, Shanghai, Shenzhen, Xi'an, Xiamen, and Wuhan. all of whom had traveled domestically or overseas in the past year. We compared data collected from August 22 to August 28, 2020, with the previous two rounds of surveys.

In this article, we update our survey findings and offer insights on what lessons other markets, individual global travel and tourism companies, and the industry as a whole might take from China’s recovery.

What are we seeing in China?

Demand for domestic travel is approaching prepandemic levels. Hotel-occupancy rates and numbers of domestic flight passengers bounced back to around 90 percent of 2019 level by the end of August, and railway travel also shows a strong recovery (Exhibit 1).

People of all ages are willing to travel again. The proportion of China Travel Sentiment Survey respondents that had travel plans in the four months following the survey rose from 15 percent in May to 70 percent in August. About half of these respondents expected to take their next leisure trip around the National Day holiday at the start of October (Exhibit 2).

Looking at age demographics, 75 percent of the young (those aged 25 to 34 years), 77 percent of the elderly (aged 55 to 64 years), and 78 percent of retirees expressed a particularly strong willingness to travel.

All types of domestic travel have bounced back. Since May, all types of domestic travel—including local leisure trips, domestic short haul and long haul, and domestic business travel—have experienced a significant resurgence (Exhibit 3). The proportion of respondents who had taken local urban leisure trips in the preceding two weeks increased from 54 percent in May to 73 percent in August, for example. The percentage of respondents who took domestic short-distance trips also increased from 19 percent to 31 percent over the same period, and those who had taken a domestic business trip increased from 2 percent to 25 percent.

The preferred format of leisure trips has seen little shift. As in May, most survey respondents would likely choose a self-guided tour or road trip for their next leisure trip (Exhibit 4). However, the proportion of respondents who would consider group tours or a cruise for their next trip has increased modestly: 32 percent of August respondents would “definitely” or “likely” choose a small group tour for their next leisure trip, for example, compared with 29 percent in May.

Confidence in domestic-travel safety continues to rise—but has not yet reached precrisis levels. Consumers were asked to rank their confidence in a number of different forms of travel on a scale of one to five, where one represented “not safe at all” and five represented “completely safe.” Safety perceptions have increased significantly since May for domestic leisure trips, and—should this trend continue—would rapidly approach completely safe levels (Exhibit 5). Outbound trips, by contrast, are still considered unsafe.

Restrictive measures are being lifted, though some rules remain. The number of local cases has hovered around zero in most parts of China, leading these low-risk areas to lift many restrictions, such as physical-distancing measures and mandatory nucleic acid testing, for traveling in and out of certain areas. Within the dynamically defined safe zones, traveling and daily activities are almost back to normal, though some precautions—such as health QR-code monitoring, travel tracking, and the mandatory mask wearing on public transport—do remain in place. In addition, institutions such as schools continue to implement their own travel restrictions.

Some types of travel, especially high-end travel, are booming. Borders remain closed for outbound travel, which means that domestic high-end leisure trips are booming. Occupancy rates at luxury and high-end hotels were back at 85 percent of 2019 figures by the end of August, 2 Analysis of data from STR, updated August 2020. representing a significantly faster recovery rate  than that seen by midrange and economy hotels. In September, the average price for five-star hotels on leading online-travel-agency (OTA) platforms was up 10 to 15 percent year over year for trips over the National Day holiday in October. Furthermore, leisure travel to destinations in Western China and Hainan Province—which boast beautiful scenery, outdoor activities, and beach resorts—have seen significant growth.

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Price cuts were initially used to stimulate demand. Many travel and tourism businesses offered discounts in the immediate aftermath of the crisis in order to compete for business and stimulate demand. Some airlines, such as China Eastern, offered unlimited-flight passes, and airfares fell by a national average of 40 percent from January to June.

International travel remains off the table. With strict restrictions on the number of weekly international flights per week and mandatory centralized quarantine for international arrivals, international travel is still mostly limited to essential trips. Yet latent demand for trips abroad appears to be significant, however, with the proportion of respondents who expect to go overseas for their next leisure trip rising from 25 percent in May to 31 percent in August (Exhibit 6).

The recovery of international travel is likely to be gradual. Keeping COVID-19 contraction rates close to zero is a high priority of the Chinese government; rising rates of local contraction in any region would lead to a risk-level reassessment in a manner that would significantly disrupt daily life.

As a result, China has not yet established any international travel bubbles. Mainland China has, however, begun the process of opening its border to the special administrative region of Macau, which is currently classified as low risk. The border between Macau and Guangdong Province opened in August, and tourists from other low-risk regions on the mainland were able to apply for travel permits starting in September. These travelers will be spared mandatory quarantine, though they will still need a nucleic-acid-test certificate and a health QR code. This gradual process could serve as a model for further easing cross-border travel restrictions in the near future. Preconditions for additional border openings are likely to include mutual formal recognition of low-risk status, transparency around heath data and COVID-19 monitoring, and consensus around protocols to manage the risk of further epidemics.

What implications does China’s experience have for the rest of the world?

In order to understand which trends and strategies may apply to other countries, and which may not, it is useful to first distinguish between two broad categories of recovery strategy. Some countries and regions appear to be pursuing a “zero case first” strategy, while others appear to be taking an approach that we refer to as “balance and manage.”

The zero-case-first strategy is associated with markets where COVID-19 contraction rates are low and—as a result—traveler confidence level is relatively high. Various types of travel activities (for example, hotels stays and air travel for leisure and business trips) could therefore show a strong domestic recovery.

The focus of the travel and tourism industry in zero-case-first markets may be to accelerate demand recovery and explore more active revenue-management strategies. International travel will likely recover more slowly and be contingent on travel bubbles or corridors forming. China’s recovery experience, with its focus on accelerating the return to normalcy for domestic tourism activities, will be of direct relevance for these markets.

The balance-and-manage strategy is associated with markets where the contraction rate of COVID-19—and the resulting level of anxiety around travel—tend to be higher. For example, contraction rates in the United States remained high in May, when 49 percent of survey respondents said they were “extremely anxious” about flying. Travel in balance-and-manage markets tends to be limited to essential trips, which means the rate of recovery is low, and key metrics (such as hotel occupancy and flight bookings) still show a large year-over-year performance gap.

The primary focus of balance-and-manage markets could be to rebuild confidence through the implementation of health and safety measures. Opening international travel to other countries with similar strategies and risk levels and allowing economic activity to resume may be possible earlier than for markets adopting the zero-case-first strategy. Lessons from China may be less directly relevant in these balance-and-manage markets, though looking at Chinese consumer-behavior patterns may be valuable in predicting the general shape of the recovery once travel confidence is restored.

Lessons for companies operating in a zero-case-first market

Companies operating in markets with very low transmission rates may focus on rebuilding domestic demand, finding new channels, or exploring opportunities for travel bubbles.

Rebuild demand, then enhance value

Rebuilding demand and propelling volume (such as through discounts and presales) are key during the early stages of recovery. As demand grows and confidence increases, indicators such as hotel occupancy and the number of domestic air travel passengers might approach prepandemic levels. Companies could explore opportunities to bundle products (thereby offering upsell and cross-sell opportunities), as well as to diversify their revenue stream, and enhance premium product and pricing.

Hotels in Shanghai launched an “afternoon tea in the cloud” experience to attract affluent young people. Other destinations and hotels could capitalize on booming demand for outdoor leisure experiences by offering scenic riverside cycling or new watersport activities. Travel companies could also innovate by augmenting their online touchpoints and online experiences. This is already starting to happen: some museums have launched video tours with staff and contemporary artists, and cruise lines have launched live-streaming channels to highlight cultural experiences.

As demand grows, there are opportunities to refine optimal pricing mechanisms. This is not something that all countries are getting right; for example, many hotels in Germany may have missed a pricing or revenue-management opportunity  when demand for summer travel reemerged.

Focus on domestic

Countries are still in different stages of local lockdowns, and domestic travel my not yet be possible in every market. But, where appropriate, domestic demand can be augmented through a focus on emerging domestic destinations—particularly those that offer outdoor leisure opportunities. This may be best done through cooperation with local government, or with other tourism ecosystem players such as OTAs, attractions, hotels, and airlines. For countries where—as in China—the outflow of high-end tourism-related spending is significant, it will again be important to focus on providing new or improved high-end domestic offerings.

The time for digital is (really) now

The pandemic has accelerated the adoption of mobile and digital tools. Building digital touchpoints and experiences will therefore be essential. In China, social media and new media are now major sources of inspiration and information for travel decisions (Exhibit 7). OTAs and hotel players are adopting livestreaming as a way to boost the sales of travel packages. Some attractions are exploring “cloud travel” to increase broad digital engagement and diversify revenue streams through the online sale of themed products. Strategic collaborations—such as OTAs providing ticket-booking services via instant messaging and through social-media platforms—could also offer an opportunity for increased market penetration.

Reopen gradually, in line with travel bubbles where possible

In order to capture early outbound-travel demand, travel players may benefit from tracking the development status of potential travel bubbles. Nearby regions with strong economic ties, low contraction rates, the ability to control their borders (which tends to be easier, for example, for islands), and mature health-risk-management infrastructure could be high potential zones for pilot border-reopening projects. Travel companies will need to be flexible and nimble to capture early international-travel demand—and should be prepared to implement strict health and safety protocols that fulfill the stipulations of both domestic and destination security policies.

In the short term, zero-case-first markets like China should focus on accelerating and capturing emerging growth opportunities and enhancing their high-end offerings, while balance-and-manage markets should continue to focus on building traveler confidence. Thinking ahead, however, travel companies in both markets will need to be adaptive and agile in order to seize postcrisis opportunities and position themselves to thrive within the tourism economy of the future .

Guang Chen and Will Enger are partners in McKinsey’s Hong Kong office, where Jackey Yu is an associate partner. Steve Saxon is a partner in the Shenzhen office.

The authors wish to thank Yinlian Bai and Valky Wang for their contributions to this article.

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