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China’s domestic and outbound travel is taking off again after the country relaxed its former Covid-19 travel restrictions significantly. The measures had dealt a blow to both inbound and outbound tourism.
Data from China’s Ministry and Culture shows that domestic trips were up 0.44% during the three-day New Year holiday period (December 31 to January 2). Revenue during the same period was up 4% on the year to 26.5 bn yuan ($3.8 bn). This represents 42.8% and 35.1%, respectively, of the pre-pandemic figures in 2019.
Since late last year, China has been adopting a more “living with Covid” approach stepping away from the zero-Covid policy. First, China eased inter-provincial travel policies and then opened up international travel. Starting from January 8, 2023, international travellers will only need to present a negative Covid-19 test taken within 48 hours before boarding. Mass PCR testing and quarantine will no longer be required. The policy comes into effect just in time for the Lunar New Year celebrations, starting January 21, which are traditionally a busy travel season in China. In pre-pandemic 2019, an estimated 3 billion trips were made.
Following the travel easing, airlines are now faced with a surge in demand. The Civil Aviation Administration of China (CAAC) has already issued a plan to restore air travel in three phases and expects domestic passenger flights to reach 88% of the pre-pandemic level by the end of January. Until the end of March, the CAAC foresees a “stable recovery”.
The world preparing for China’s travel plans
The volume of international travel from China is also picking up. Global travel provider Trip.com Group saw a 254% increase in Mainland China’s ticket booking on outbound flights on the morning of December 27 alone, when the travel easing was announced. The top destinations were Singapore, South Korea, Hong Kong, Japan and Thailand.
Countries around the world are reacting differently to China’s travel restrictions easings. For example, Cambodia, a country dependent on tourism, is welcoming Chinese tourists back into the country. Prime Minister Samdech Techo Hun Sen underlined the importance of the Cambodian tourism sector and the economy as a whole. Hun Sen said, “When China reopens its borders, flights will increase many times, so we hope to welcome about 2 million Chinese tourists again in 2023.” According to the Prime Minister, 2.36 million Chinese tourists came to the country in 2019.
Other countries fear a new spread of Covid infections and have put stricter guidelines in place for incoming Chinese travellers. Amongst them are Japan, South Korea, the US, Germany and France which have set testing requirements in place.
The economic factors of Chinese travellers
While fears of a resurge in global Covid cases persist, there is an economic factor that comes with Chinese travellers as they are big spenders. “The Chinese have historically been the world’s biggest spenders while travelling abroad, with expenditures topping $277 bn in 2018. This total fell to $105 bn by 2021, so I’m sure retailers will be rolling out the red carpet,” says Frank Holmes, CEO and chief investment officer of U.S. Global Investors.
According to Bain & Company, Chinese consumers are forecast to become the world’s largest luxury market, accounting for roughly 40% of all sales globally by 2030.
