China's prolonged absence from global tourism could be impacting more than tourism revenues. Yet, geopolitics aside, Chinese consumer demand for long-haul travel is still alive and well, and it's getting stronger.
It’s no secret that as tourism reopens gradually, amid stops and starts, the world’s top cities continue to reel from the absence of China’s lucrative outbound travel market — to the tune of 166 million trips abroad in 2019, per Skift Research. China was the driver of global tourism’s growth pre-pandemic and one of the most valuable outbound source markets in the world.
Pre-pandemic, Chinese outbound tourism expenditure ranked first, reaching $277 billion total, or higher than the U.S. at $157 billion of outbound tourism expenditure, and Germany at $104 billion.
Even in the midst of a Covid pandemic, predictions had remained bullish on the return of Chinese tourists abroad. The China Outbound Tourism Research Institute (COTRI) forecast 100 million international trips from Chinese travelers in 2021, and 219 million trips by 2022.
Yet 17 months later, China remains largely closed to long-haul leisure travel, inbound and outbound, despite 75 countries that are now open to Chinese travelers. China’s ban on outbound vacation package sales remains in place, and domestic tourism has taken a recent hit due to the Delta variant, further making reopening uncertain.
Perhaps even more surprising is that the vaccine rollout in China hasn’t boosted confidence as much as it has in other places — over half of surveyed Chinese travelers said they were uncertain about long-haul leisure travel as of March 2021, and 68 percent said they were unsure of business travel, a sentiment survey by Chinese data and marketing agency Dragon Trail has shown.
The question remains, what does the unexpected prolonged absence of Chinese travelers overseas mean for global tourism, and for destinations in Southeast Asia, U.S., and Europe that once welcomed throngs of Chinese tourists? Are Chinese travelers’ preferences changing enough to impact the world’s largest source market?
The Demand is There And It’s Intensifying
While China’s reopening remains a matter of speculation, there are signs of pent-up demand as well as gradual movement in the restart of outbound Chinese travel, in what experts are seeing as a flicker of light in the tunnel.
For one, the Chinese travel appetite is only getting larger. For the first time since last year, the “sentiment around absolutely not traveling” has decreased since last year, Dragon Trail’s March 2021 survey shows. Almost a quarter of Chinese travelers also indicated they were eager to travel as soon as there was a chance, while 32 percent said they would travel cautiously and 39 percent would wait until it’s safe.
“We have seen the demand from Chinese; lots of people, especially the younger generation, really want to travel,” said Alina Xiang, CEO at East West Marketing, a digital tourism marketing firm specializing in China and India outbound travel markets.
“That’s why during the pandemic, cloud travel at home was a hot topic on Chinese social media — people exploring destinations through live streaming, through social media.”
It explains why Trip.com’s weekly live stream marketing campaigns have been hugely successful, selling more than $294 million in travel packages and hotels by October 2020, as reported by Skift Research.
There are also hints of China looking to reopen — ongoing China government discussions around a bubble with Singapore, according to Xiang, though the status of this remains unknown, and more recently, the U.S. Embassy in China reopening student visa applications as of May.
It’s a great sign of what’s to come, Xiang said about the student visa restart.
So far the UK tops Chinese student destinations this Fall, with one-way international flight tickets issued from mainland China for the period August 16 to September 30 to the UK currently at just 19.5 percent below the same period in 2019, according to ForwardKeys and Dragon Trail. Plane tickets issued to the U.S. are at 22 percent below 2019 levels, and to Canada at under 28 percent below 2019.
In July, China announced the launch of a 2021-2022 Greece-China Year of Cultural Tourism, according to COTRI’s recent webinar on post-pandemic outbound China travel. Greek and Chinese government leaders have a plan to increase tourist flows between the two countries. What it entails remains unclear, particularly as both nations are currently faced with a Delta variant surge.
Ultimately, destinations for whom Chinese travelers were a key market cannot sit and wait to see what happens, Xiang said.
“We cannot just think about what we lost during the pandemic, we have to think about when things go back to normal, how we recapture the market and how can we be the first one to bring Chinese travelers back.”
Regions of Interest Unchanged, But Friendliness Rules
There’s little doubt diplomatic and trade relations between China and the West have worsened over the past year, not to mention the rise of anti-Asian hate crimes which might deter the future Chinese traveler.
But new data suggests that politics hasn’t affected the Chinese traveler’s interest in its pre-pandemic preferred long-haul destinations. Asia, Europe and North America still rank among the top three most preferred for Chinese travelers, Dragon Trail’s consumer sentiment report shows.
Sightseeing and food remain top of mind at 68 percent and 92 percent, followed by hiking or exercising in nature, and shopping. Conversely, safety remains paramount with more than half of Chinese travelers indicating that friendliness is the top safety factor, followed by zero new Covid cases in the destination and no quarantine requirements.
Ultimately, the Chinese traveler’s appetite remains large, and the true potential of China’s outbound market has yet to be tapped.
“Only one out of 10 people have traveled out of China, and even though it’s a small number of the population, it has made a huge difference to the global tourism business.”
An Unquantifiable Impact
Domestic tourism will continue to dominate for a while in North America, Europe, Africa and Asia, as these regions ride the Delta variant and as vaccinations advance in an uneven manner. But the pandemic has destabilized the old tourism normal, and the dominance of the western world over the travel industry could be waning coming out of the recovery years.
Skift 2025 Megatrends forecast that China and the Middle East would redefine the most-visited destinations by virtue of a growing middle class, thus shifting travel’s buying power east.
What’s for sure is that the outbound Chinese traveler will return, but it will take time and going the extra mile to lure back those pre-pandemic numbers, which according to ForwardKeys’ latest forecast, would take place in 2026-2027.
East West Marketing’s Xiang said that Indian travelers could be among the first in Asia to travel long-haul in large numbers, but that Chinese travelers won’t be far behind.
“We love shopping, everywhere. That’s a must do thing, you know, when we travel, so there’s spending power. But we don’t know what year this will happen.”
Ultimately, the cost of the prolonged absence of Chinese tourists points to unquantifiable factors — lost cultural connections as a result of the pandemic and a deepening regional divide that only tourism could help begin to bridge.
“When people don’t travel with all the information they receive are either secondhand, they listen to the media they got information from social media. But when they travel, they see the real people, real destination, they will see oh, the people are so great. They welcome us. They are so friendly. They are totally different person from the media,” said Xiang.
Destinations and marketing agencies have a greater responsibility now to help people to build up the connection to understand each other and to understand what’s going on, Xiang added.
“We can control our narrative, and what kind of stories are delivered to the China market, accelerate the digital presence in the China market. There are lots of things we can do right now. The most important thing is, it’s time to rebuild that connection.”
Photo credit: There is significant pent up demand for long-haul travel from Chinese travelers, even as outbound leisure travel remains banned. WabbitWanderer / Visual Hunt