Demand for China’s outbound travel picks up

The Japanese team followed; a group photo of the Chinese tour group visiting Takayama

On August 10, China added 78 new countries for group tours, and the number of approved destination countries reached 138. The Ministry of Culture and Tourism announced that Ctrip Group will launch more than a thousand products.

Destinations the Shanghai-based global travel company is eyeing include Japan, Australia, the UK, Germany, Israel, the US, Morocco and India. The first Japan tour is scheduled for September, followed by a first tour to Australia, Morocco and Israel around the National Day in October.

Chinese group in Takayama
The demand for China’s outbound travel continues to pick up, and the average weekly outbound flight volume has recovered to more than 50% of the pre-epidemic level; the picture shows a Chinese tour group in Takayama, Japan

According to data from Ctrip Group, outbound travel bookings by mainland Chinese users rose 44% month-on-month in July – Hong Kong, Tokyo, Singapore, Macau, Bangkok, Osaka, Phuket, Seoul, Kuala Lumpur and London have been popular summer destinations.

A spokesman for Ctrip Group said that as of August 7, the average weekly outbound flight volume has recovered to more than 50% of the same period in 2019.

Its data shows that the average price of cross-border flights has fallen by almost 80% compared with the same period last year, but it is still 10% to 20% higher than in 2019.

Flight capacity and visa availability are also uneven, with supply still lagging demand, Ctrip said.

Alexander Glos, CEO of China i2i Group, points out that the recovery of Chinese outbound travel has accelerated: “In January, when the market officially reopened, international travel from China accounted for only 2% of the 2019 total. , the number of outbound tourists has rebounded by 40% to 60% compared with before the epidemic, which is a very commendable recovery in a few months.”

However, Wolfgang Georg Arlt, chief executive of the China Outbound Tourism Research Institute (COTRI) and the Center for Meaningful Tourism, said the first half of the year, following the announcement on Dec. The number of tourists was much lower than expected.

According to data from COTRI, the number of Chinese outbound tourists in the first half of 2023 will only be about 26 million, of which more than 17 million will go to Hong Kong and Macau.

Alter shared: “The restart has been hampered by missing passports, insufficient air connections, high airfares and, for many destinations, very slow processing of visa applications.

“Beyond that, Chinese consumers have become more cautious in spending, and many are waiting for lower prices, especially for air tickets.”

He said the Aug. 10 news was less important because many Chinese wanted to travel on their own and in small, self-organized groups, which they could do from January if they could get a visa.

Alter argues that the Chinese have become less optimistic than in the past, and the wealthier are less secure about the future.

He predicts a return to 2019 levels in 2024 once major visa hurdles are resolved.

Wolfgang Georg Arlt COTRI 640
Arlt: Chinese consumers become more cautious in spending

Gary Bowerman, director of travel and tourism research firm Check-in Asia, which is based in Hong Kong, Shanghai and Kuala Lumpur, explained that the Chinese government has made it clear that group travel will be resumed in stages in order to provide support for Chinese airlines. Companies, online travel agencies provide convenience. After three years of focusing on the domestic market, it is time for travel agencies and tour operators to expand their business.

Bowerman added that the phased release of the three ADS country lists suitable for Chinese group travel in the past eight months (January, March and August) has influenced the capacity planning and passenger selection of Chinese airlines.

He commented: “While 2023 has seen relatively low visitor numbers to regional destinations so far, this is to be expected as demand and supply across the Chinese outbound travel market are recalibrating.

“China is a large and complex market that has been severely disrupted by the impact of Covid-19. Some OTAs do not expect international air traffic to reach 2019 levels until mid-2025, although some key markets will recover faster.”

Bowerman pointed out that the expansion of group travel destinations should increase air capacity in popular tourist destinations. In the United States, for example, these flights will be filled by group tours and individual tourists.

He noted that what Chinese OTAs refer to as a “four-hour flight radius” will be an important metric to watch, adding that “China’s domestic destinations and the Asia-Pacific region will drive the recovery of individual and group travel in China this year”.

China i2i Group’s Glos believes that China’s strategy of connecting second-tier cities with global hubs remains critical, as these cities offer significant growth potential due to rising disposable income.

Glos continued: “Currently, the business travel and high-end FIT markets dominate China’s outbound travel, and this trend is likely to continue through 2023 and the first half of 2024. Group travel is expected to see a bigger increase by mid-2024. scale.

“China is unlikely to reach pre-COVID travel levels before the second half of 2024. The return of mass-market group travel and total visitor numbers and spending will determine the pace of recovery.”

Sienna Parulis-Cook, director of marketing and communications at marketing solutions firm Dragon Trail International, observed that each time China’s National Immigration Administration released new data on border crossings for a specific date or during a holiday, the numbers moved closer and closer to the 2019 baseline, By the Dragon Boat Festival in June, the recovery rate was close to 65%.

Parulis-Cook noted that the Aug. 10 news has the potential to stimulate and facilitate increased travel across many different population groups and market segments.

“The policy change allows for the resumption of group tourism, but also of travel packages, starting at least with flight and hotel bookings.

“This could significantly expand travel sales for individual and group travelers, and make selling and buying outbound travel much simpler than travelers needing to book individual parts of a trip,” she explained.

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