Is the Dragon going virtual?

Impact of COVID-19 on Chinese outbound tourism to

Europe

Rohit B. Mishra, Hongbing Jiang

School of Management Engineering, Zhengzhou University, Zhengzhou, China

Problem Statement: This article seeks to understand the impact of COVID-19 on Chinese

outbound tourism to Europe.

Research Question: How has the pandemic affected the tourism prospects of the world and

Europe? How economic, social and physiological factors will affect the Chinese tourist’s

decision about outbound tourism? How has virtual tourism changed in China? Is virtual tourism

a threat to real tourism? What can Europe do to attract Chinese tourists after international

tourism starts?

Research Methodology: Data was collected from UNWTO, IMF, ETC, twitter and other

sources. The main factors affecting the outbound tourism behavior of Chinese tourists were

analyzed. The paper analyzes the physiological, social and financial aspects of Chinese tourists

and how these parameters are going to affect tourism in this COVID world.

Result: The times look bleak for Chinese arrivals in Europe. The way to resilience looks quite

difficult. It will take many months if not years for the Chinese outbound tourism to Europe to

reach the pre COVID level. Virtual tourism is likely to enjoy huge growth in China until world

order gets back to normal

Conclusion: The research concludes that European tourism industry faces various challenges.

Its high time that the government of China and European Union come forward to revive the

tourism industry. Various measures should be taken by the business partners and the

government to revive Chinese outbound tourism to Europe.

Originality and Significance: The study fills the void present in the research of effects of

pandemic on Chinese outbound tourism to Europe and the rise of VR tourism in China. The

paper suggests a number of potential directions towards the path of resilience.

Keywords: Chinese outbound tourism, Chinese outbound tourism to Europe, virtual tourism

in China, COVID-19

1. Introduction

The corona has led to unprecedented emergency in the world. In this interconnected world,

COVID-19 had led to a spiral effect on the economic, social, physiological and health systems.

All economic areas have witnessed huge disruptions. Tourism is one of the worst affected

sectors. The first quarter of 2020 saw huge cuts in international tourist arrivals. According to

(UNWTO), a drop of 22% was witnessed in the first quarter of 2020. The international arrivals

nosedived by 57% in March alone. 67 million less international arrivals and loss of about USD

80 billion from export revenues in the first quarter of 2020 (UNWTO). Asia-Pacific saw a 35%

decline in arrivals. Arrivals in Europe, Americas, Africa and Middle East decreased by 19%,

15%, 12% and 11% respectively (UNWTO).

International Tourist Arrivals (% change)

10 6 7
4 4 4
5 2
0
-5 World Europe Asia and Americas Africa Middle East
-10 the Pacific
-15 -12 -11
-20 -15
-19
-25 -22
-30
-35
-40 -35

2019 2020* January - March

 Fig. 1. World Tourism Organization (UNWTO) © * Provisional data

The world economy is projected to decrease by 3% in 2020 according to the International

Monetary Fund (World Economic Outlook, April 2020). This will heavily impact outbound

tourism. As most of the world has restricted or stopped international arrivals, outbound tourism

has come down to nil all around the world. Current situation is extremely unprecedented and it

may decline internationals tourist arrivals by 58%-78% in 2020 (UNWTO). This will be around

850 million to 1.1 billion less international tourist arrivals and a loss of about 0.86 to 1.2 trillion

USD in revenues (UNWTO).

All the above factors give an opportunity to study the impact of COVID-19 on outbound

tourism. There have been various studies on impact of COVID-19 on economy and tourism,

but there is no study to gauge the impact of COVID-19 on Chinese outbound tourism. Chinese

being the highest spending outbound tourists, it is important to study their outbound tourism

behavior during this pandemic. Also, Europe is the one of the most famous outbound

destination for Chinese tourists, hence the study focuses on Europe.

2. Literature review

China is one of the global powers and tourism is one of the important industries in its

globalization process (Ma, Ryan & Bao, 2009). Tourism propels the development of socialist

economy market in China (Xiao, 2006). Tourism (especially outbound tourism) is a young

industry (Zhang, Pine & Zhang, 2000), and has huge potential to grow further. Most researchers

(Yun & Joppe, 2011) believe that outbound tourism started in the 1980’s from China and it

progressed in the following steps: Chinese travelling to the SAR’s of Macao and Hong Kong ,

then to bordering countries in Asia and other Asian countries (countries like Vietnam, Thailand ,
Japan) and finally travelling to long-haul destinations beyond Asia (regions like Europe,

America).

Earlier studies show that economic and social factors have catapulted outbound tourism from

China. One of the primary reasons in making China a great outbound tourism market is the

great economic boom the country has witnessed during the last decades (Lin, Liu, & Song,

2015). The political liberalization, acceptance and tolerance for different and diversified social

and cultural values have also helped the outbound tourism to grow (Cai, Li, & Knutson, 2008).

The ADS system and the simplified visa process have significantly helped the outbound

tourism from China (Wang & Davidson, 2010). The Approved Destination Status (ADS) was

launched by the Chinese government in the year 1995.The ADS manages and regulates the

outbound tourism from China (Arlt, 2006). By the year 2011, around 140 countries received

the ADS from the Chinese government. In recent years, trend of travelling to long distances

for outbound tourism is gaining popularity among Chinese tourists. More precisely, Europe is

fast growing as a popular tourist market for the Chinese travelers (Xie & Li, 2009). Europe is

even the region with one of the highest number of ADS countries.

China is a last starter in outbound tourism, but it grew exponentially to make itself as one of

the most important tourism powerhouses. However, there is still little research literature on

outbound tourists (Sparks & Pan, 2009). Western countries lack the full picture of Chinese

outbound tourism market (Li, Harrill, Uysal, Burnett & Zhan., 2010). There has been some

research work in recent times, but most of them focus on areas like travel motivation of Chinese

travelers, destination selection, accommodation choices, market overview, etc. Research in

these areas is summarized by Jin and Wang (2016). Accommodation and found are prime

considerations for Chinese outbound tourists according to these researches. Safety parameter

of destination, cleanliness, value for money are also important issues for Chinese outbound

tourists (Li, Lai, Harrill, Kline, & Wang, 2011). Important deterrents include visa rules, cultural
differences, language issues, media reports (Sparks & Pan, 2009; Li, Zhang, Mao, & Deng,

2011; Wu, 2015).

In recent days various studies are published on COVID-19 and its impact on tourism. Most of

the studies agree that the COVID-19 will have unprecedented impact on tourism. The pandemic

is not just different, but also profound in ways it has affected the world. Long-term

transformational and structural changes are required for the tourism industry. The global impact

has challenged the interconnected systems leading to global recession and depression. Hall et

al. (2020) says that crises can act as a trigger for change, but none of the past crises have been

able to bring reasonable transition in tourism. Gretzel et al. (2020) insists for transformation in

electronic tourism (e-tourism) research for the future of tourism industry. He insists mainly to

focus on making institutional logics, value systems, scientific paradigms and technology

notions visible and transformable. Wen et al. (2020) suggests an inter-disciplinary research for

creative and flexible ideas in tourism, whereas multidisciplinary research is proposed by

(Gössling et al., 2020; Hall et al., 2020). However, there is no study to specifically focus on

the impact of COVID-19 on Chinese outbound tourism to Europe. Also, this paper is unique

for its focus on social and physiological factors (like rise of racism, phobia of contacting the

corona virus, etc.) in addition to the economic factors like recession and income depression.

The anti-China and anti-Asian sentiment have made the situation even complicated for Chinese

outbound tourists. These factors have made the tourists to find ‘Holiday from Home’ option.

This has led to rise of virtual travel platforms in China (CGTN). The paper will also analyze

the rise of virtual tourism in China and their impact on outbound tourism in China.

3. Methodology

3.1 Measuring impact of COVID-19 on Chinese Outbound Tourism to Europe

According to Statista, 15 million Chinese visited Europe in the year 2019. These visitors spent
around 23 billion USD in the travel and tourism industry. As per estimates, in the year 2020,
the pandemic could cause up to 25 % drop in the number of Chinese tourists in Europe.

Chinese tourists in Europe(% change)

0%
-5%
-10%
-15%
-20%
-25%
-30%
Most likely SARS Downside

Fig. 2. Source: Statista 2020

83% European destinations have restricted international tourism arrivals due to border closures

(UNWTO, COVID-19 Related Travel Restrictions) as per reports till 27 Apr 2020. After the

phenomenal international tourist arrivals in January and February, European countries

witnessed a huge 60% fall in arrivals in March. The result was a decrease of 19% YoY decrease

in international arrivals in the first quarter of 2020.

According to a recent ETC (European Travel Commission) member survey, 100% of

respondents anticipate decline in tourist arrivals in 2020, with most respondents expecting a

decline of about 30-40%. Domestic and intra-European travel will recover more rapidly as the

easing of restrictions are expected earlier, while the long-haul travel will take more time to

recover. Some destinations expect steep GDP and employment contractions, and others

mention losses between 60-70% in terms of tourism revenue in 2020.

The coronavirus outbreak has brought Chinese outbound travel demand to a total halt. The vast

majority of destinations saw no growth in Chinese arrivals and overnights during the first

months of the year, with marked declines in arrivals observed in Croatia (-58%), Turkey (-

47.9%), Malta (-42%) and Romania (-38.5%). Iceland and Monaco also saw Chinese arrivals
fall in excess of 25%. Iceland and Croatia have already felt the pinch of travel restrictions

owing to the pandemic with US arrivals declining by 45.8% and 58.5% respectively based on

data to March.

Chinese outbound travel was severely impacted by the COVID-19 outbreak and by subsequent

travel restrictions. According to ETC (European Travel Commission) report for Jan to Mar

2020, a total of 17 destination countries reported growth on neither metric (although data for

both Croatia and Iceland is to March). Some of the de-clines in arrivals from China were very

marked. China is a small but growing (and high spend) source market for Croatia, accounting

for 1.6% of arrivals in 2019. It saw a decline in arrivals of 58.4% in 2020. Turkey saw a steep

decline in arrivals of 47.9%, Malta of 42.0% and Romania of 38.5%. Iceland and Monaco both

fell in excess of 25%. Another notable fall was recorded in Spain (-13.5%), while both

Montenegro and Slovenia saw a decline in arrivals accompanied by an increase in nights. Only

five countries saw an increase in both metrics from Chinese tourism: Slovakia (which saw a

65% increase in arrivals), Portugal, Serbia, Germany, and Estonia. Bulgaria saw a small

increase in arrivals but did not report on nights.

3.2 Measuring impact of COVID-19 on economic factors affecting Chinese

Outbound tourism to Europe

Global economic growth has been severely impacted by COVID-19. Consumer confidence is

decreasing with sharp increase in unemployment. Consumer spending is likely to be confined

to essentials. Chinese consumers will likely avoid or decrease spending on travel and tourism

in the near future. The spending for tourism will mostly be about domestic travel on important

occasions, family reunions and long holidays. The consumers will be skeptical to spend a huge

amount on outbound travels in the near future. As the economic engine around the world halts,

tourism will be the last thing in the to-do list of people around the world.
 Table 1. World Economic Outlook Projections (Percentage change): IMF | April 2020

Economic Group/Country 2019 2020 2021

Projections Projections
Advanced Economies 1.7 -6.1 4.5
Emerging Market and Developing Economies 3.7 -1.0 6.6
China 6.1 1.2 9.2
World 2.9 -3.0 5.8

3.3 Measuring impact of COVID-19 on social and physiological factors affecting

Chinese Outbound tourism to Europe

In general, “consumer’s psychology” theories show that consumer’s behavior is heavily

influenced by the society and culture (Pizam & Sussman, 1995). Travel and holidays as

consumer goods are influenced by culture and the environment affects its marketing and

consumption (Reimer).

Social factors influence individuals. We all live in an interconnected world and form the

cultural, subcultural and social system of the world. Our relationship with the environment and

individuals is concerned by our personal traits (Wong & Lau, 2001). Nationality is one of the

key factors in consumers tourism behavior (Pizam and Sussman 1995; Bond, 1991). Unique

Chinese tradition and cultural values like modesty, filial piety, reciprocation and sense of

shame have strong influence on their tourism behavior (Mok & Armstrong, 1995).

Tse DK (1996) studied the social behavior of Chinese tourists. He found Chinese tourists

behavior authoritarianism in nature, having association to trust and values. Chinese tourists

tend to travel in groups, and they give special importance to social harmony. For example,

(Triantis, H.C 1994) have found that Chinese people like to travel in groups. They promote

social relationships by consumption activities. Other prominent studies show that giving gift

after travel can build up a relationship (Kotler. P., Bowen, J., and Makens J., 2003).
An epidemic is not just a medical phenomenon. It affects individuals and society on many

levels. Stigma and xenophobia are two aspects of the social impact of a pandemic outbreak.

The spread of COVID-19 has sparked anti-China and anti-Asian sentiment across the Europe

and the world. Hate, racism and xenophobia in social media targeted at the people of Chinese

origin and the broader Asian communities is negatively impacting Chinese physiology for

outbound travel.

A report (Ziems, He, Soni, & Kumar) analyzed tweets that from 15 Jan 2020 to 17 Apr 2020.

A total of 891,204 hate tweets and 200,198 counter-hate tweets targeting Chinese community.

Hate content is always in excess of the counter-hate(measuring the number of tweets). In this

environment of racism, Chinese people will avoid outbound travels. This will adversely affect

the Chinese outbound tourism around the world including Europe.

Fig. 3. Source: GeogiaTech

3.4 Measuring impact of COVID-19 on Virtual Tourism in China

VR and related technologies revolutionize the tourists experience in travel and tourism

products and services. Yet, in travel and tourism literature, no study reviews the current state

of VR and AR-related studies on tourism sector due to corona virus.

Before the pandemic, tourists were more engaged in using VR and AR for experience

destinations, hotels or museum before taking the decision of travel to the place than ever before

(e.g., Wang, Yu, & Fesenmaier, 2002; Buhalis & Law, 2008; Fotakis & Economides, 2008).

The tourist companies and the marketing teams should effectively use VR technologies to

provide a near-real experience. VR should be used as an effective communication tool, as an

internet marketing support tool helping in information gathering and search and also in the

decision making .As Cho, Wang and Fesenmaier (2003) indicate, “when tourists are seeking

information about a travel destination what they want to know is not only about physical

characteristics of the destination but also the experience of the destination” (p.4).

However, COVID-19 has given new fire and dimensions to use of VR. With the world locked

up, international flights cancelled and strict measures of quarantine and social distancing, VR

looks to enjoy a high popularity among Chinese people for both domestic and outbound tourism.

A report published by CGTN Virtual tours offer 'holiday from home' alternatives’ shows that

a huge number of travel destinations are going virtual to cope up with people’s travel demands.

The tourism market is fast moving to VR and various types of virtual tourism products like

audio files about various tourist destinations, virtual sightseeing of palaces, museums, zoos,

natural scenery etc. are available. The platforms offer both domestic and sightseeing options.

Ctrip, one of the biggest online travel agencies of China is offering around 7000 audio guides

on its mobile application (CGTN). These guides cover more than 3000 popular tourist

destinations in more than 48 countries. In addition, large e-commerce platforms are helping

tourism-focused businesses stay afloat. Alibaba added an “online field trip” feature to its

commercial livestreaming platform, Taobao Live, that allows museums, zoos, and aquariums

to attract virtual crowds (SixthTone). Many companies are functioning as dedicated virtual

reality tourism companies. The below table shows the popular virtual tourism platforms in

China and the VR products available on them.

 Table 2. VR tourism websites in China

Sr. No. Websites VR Products available

1 http://www.quanjingke.com/ Sightseeing
2 http://www.expoon.com/ Sightseeing, real estate, hotel,
food, school, expos, car,
public utilities
3 http://taagoo.cn/ Sightseeing
4 http://www.vra.cn/ Sightseeing, expos
5 http://visitbeijing.com.cn/ Sightseeing
6 http://www.shaoxingtour.cn/ Sightseeing
7 http://www.720zh.com/ Hotel, education, sightseeing,
automobile, real estate, yacht
industry, conference,
supermarket, street
8 http://www.museumcn.com/ Museum sightseeing,
exhibitions

If we look only at the tourism products available, above portals provide virtual tours of

domestic and foreign destinations, Sightseeing holiday, Exhibition Tourism, Health

convalescence, Eco-tourism, Cultural and sports exchanges. Analyzing product categories, we

find approximate share of virtual tourism products available on these platforms:

Virtual Tourism Products

Cultural and sports

exchanges

Sightseeing
Eco-tourism holiday
Health
convalescence
Exhibition Tourism

Sightseeing holiday Exhibition Tourism Health convalescence

Eco-tourism Cultural and sports exchanges

Fig. 4. Based on approximate number of clicks on the websites in Table.1

4. Data Interpretation and Analysis

The above analysis and reports clearly show that outbound tourism from China to Europe will

decrease exponentially further this year. The main reasons that can be interpreted are

• International flight closure, strict visa rules, necessary quarantine and social

distancing measures will be the primary reason for sharp fall of Chinese Outbound

tourism to Europe.

• Rise of racism will also be another major factor driving the shine out of outbound

tourism. As the countries and world leader start doing blame game to appease the

local public, rise of hatred and xenophobia will make outbound tourism less likely

for Chinese Tourists.

• Virtual Tourism is booming in China. Virtual platforms are catering to both

domestic and international destinations. The number of domestic destinations

available on VR platforms are much more than the foreign destinations, but the

platforms are adding outbound destinations of Europe and other counties at a rapid

pace to get more customers. Virtual tourism is the only available option for

outbound tourists for now. Hence, virtual tourism has changed from

complementing the real travel to substituting the real travel. This has huge

implications for near term tourism for the European industry.

5. Results and Discussion

Europe’s economy is heavily dependent on outbound tourism. Chinese are source of huge

outbound tourists to Europe. Their arrivals to European counties are very much required for

the survival of the whole tourism industry in Europe. Various reports already show the

significance of revenues obtained from Chinese tourists. These makes understanding the effect

on Chinese outbound tourism in these times of pandemic extremely important and urgent. The

COVID-19 pandemic throws new challenges and opportunities for European countries. The

current situation demands urgent and innovative steps for reviving the tourism. Few steps that
can be taken to increase Chinese Outbound tourism are below:

B2C Engagement: During this global health crisis, the business world should express heartfelt

concern and extent support for Chinese citizens worldwide. They should closely monitor

developments worldwide and offer practical advice to Chinese travelers on local travel needs,

Chinese consular services, medical resources and where applicable, how to make changes to

bookings. Businesses should establish a welcoming tone on all messaging platforms. The

institutions must avoid fear-mongering. Social media should express support for China and

outline any measures that should be taken. Steps like offering preventative measures, double-

checking communications with mainland Chinese tourists, educating non-Chinese staff to

avoid any internal insensitivities and responding to negative sentiment should be taken. A

xenophobic misstep could damage an organization for a period of time beyond the coronavirus.

B2B Engagement: Although most of the travel expos and roadshows scheduled over the

coming months will be canceled, travel companies should use platforms like DingTalk,

WeChat Work, and Tencent Meeting to makes sure they stay active and relevant. Chinese

professionals are available to engage with, and they will appreciate any help and support the

businesses can offer in the interim. For example, Arab Tourism Market (ATM) organized a

virtual event to attract Middle Eastern tourism professionals to discuss how and when to start

planning for inbound Chinese tourists, which will be held on June 1-3, 2020. The event will

host the "Virtual China Tourism Forum", with the theme of China's leisure and Covid-19-

related restrictions and the potential of China's outbound leisure market after the growth of the

domestic tourism industry. Europe should do similar events to attract the Chinese tourists.

Digital Strategy: At present, offline engagements aren’t possible, so attention should shift to

social media platforms. All the parties involved in tourism should keep updating the Chinese

tourist about the upcoming events. They should continuously keep the prospective tourists
updated about special tourist places, museums, special shopping events, etc. VR should be used

to complement real tourism, don’t let it substitute it. The European countries should start virtual

tours with explanation in Chinese language. They can use the VR platforms to create interest,

as a platform to sooth all the concerns of the future Chinese tourists and also as a marketing

tool. VR can to offer potential tourists a near-real experience of their planned trip. Virtual

reality should be wisely used for sales and promotional purposes by the tour operators and

travel agents.

Government to Government talks: Governments around the world have intervened in

mobility of people with controls on transportation channels and immigration issues. Most of

the governments have cancelled scheduled passenger flights and are running only special

chartered flights for evacuation of their nationals. Other modes of international arrivals are also

reduced or stopped. Thus, COVID-19 has increased the intervention and control of

governments in the operations and functioning of the tourism industry. The COVID-19

pandemic is unique as it has resulted in various policy changes related to travel and tourism

(Hall et al. 2020). The policy makers in China and European countries should come up with

policy changes to ease travel restrictions. Special measures like creation of green travel channel

(travel bubbles)for Chinese tourists, decreasing or removing quarantine measures, offering

special privileges, simplifying visa processing, waiving off visa processing fees, etc. should be

taken.

Increased technology use: COVID-19 can be tackled only with increased use of technologies.

Artificial Intelligence, robotics focused on travel needs and other digital technologies should

be used to combat the COVID-19. All the stakeholders involved in the outbound tourism

industry for Chinese should remove health and safety concerns of the tourists. The travel

agency in China to the tour handlers in Europe, the consular agencies, tourists’ cities, all should

come forward to clear all the health and safety concerns. Tracing mobility through tracing apps,
touchless booking and delivery of products and services, digital health passports, crowd control

technologies for social distancing and crowd management should be used. Big data should be

used to get real time insights on huge amounts of data related to tourist’s movement, their

health condition and safety. Tourists places should be sterilized properly removing any worries

of the virus. All entry points should make proper arrangement for measuring body temperature.

There should be a proper support channel for anyone found positive with the corona virus.

Special helpline numbers, website, APP or any other SOS platform can also be promoted to

help anyone in need.

Capture the golden travel weeks with special pre-holidays sales and offers: The Chinese

outbound tourism mostly takes place during the long holidays of National day and Spring

festival. European countries should come up with innovative, welcoming and appealing

strategy to attract Chinese outbound tourists to Europe. With the prediction of the world

opening up gradually after July-August 2020, all the stakeholders should focus on the coming

National day holidays and the 2021 spring festival

6. Implications and Further Scope

The study presents the impact of COVID-19 on Chinese outbound tourism to Europe. Currently,

lot of factors have negative impact on Chinese outbound tourism to Europe. The paper presents

the various challenges, the rise of virtual tourism in China and how all these factors will

influence the outbound tourism market. The data used for study is mostly till May 2020,

however more damage will be done in next quarters. Further study will depend on the latest

reports on travel and tourism, and the way COVID-19 pandemic unfolds.

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Declaration: We, hereby certify that the submitted manuscript is an original work and has

not been submitted to any conference, journal or magazine. The similarity with other

available works, if any, is below 15%.