What Happened To The Chinese Travel Boom Everyone Was Waiting For - It Stayed in China

26/07/2023, 13:09 What happened to the Chinese travel boom everyone was waiting for?
It stayed in China
What happened to the

Chinese travel boom
everyone was waiting for? It
stayed in China
Rather than a boom, the recovery of
international travel in China is likely to
be spread out over 2023 and 2024,
says Mastercard economist David
Mann.
By Monica Pitrelli
4 min. read View original
Are you prepared?
That was the question that many in the travel

industry asked following China’s surprise
reopening announcement in the final days of
2022.
Many assumed that a torrent of travelers would

be lining up to venture outside of China after
three years of harsh “zero-Covid” policies.
Yet, many residents stayed home — either

because they wanted to, or because it was too
difficult and costly to leave the country.
https://www.cnbc.com/2023/07/26/china-travel-boom-happen-but-recovery-is-underway.html 1/6
26/07/2023, 13:09 What happened to the Chinese travel boom everyone was waiting for? It stayed in China
A lack of affordable flights and protracted

waiting times for travel visas to go abroad have
slowed China’s outbound recovery, says
Wolfgang Georg Arlt, founder and chief
executive of Chinese Outbound Tourism
Research Institute.
Domestic airline capacity in China has fully

recovered, yet international flight capacity is
still less than half of pre-pandemic levels, down
nearly 5 million seats, according to Skift
Research’s “State of Travel 2023” report
published last week.
“However, another reason is that domestic

tourism has won in prestige and also in quality,”
Arlt told CNBC Travel.
“For the last holidays, like Dragon Boat race

festival, the domestic tourism level was already
back to 2019 levels. Outbound travel is only
back to about one-third of 2019 levels [in
terms] of number of trips.”
Flight capacity and geopolitics

Asia-Pacific was predicted to be the primary
beneficiary of China’s border reopening.
However, the number of Chinese visitors to

Thailand, Singapore, Indonesia and the
Philippines was down at least 60% this May,
compared to the same time in 2019, according
to Reuters.
Now, Chinese travelers may be looking to

venture beyond the region.
According to a June survey by the research

intelligence company Morning Consult, Chinese
interest to visit Europe, Central America and
Antarctica is up — with plans to visit the Middle
East and Northern Africa, namely Egypt, rising
the most.
However, travel plans to go elsewhere, most

notably the United States, have dropped,
according to the survey, which was summarized
in a report published by Morning Consult in
July.
Worsening ties between China and the West

have not helped the situation.
Scott Moskowitz
Morning Consult
A senior analyst at the company, Scott

Moskowitz, attributed this to two main factors:
flight capacity and geopolitics.
“While flights to the Middle East and North

Africa have seen a dramatic recovery relative to
pre-pandemic levels, flights to North America,
especially the United States and Canada, have
seen the most limited recovery,” said
Moskowitz. “Worsening ties between China and
the West have not helped the situation.”
The war in Ukraine has further exacerbated

issues because North American carriers cannot
fly through Russian air space which makes
flights between China and North America
longer and more expensive, he said.
“Chinese carriers have not been bound by the

same restrictions, which have made Western
carriers more hesitant to resume less
competitive routes,” he said. “Though recently,
Chinese airlines quietly added a small number
of routes that avoid Russian air space.”
As to increased interest to vacation in the

Middle East and Northern Africa, Moskowitz
said: “China has been on a charm offensive in
the region recently, deepening diplomatic and
business ties.”
“This creates business need for increased

flights but has also seen increased Chinese
media coverage and general interest in the
region which will have knock-on effects for
more general travel interest.”
Spending is down
Travel spending has also been disappointing
this year, as Chinese tourists tighten their purse
strings while the country’s post-Covid economic
recovery struggles to find a foothold.
“Chinese are more careful with spending due to

the economic slowdown,” said Arlt.
In Skift’s report, travel ranked No. 3 on a list of

expenditures where Chinese travelers said they
would increase spending this year — after
dining out, and fitness and wellness. Yet only
8% of respondents said they planned to do so.
Record high unemployment among Chinese

youth likely isn’t helping, as Millennials and Gen
Zs in other countries led the way in
international travel bookings.
Still, interest is increasing

Though 2023 hasn’t materialized the way much
of the travel industry had hoped, the number of
Chinese leisure travelers who say they want to
travel abroad has nearly doubled since last year
— rising from 28% to 52%, according to
Morning Consult.
Similarly, the company’s data shows interest in

business travel has nearly tripled, while plans to
go overseas for education, to see family and for
medical tourism, are also on the rise.
This mirrors Skift’s report, which shows 50% of

Chinese travelers say they plan to travel
internationally in the next 12 months.
Travel fears, such as concerns about

contracting Covid, are also softening, according
to Morning Consult. It was the top worry for
travelers in 2022, but fell to the least of their
concerns this year, according to the survey.
A ‘spread out’ recovery

Though Chinese residents have traditionally
preferred to spend on discretionary items, the
Mastercard Economics Institute expects to see
them shift toward discretionary services such
as travel, according to its “Travel Industry
Trends 2023” report.
“Despite a love for shopping, we expect

travelers from mainland China to spend more
on experiences, rather than things, after a zero-
Covid environment,” the report said.
David Mann, Mastercard’s Asia-Pacific chief

economist said he doesn’t expect travel
recovery to slow down in Asia-Pacific, despite
ongoing economic instability around the globe.
“As capacity increases, costs should come

down, stimulating more travel,” he said.
Rather than a “boom,” international travel in

China is slowly, yet steadily getting back on
track, Mann said.
“China’s international travel recovery is being

spread out over 2023-24 ... an ongoing positive
for the industry.”

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26/07/2023, 13:09 What happened to the Chinese travel boom everyone was waiting for?

What happened to the

4 min. read View original

Are you prepared?

That was the question that many in the travel

Many assumed that a torrent of travelers would

Yet, many residents stayed home — either

A lack of affordable flights and protracted

Domestic airline capacity in China has fully

“However, another reason is that domestic

“For the last holidays, like Dragon Boat race

Flight capacity and geopolitics

However, the number of Chinese visitors to

Now, Chinese travelers may be looking to

According to a June survey by the research

However, travel plans to go elsewhere, most

Worsening ties between China and the West

A senior analyst at the company, Scott

“While flights to the Middle East and North

The war in Ukraine has further exacerbated

“Chinese carriers have not been bound by the

As to increased interest to vacation in the

“This creates business need for increased

“Chinese are more careful with spending due to

In Skift’s report, travel ranked No. 3 on a list of

Record high unemployment among Chinese

Still, interest is increasing

Similarly, the company’s data shows interest in

This mirrors Skift’s report, which shows 50% of

Travel fears, such as concerns about

A ‘spread out’ recovery

“Despite a love for shopping, we expect

David Mann, Mastercard’s Asia-Pacific chief

“As capacity increases, costs should come

Rather than a “boom,” international travel in

“China’s international travel recovery is being

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