Chinese still travel abroad despite the cost

Nearly three years after closing its borders to nearly all travelers in March 2020 and imposing strict quarantine measures as part of its zero-Covid strategy, China reopened its borders to international travelers and resumed processing passport applications for mainland residents in January 2023. After nearly three years, Chinese people are unable to travel to foreign countries, which causes Chinese tourists to find overseas travel options to be more expensive and scarce.

Nie Min has booked an eight-day trip to Iceland in September with seven other Shanghai retirees who have joined the same tour group. “I want to travel more while my legs are still flexible,” the 58-year-old said, noting that the entire trip will cost nearly 40,000 yuan (US5,000), which she claims is roughly double the cost in 2019.

The first thing frequent travelers like Nie did was check travel schedules. Despite the price of flights still being relatively high, she said that from a budget perspective, she is willing to spend an extra 20 per cent to treat herself for “getting through the coronavirus pandemic”.

Photo By Kamil

Chinese residents, like Nie, appear to be equally enthusiastic about international travel as they are about domestic travel. According to a Bloomberg Intelligence survey, nearly 92% of the 1,088 respondents were planning at least one domestic or international trip by May. According to the survey, more than 92% of respondents were considering at least one overseas trip. According to the survey, Japan and Korea were the most popular pairs of destinations, with 48% and 43% of respondents wanting to visit, respectively. In addition, 40% were considering visiting Hong Kong and Macau, while 35% preferred Southeast Asia.

As the country’s Covid-19 cases recede, China’s travel rebound could pick up speed in February and continue into the second quarter, according to the report. “Outbound Chinese passengers may only recover to 45 percent of 2019 levels this year,” according to a Bloomberg Intelligence survey. According to the China Outbound Tourism Research Institute, 110 million border crossings from mainland China will occur in 2023, accounting for two-thirds of the total in 2019.

Prior to the pandemic, China was the world’s largest source of outbound tourists, with 170 million trips in 2019 contributing US253 billion to the global economy. “Although we are seeing a steep recovery in the number of people traveling,” Eric Zhu, senior associate analyst for aviation at Bloomberg Intelligence, told the Post. According to Zhu, people’s spending on their first trips will increase by 5 to 10%, with survey results showing that 80% of respondents intending to travel planned to increase their travel budgets compared to similar trips in the past.

Economic headwinds have dampened consumption, as household savings in the world’s second-largest economy increased by 17.4% year on year in 2022, the fastest rate since 2010. According to Zhou Mingqi, founder of tourism consultancy Jingjian Consulting, “The tourism industry’s recovery resilience has been extremely low” due to a significant decline in consumer spending and income expectations being negatively affected by the coronavirus pandemic.

Photo By Chibili Mugala

“Travel is an optional consumption that is only done when you have money and leisure, and this will obviously be affected in the long run by the downward spiral of consumer power,” Zhou said.
Although people’s willingness to travel abroad is growing, flight recovery appears to be lagging behind demand. “The airlines are taking a wait-and-see approach to restoring seating capacity,” said Timothy Bacchus, senior industry analyst for aviation at Bloomberg Intelligence. He also mentioned that Chinese people are still hesitant to travel abroad. “The international side will take some time to recover,” he said.
Carriers added 355,000 international seats in February compared to January. According to global travel data provider OAG, international capacity was operating at 18% of the same month in 2019.
In terms of mainland China’s international airline capacity, Hong Kong, Macau, and Thailand were the top three last month.

Looking ahead, the recovery of international flight capacity scheduled from April to June is expected to be approximately 65% of 2019 levels, according to Rob Morris, global head of consultancy at Ascend by Cirium, in a report. Morris stated that while airlines restored some capacity in the first quarter, they will refrain from adding additional capacity in the second quarter. “Visa availability, passenger confidence, and the potential reaction to increasing Covid-19 cases are several potential issues that need to be addressed before the market can truly recover,” he said, adding that airlines may want to wait and see how all of these play out before fully committing to the market.

After the South Korean government lifted restrictions on the issuance of short-term visas to Chinese citizens earlier in February, flights between South Korea and China will gradually return to pre-coronavirus levels beginning on Friday. As Korea is the most popular destination among respondents, Bacchus believes there will be enough time for airlines to increase capacity as demand emerges, particularly during the summer.
However, he added that it is not completely flexible because as airlines fill up their schedules in other markets, they may be hesitant to reduce others if aircraft are committed elsewhere.

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