China’s Outbound Travel Slow to Recover Despite Reopening

China’s surprise reopening announcement in late 2022 prompted speculation about a surge in outbound travel after years of strict “zero-Covid” policies. However, the reality has been different, with factors like flight capacity and economic concerns impacting the pace of recovery.

While domestic airline capacity in China has fully rebounded, international flight capacity remains at less than half of pre-pandemic levels, according to Skift Research’s “State of Travel 2023” report. The lack of affordable flights and prolonged visa processing times for international travel have hindered the outbound recovery.

Wolfgang Georg Arlt, CEO of the Chinese Outbound Tourism Research Institute, notes that domestic tourism has gained prominence and quality, with domestic tourism levels already reaching 2019 levels during recent holidays. In contrast, outbound travel has only reached about one-third of 2019 levels in terms of the number of trips.

The Asia-Pacific region, predicted to benefit from China’s border reopening, has witnessed a decline in Chinese visitors to countries like Thailand, Singapore, Indonesia, and the Philippines. Despite this, Chinese interest in visiting Europe, Central America, and Antarctica has risen. However, travel plans to places like the United States have dropped due to factors such as flight capacity and geopolitics.

Chinese travelers’ cautious spending due to economic slowdown has also impacted travel. Skift’s report shows that while travel ranks third in terms of expenditure increase, only 8% of respondents plan to do so. However, there is a growing interest in international travel among Chinese leisure travelers, with the number of those wanting to travel abroad nearly doubling since last year.

The Mastercard Economics Institute expects Chinese consumers to shift towards discretionary services like travel after a “zero-Covid” environment. Despite ongoing economic instability, travel recovery in the Asia-Pacific region is expected to continue due to increasing capacity and reduced costs.

While the recovery is gradual, experts believe China’s international travel market will steadily rebound over 2023-24, providing a positive outlook for the industry.