There is an influx of Chinese tourists to a country near you

Chinese tourists are heading abroad for the extended May holidays at pre-pandemic levels, accelerating the recovery of what was once the world’s largest travel market.

Outbound travel between April 27 and May 5, including the five-day break that started Wednesday, is just 7% below 2019 levels, according to ForwardKeys, a travel forecaster that analyzes airline tickets, travel agencies and other industry data. The last-minute rush has seen bookings rise faster than expected based on ticket sales in early April, the travel insights company said. Meanwhile, domestic ticket sales exceeded 2019 levels by 4% over the period.

The data, along with results from Bloomberg Intelligence’s China Traveler Sentiment Survey, show demand is recovering despite concerns that the country’s sluggish economy is weighing on consumer confidence and spending. A quick return of Chinese travelers, who spent nearly $248 billion on travel abroad in 2019 before the pandemic effectively shut down tourism, is key to filling a major gap in the global travel industry.

“We’re well ahead of the pace now — that’s what it comes down to,” said Tim Bacchus, senior industry analyst at Bloomberg Intelligence. “We are seeing an acceleration and increase in expectations regarding China’s outbound travel. It is recovering faster than what the sector expected at the beginning of this year.”

According to data from the World Travel and Tourism Council, Chinese travelers made 170 million trips abroad in 2019 and their spending accounted for 14% of global tourism revenue. Analysts had expected outbound tourism in China to remain stable this year, with some predicting a return to pre-Covid-19 levels in 2025.

There are now several signs that the Chinese revival is gaining momentum. Bloomberg Intelligence expects international air travel from the continent to reach 90% of 2019 levels by the end of the year after a strong first quarter – up 5 percentage points from January.

Domestic travel is also booming. China’s train stations saw a spike in travelers on May 1, the start of the Labor Holiday, local media reported, with images of train stations packed from wall to wall. More than 1.4 billion domestic trips were made in the first quarter, an increase of 17% compared to last year, China Central Television reported. Holidaymakers in the country spent 1.52 trillion yuan ($210 billion) last quarter, also up 17%, CCTV said.

“The revival of international travel, coupled with robust demand for domestic travel, paints a promising picture for the sector in China,” said Nan Dai, China market analyst at ForwardKey. “The Chinese market’s robust demand is also driving the global tourism recovery and supporting jobs and businesses that rely on tourism.”

The main headwind that could prevent a full recovery of overall international flights for the Chinese market to 2019 levels this year is the lack of foreign passengers heading to China, BI’s Bacchus said. Strained relations with the US have translated into travel, while European holidaymakers have also not returned in large numbers, despite China relaxing visa rules for some countries.

Destinations in Asia, including Malaysia, Singapore and Indonesia, are expected to be among the biggest beneficiaries of the increase in Chinese travellers. Traditionally, Hong Kong and Macau are also among the favorite and easily accessible destinations, and ForwardKeys considers these trips as outbound trips.

Chinese holidaymakers also favor Japan, where a weaker yen helped attract more than 452,000 mainland visitors in March. Chinese visitors ranked third among international arrivals in March – although their numbers were still around 35% below pre-Covid levels.

Outside of Asia, Europe is the preferred destination during the extended Labor Day holiday, according to ForwardKeys. Bookings for Italy are up 19% on 2019 levels, while the UK sees a 12% increase. And Beijing’s push for travel destinations in the Middle East, part of the country’s Belt and Road Initiative, is working: The United Arab Emirates was the top destination outside Asia for May Day travel.

Among mainland Chinese surveyed in Bloomberg Intelligence’s April travel sentiment survey, 58% said they have booked an overseas trip in the next three months, up from 54% in January.

“We thought Chinese consumers are quite strapped for cash, hurt by the stock market and the real estate sector slump,” Bacchus said. “What we actually see is that travel is still a priority for the Chinese. That is a great sign for the entire sector.”

Bloomberg