Asia Travel Re:Set #26 - When Will Chinese Outbound Travellers Return?

"Are global travel firms planning ahead, or taking a 'wait and see' approach?"

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637 million.

Cast your mind back 4 months. During the first week of October 2020 - one of 2 Golden Week holidays in China - some 637 million domestic trips were reported.

The world collectively gasped.

It was an astonishing figure in the midst of a pandemic that had sucked the life out of global aviation, travel and hospitality.

In response, 3 general extrapolations were posited.

1) China had successfully contained COVID-19, and this was beginning to fuel confidence to travel once again.

2) Evident ‘pent-up’ trip demand was demonstrated across this vast nation.

3) Having tested the waters, the proven desire for vacations would, at some point in the near future, seamlessly transfer from local landscapes to the global map.

Thereafter, speculation - which is now the de facto currency of travel and tourism - centred on Chinese New Year 2021. Would China’s government remove its 14-day quarantine stipulation and enable travellers to head overseas during Spring Festival.

While 2) above is inarguable, and 3) would likely follow in any ‘ordinary’ year, 3 clear fault lines emerged when analysing these points in combination.

Firstly, while China had - at that point - wrested control of COVID-19, the pandemic has taught us that yesterday and last month are useless guides for what may occur tomorrow or next month. Recent outbreak experiences in Australia, China, Thailand and Vietnam prove that.

Secondly, 3) took no account of supply. Where would Chinese travellers actually be able to visit? As it turns out, apart from Macau, Maldives and Sri Lanka, very few viable international options would exist for the upcoming Spring Festival.

Thirdly, the vaccine factor. Since October, this has started to dominate the debate, with airlines, governments, public health experts and travel bodies taking positions on whether travellers (and the public in the countries they may visit) should be vaccinated. Plus, vaccine rollouts, even in China, have mostly been slower than hoped.

This may change in the coming months, as more vaccines come on stream and production facilities ramp up capacity. But it provides no solace for the now underway Chinese New Year travel season.

Finally - and this is an often overlooked question - just how important is Chinese New Year for international travel and tourism?

Figures from the China Outbound Tourism Research Institute (COTRI) show a total of 170 million outbound trips from China in 2019. Of these, 74.5 million were to Hong Kong, Macau and Taiwan, with 95.5 million to destinations worldwide.

Set against this backdrop, only 6.3 million outbound trips were made during Chinese New Year in 2019. That’s a fairly low percentage of the annual total.

For reference, the first day of 2021’s low-key Spring Festival travel season in China recorded around 20 million domestic passenger trips.

Golden Weeks have decreased in overall importance in recent years as Chinese outbound travellers - for various reasons - spread their vacations across the calendar.

Moreover, as Prof. Wolfgang Georg Arlt of COTRI explains in this issue, the benefits of Chinese New Year travel are disproportionately weighted in favour of short-trip Asia Pacific getaways rather than long-haul destinations.

So, this week I’ve included a short For vs Against debate on Chinese outbound travel returning in 2021.

I’ve also curated 5 expert opinions from around the world. Trust me, they have each contributed truly enlightening insights.

Thanks for being on board,

Gary


Each Sunday, Gary Bowerman charts the week’s key talking points for visitor economies across Asia Pacific. 

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The Sunday ‘CNY Special’ Itinerary

- DashBoard

  • From 1.15 billion down to 659,407 this week in China

- QuoteBoard

  • Three Spring Festival travel takeaways

- This Week’s 6 TOP Talking Points

  • For vs Against: Will Chinese Outbound Travellers Return in 2021?

  • A Global View - Prof. Wolfgang Georg Arlt

  • A View From China - Joanne Tang

  • A Hospitality Marketing View - Anita Chan

  • A View From Australia - Andrea Plawutsky

  • A View From the UK - Helena Beard

“Chinese travellers are keen to travel internationally, but feel restrained due to necessary public-health measures and safety precautions, such as quarantines and border closures.”


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DashBoard

From 1.15 billion down to 659,407 this week in China…

  • 1.15 billion: Forecast total trips in China during the 40-day Chinese New Year travel period, down 20% on 2020 and a fall of 60% from 2019. [China Daily]

  • 473 million: Total domestic visitors to Jiangsu Province in eastern China in 2020. [China.org]

  • 64.55 million: Total domestic visitors to Hainan Island, China’s tropical holiday getaway, in 2020. [Hainan Daily]

  • 43.77 million: Total passengers through Guangzhou Baiyun International Airport in 2020, which it says made it the world’s busiest airport. [Global Times]

  • 659,407: Total domestic visitors to Macau in December 2020. [Macau Government Tourism Office]


- QuoteBoard

You heard it here…

“There will be an estimated 1.15 billion trips made during this year’s travel rush season, Ministry of Transport spokesperson Wu Chungeng said Thursday. That would be the smallest figure recorded since the government began releasing this data in 2003. That year, 1.8 billion trips were made.”

Caixin

“To cope with the challenging situation of epidemic prevention and control, 31 provinces, municipalities and autonomous regions released rules for trans-provincial travel. People from different risk-level areas have to abide by the following requirements or possess the following materials when traveling to the indicated cities.”

Official statement published by China Daily

“We've called for people, including migrant workers, to stay in the cities where they work during Spring Festival holidays to reduce the chance of spreading the virus. And we, together with other five ministries, also called for companies and other institutes to provide more service to employees during the Spring Festival."

Chen Yongjia, Deputy Head of the Employment Promotion Department of China’s Ministry of Human Resources, quoted by CGTN.


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For vs Against: Will Chinese Outbound Travel Return in 2021?

“Will the inexorable rise of the Chinese traveller continue? Throughout history, China has always been - and remains - a difficult country to predict.”

I wrote those words in my 2014 book, The New Chinese Traveler, but would choose exactly the same sentences right now.

More than that, the world has become less predictable in the past year. Forecasting the travel future is brave while a mutating virus raises uncharted questions about governance and society on all continents.

I digress.

So, will Chinese travellers return to the global map in 2021. Opinions are polarised. There are persuasive arguments in favour of this happening in 2021, or that 2022 could be instead the earliest juncture.

Here are a few bullet-points factors to consider when drawing your own conclusions…

  • GDP Growth. The Chinese economy expanded by 2.3% in 2020, although its structure was imbalanced by emergency policy measures. Stimulating a stronger recovery in 2021 will require a sustained surge in consumption - suggesting that domestic tourism remains a high priority.

  • 2022 Beijing Winter Olympics. This could prove a decisive factor. China has watched closely as the Tokyo 2020 Summer Olympics were pushed back to 2021, and still remain in doubt. It will not want anything (especially imported COVID-19 infections) from preventing its capital from becoming the first city to host both the Summer and Winter Games, which commence on 4 February 2022 (3 days into the Chinese New Year).

  • Ski-cations. Following on from above, skiing has become a white-hot weekend and winter trip option in China. This is now expanding from the icy northern provinces into other areas, such as beautiful Sichuan Province. In future, the proximity and quality of resorts in Hokkaido will keep Japan in the picture. But what impact will new and better resorts in China have on winter trips to European ski centres, especially for the 2021-22 season?

  • Selected Destinations. It seems plausible that when China does green-light overseas travel, it will be in capped quotas for vaccinated citizens - most likely to carefully chosen ‘safe’ destinations. New Zealand would seem top of the list, but its COVID elimination policy suggests otherwise, while Chinese-Australian tensions may preclude that option. In Asia, Singapore would be on a ‘trusted destinations’ list - especially if it were to grant exclusivity of access to Chinese travellers for a trial period. Brunei may be an outlier option, which brings us to…

  • Laos. Not only is this neighbouring country among China’s staunchest allies in ASEAN, it is COVID-safe and enables cross-border self-drive travel. Plus, the China-Laos high-speed railway from Kunming to Vientiane is scheduled to open in December. This would be very unlikely to happen without Chinese passengers on board. So either there could be a time-limited or exclusive access deal struck for Chinese visitors to Laos, or the railway opening will be delayed (perhaps until after the 2022 Beijing Winter Games).

  • Davos in Asia. The 2021 World Economic Forum will take place in Singapore in May. Finding new solutions to reboot travel and aviation will likely be a high-agenda topic, as will be the status and implications of vaccine rollouts. China will play a forefront role at the event. So, will there be a (for now) surprise policy announcement related to travel in Asia at the WEF summit?

  • Casino Tourism. Although the story dates back to August last year, coverage resurfaced this week about China ‘blacklisting’ destinations in South East Asia that target Chinese nationals for gaming tourism. There are various interpretations for this, but perhaps the most plausible is that China wants to nurture Macau’s visitor economy back to health as quickly as possible.

  • Weight of Demand. This is an unknown factor. Clearly, strong desire for travel exists in China (and in many other countries) and as its inoculation programme steps up more people may wish to take that on-hold vacation. What will happen with new and deferred bookings as the October holiday draws closer? Will some charter groups be permitted to take off to selected destinations. Will selected ‘safe’ countries grant exclusive access over the holiday to Chinese travellers?

  • Beyond Asia. Although it is widely discussed that travel may be regionalised in an early-stage return period, there may be exceptions. ‘Safe’ destinations for Chinese travellers may not necessarily be close to home. China and Cuba (although cases have spiked this week), have been talking up travel ties. Seychelles and Mauritius intend to vaccinate their populations quickly. As Prof. Arlt mentions below, how about Israel? Or Madagascar. Or Iceland?

    The speculation continues.


A Global View - Prof. Wolfgang Georg Arlt, COTRI

Are you noticing a sense of optimism that Chinese outbound travel may return in 2021?

Generally, there is more optimism than there was last November, because vaccines are coming through and case numbers are coming down in some countries in Europe, for example. But when it seems that things may be getting better, there are setbacks. New strains are identified, and people get anxious. The result is more focus on closing borders because the virus comes from outside, from Brazil, UK, South Africa. Last year it was from China. For tourism, it will be another 3 or 4 months before it starts again in Europe. But once it becomes possible, I think a lot of people will travel.

If you look at Macau, there are half a million Chinese per month going there now, and there hasn’t been a single COVID-19 case because of that. This is very positive. And, maybe, if there is a slowdown in domestic travel in China for Chinese New Year, then people will allocate more money to spend on travelling further later in the year.

What will be the impact of Chinese New Year without Chinese visitors?

In Europe, Chinese New Year is not that important. It’s winter here, the weather is bad and it’s too far away for a short trip. It creates a small peak, but not a big peak like the October Golden Week.

“There is less seasonality now because the Chinese are travelling throughout the year.”

More important in Europe is what happens from spring onwards. There is less seasonality now because the Chinese are travelling throughout the year. This is why Chinese outbound travel is so important. If you provide Chinese travellers with the right products, stories and experiences, they will come during months that traditional source markets do not. Many destinations and travel firms still do not realise this.

You can use this demand to mitigate the issue of seasonality, which has always been one of the biggest problems for tourism in Europe. A year-round approach can also alleviate over-tourism, which was a big issue in many countries before the pandemic, because you can promote and manage travel flows across the whole calendar.

Are tourism businesses planning ahead for the return of Chinese travellers, or are they taking a ‘wait and see’ approach?

Some people are starting to look forward now. We just signed a COTRI Advantage: Tourism project in Spain, and will sign another with the Albanian tourism industry. In Albania, it will shift away from organised tours and the country wants to attract more independent Chinese travellers. And there is a project we are discussing in Switzerland, which is postponed to 2022, to offer self-drive RVs for Chinese travellers.

We are also starting to talk with Israel again as they are moving ahead very fast with vaccinations and could have a first-mover advantage. They will have a strict border policy to enter, and it isn’t easy to travel anywhere from Israel. So the Chinese government could allow vaccinated Chinese travellers to go to Israel if they return straight after - which is not something you can guarantee for countries in Europe.

“We are discussing a project in Switzerland to provide self-drive RVs for Chinese travellers.”

We are also doing a seminar on 3 February about how island destinations can prepare for a sustainable restart of Chinese outbound tourism. In recent years, more Chinese have been travelling to islands like Jeju, Bali or Maldives, or if they have more money to Tahiti, Fiji and Mauritius.

Even though they have different climates and situations, islands have a lot to learn from each other. They all have issues in terms of limited visitor access and capacity, fragile ecosystems, problems with climate change, fresh water and waste treatment and social changes because of tourism.

Prof. Arlt is Founder and CEO of the China Outbound Tourism Research Institute (COTRI). He is a PATA board member and a member of the UNWTO Expert Panel.


A View From China - Joanne Tang, Infinite Luxury Group

Will this be a quieter Chinese New Year for domestic travel than usual?

The annual travel during the Spring Festival / Chinese New Year holidays will see a lower scale of population flow than the normal level this year. Following the latest COVID-19 resurgence in some northern regions in China, dozens of provinces, municipalities and cities - including Beijing, Shanghai and Shenzhen - have issued notices suggesting that the public should avoid unnecessary travel back to hometowns during the upcoming holiday.

“Travellers are keen to travel internationally, but feel restrained due to necessary public-health measures and safety precautions.”

Do you sense that Chinese travellers are keen to travel internationally again, or is there a sense of nervousness?
We see signs of demand and interest for travel. Customers are interested in travelling again when restrictions lift. China has effectively controlled the spread of the virus and is seeing both the leisure and business travel segments recover domestically.

Travellers are keen to travel internationally, but feel restrained due to necessary public-health measures and safety precautions - such as quarantines, border closures and other restrictions.

Joanne is Founder & CEO of Infinite Luxury Group, which provides communications, sales and marketing representation services for hotels, travel, wellness and luxury brands based in Asia and the Middle East. 


A Hospitality Marketing View - Anita Chan, Compass Edge

How will your international clients cope with two successive Chinese New Years without Chinese travellers - will the impact be felt more in 2021 vs 2020?

Unfortunately, 2021 Chinese New Year seems to be worse. In 2020, other than Chinese living in Wuhan, many were still travelling around Chinese New Year as the world did not yet have a full understanding of what happened.

But this year, since there has been a surge of COVID-19 cases in China, even domestic travel is more restrictive, and absolutely our international clients will not see Chinese travellers from China for Chinese New Year this year.

“We connected with Mainland Chinese that reside overseas and work with influential KOCs (Key Opinion Customers) to drive domestic Chinese demand for our clients.”

To help our clients cope with the situation, we need to work with the domestic market. Thailand, for example, has the largest overseas Chinese community in the world outside of Greater China. Some 11-14% of Thailand's population is considered ethnic Chinese.

Hence, in 2020, we connected with Mainland Chinese that reside overseas and work with influential KOCs (Key Opinion Customers) to drive domestic Chinese demand for our clients. In fact, we have run a few successful vlogs and social media posts on China online platforms for some of our clients.

Are travel companies looking ahead and planning for when Chinese travellers head overseas again, or are they taking a 'wait and see’ approach?

Some travel companies are looking ahead. As I mentioned above, they want to stay engaged with Chinese travellers digitally during this time. Doing so means that, once things are moving in the right direction, they can pick things up fast and reap the rewards.

However, there are also many companies that will “freeze” all activities and take a wait and see approach. This is understandable, as it may not be financially viable to do anything now even if they want to. We just need to work with our clients, to get prepared and take an agile approach to move things quickly when opportunities open up. Otherwise, the space will be so crowded, expensive and ineffective as everyone will try to do the same thing.

Anita is CEO of Compass Edge, which provides online distribution and marketing services and China-ready strategies for independent hotels, and Head of Hospitality at The Asian General Chamber of New Retail.


A View From Australia - Andrea Plawutsky, Amplify Me

What is the impact of two successive Chinese New Years without Chinese tourists in Australia - will the impact be felt more in 2021 vs 2020? 

It will have an enormous impact on the travel industry. In 2019, Chinese travellers were the largest source market into Australia, both in terms of numbers and economic value.

Notwithstanding the impact of Chinese New Year 2020, which saw an approx. 34% drop in visitors, the impact in 2021 will be far greater. The borders remain entirely closed into Australia, with the exception of citizens and permanent residents - and, even then, at very reduced numbers. There will be no Chinese New Year 2021 travel from overseas Chinese tourists - or any other tourists.

In 2020, Chinese New Year fell in January, just prior to the ban on travel from China (implemented 1 February 2020). The January decrease was attributed to domestic Chinese travel restrictions and a reticence to travel as the coronavirus emerged, plus Chinese travellers’ concerns about the catastrophic bushfires in Australia, which badly impacted international travel to Australia. Given that Chinese travellers are very safety conscious, Australia had seen heavy cancellations throughout January.

“Although the impact of Chinese New Year is significant, it’s worth noting the enormous concern of a lack of inbound Chinese students attending university in Australia.”

In 2021, the impact will be felt most in the key destinations patronised by Chinese travellers during the Chinese New Year period, such as Far North Queensland, the Great Ocean Road and state capital cities. In many cases, destinations and routes favoured by Chinese travellers don’t fit domestic tourism patterns, so these regions have seen a devastating drop in numbers. Domestic state border restrictions have exacerbated the situation. Queensland was closed to its significant source markets, New South Wales and Victoria, for much of 2020, so there was no substitute for Chinese travellers.

Although the impact of Chinese New Year is significant, it’s worth noting the enormous concern of a lack of inbound Chinese students attending university in Australia. It’s been estimated that in 2020, more than half of the students due to study here were unable to come and start their studies, which begin in February/March. To date, these students have not been able to return to Australia. Chinese education and tourism inflows are closely aligned in Australia, so the lack of students may have an even greater economic impact than the lack of independent tourists.

Australia's borders are likely to stay closed for some time, so what are you advising clients about preparing for the return of Chinese travellers in future - are clients preparing new marketing strategies, or taking a 'wait and see’ approach?

Based on government announcements, it’s unlikely that Australia’s international borders will reopen to inbound travellers in 2021.

With a few notable exceptions, such as coastal locations like Byron Bay, the last 14 months have been exceptionally difficult for the travel and tourism industry as a whole, between bushfires, drought, floods, coronavirus, international and domestic travel restrictions and border closures.

“Based on government announcements, it’s unlikely that Australia’s international borders will reopen to inbound travellers in 2021.”

With the lack of Chinese international students, the deteriorating bilateral political relationship and the ongoing uncertainty about the reopening of the borders, travel operators can’t afford to focus on the ‘speculation’ of returning Chinese travellers. They have to focus as much as possible on the domestic market – and even at that, primarily the intrastate market as interstate borders keep opening and closing.

Therefore, we’re advising a ‘wait and see’ approach’ to our clients and helping them look at how they can attract hyper-local patronage. We are also working with industry bodies, such as the Australia China Business Council, on proposals for new arrangements to allow for more Chinese students to return to Australia.

Andrea is Director of Sydney-based Amplify Me, and is a specialist in Chinese inbound travel to Australia and a passionate supporter of the travel and tourism industry.


A View From the UK - Helena Beard, China Travel Outbound

Are your clients planning ahead for the return of Chinese travellers, or are they taking a 'wait and see’ approach?

Our clients are split into two camps. The smaller clients have battened down the hatches and paused their international marketing spend for the time being. Many of them are UK museums and attractions which are currently closed due to lockdowns.

Other clients are able to take a more long-term view. They want to be in the best position to attract the Chinese market when international travel restarts, and they know there will be huge global competition for these valuable visitors, especially in the first year.

“Clients know there will be huge global competition for China’s valuable visitors when international travel restarts, especially in the first year.”

Most of the focus is going into social media and digital marketing partnerships with travel platforms to keep brands front of mind and demonstrate continued commitment to China. We are also marketing to international students through various partnerships and social media as this is a hugely important segment for the UK and Europe. We are also now seeing some engagement in trade shows which are slowly restarting in China.

Although infection rates are currently high in the UK, there is great optimism around the vaccination programme which is proceeding at a pace, and hope that international visitors will return swiftly once travel restarts.

Helena is Founder and Managing Director of China Travel Outbound, a UK-based travel PR and representation agency specialising in China whose clients include English Heritage, Royal Museums Greenwich and Gatwick Airport.


And, that’s a wrap for Issue 26.

Until next Sunday, you can find me on Twitter, LinkedIn and at The South East Asia Travel Show.

And don’t forget to send your comments and feedback to gary@check-in.asia 

Have a great week,

Gary