Issue #116 - Chinese Tourism, Group Tours & the "4-Hour Radius"
How has China’s full reopening been received in 3 key destinations?
Welcome to issue 116 of Asia Travel Re:Set.
On 8 January, China began to reopen after 3 years of travel isolation.
Since then, Chinese FITs have been able to travel to wherever they can find an affordable flight and a visa.
At the outset, China’s government said restoring the group tour segment would be staggered to help airlines, OTAs/travel agents and tour operators restructure after 3 years of domestic-only focus, and to enable demand among travellers to recalibrate.
From 6 February, 20 nations could receive Chinese tour groups. 40 countries were added on 15 March. On 10 August, 78 more were added, bringing the total to 138.
This effectively completes China’s reopening - with a few exceptions, such as Canada.
The timing is apposite - building a global buzz ahead of the October Golden Week, and enabling destinations to prepare special promotions for Chinese tourists for Christmas/New Year and Chinese New Year.
For Japan, South Korea and Australia, being granted approved destination status on 10 August will shape the next-phase recovery of their visitor economies.
So let’s follow that train of thought…
Thanks for checking-in.
- “IN THE NEWS”
- Chinese Tourism, Group Tours & the "4-Hour Radius"
How has China’s full reopening been received in 3 key destinations?
- Pop Music Tourism in the Spotlight as Taylor Swift & Blackpink Fever Grips South East Asia
Pop Music Tourism is South East Asia’s breakout story of 2023.
“IN THE NEWS”
During almost 3 years of Covid-Zero limitations on travel, lower-tier cities became pivotal for Chinese OTAs planning for a future rebound. That strategy is reaping rewards in 2023. Find out how in this summary version of my new report for Phocuswright, How Chinese OTAs Turned Around Three Years of COVID Isolation.
Chinese Tourism, Group Tours & the "4-Hour Radius"
Before the pandemic, Japan, South Korea and Australia were hot-ticket destinations for Chinese tour group travellers. As the Covid-19 crisis developed, China suspended outbound group travel on 27 January 2020.
Three years and 7 months later, being granted approved destination status by China will shape the next-phase of recovery for the visitor economies of those 3 nations.
Japan and South Korea are within the “4-Hour Radius” cited by Chinese OTAs. This describes the preferred flight time for Chinese tourists, who mostly take short vacations. In H1 of 2023, 94% of outbound trips were to Asian locations. Australia is an aspirational long-haul destination with strong VFR and education travel segments.
Here’s how the return of Chinese tour groups is being reported in each country.
1) The Only Way is Up in Australia
In Australia, the government’s recent decision to deny extra landing rights to Qatar Airways has sparked a new discussion about open skies and bilateral air agreements. Meanwhile, ABC reports concerns that the nation’s tourism industry is not ready (in service or infrastructure terms) for the return of Chinese group tours.
Inevitably more upbeat is Don Farrell, Minister for Trade & Tourism, who describes “Australia’s return to China’s Approved Destination Status (ADS) scheme… as another positive step towards the stabilisation of our relationship with China.”
He adds, “In 2019, more than 1.4 million holidaymakers from China spent $2.1 billion in Australia, including $581 million spent by ADS group travel participants.”
In June 2023, Australia received 1.36 million inbound arrivals, the highest monthly figure since reopening in February 2022. China was the 4th-largest visitor market in June, behind New Zealand, US & Singapore.
Unsurprisingly, China is not among Australia’s top 5 inbound markets for the 12 months ending June 2023. There were 241,730 Chinese arrivals in the year to June 2023, compared to 1.43 million in the same 2018-19 period and 689,620 in 2012-13. The above graph (by Australia’s Bureau of Statistics) shows Chinese visitation for the 12 months ending June 2023 achieved a 16.9% recovery from the same 2018-19 period.
The only way is up.
2) Unleashing a Tourism ‘Tailwind’ in Japan
“The end of the ban [on Chinese tour groups] is likely to serve as a tailwind for the Japanese economy,” chimed The Japan News once group travel was reinstated.
The first Chinese tour group in 3 years arrived on 14 August. Despite optimism about strong growth in Chinese visitation for the rest of 2023, air capacity remains sub-par. “ANA’s flights to China are still only 35% of 2019 and JAL is 55%”, Yicai Global notes.
A shortage of manpower is also raising concerns. “Some hotels are limiting their occupancy rates because they cannot secure enough staff,” notes The Japan Times.
Japan received 2.32 million inbound visitors in July, the highest monthly total since reopening last Fall. This is an impressive 78% recovery versus July 2019. China was the 3rd-biggest visitor market in July, with 313,300 arrivals, down 70.2% from July 2019.
Japan's economy grew faster than expected in Q2, notes Asahi Shimbun, as “brisk auto exports and tourist arrivals helped offset the drag from a slowing post-Covid consumer recovery.” It adds that the recovery should “gain steam” with the lifting of China’s group travel ban by “unleashing what has historically been the biggest source of tourists and inbound spending.”
3) A ‘New Dynamic’ in South Korea
The return of Chinese group tours energised South Korean travel stocks. Lotte Tour Development surged 30%, casino operator Paradise Group rallied 18% and cosmetics house AmorePacific rose 7% on the announcement, reported the Financial Times.
In 2016, 8.06 million Chinese tourists comprised almost half the of 17 million inbound visitors. “However, China's figure in relation to Korea's inbound travel dramatically dropped to 4.17 million in 2017 (39.5%), 4.79 million in 2018 (38.7%) and 6.02 million in 2019 (42%),” reports The Korea Times.
From January-June 2023, South Korea received 546,393 Chinese tourists, around 20% of the 2.8 million arrivals in the first half of 2019, reports Yonhap News.
"The resumption of Chinese group tours is expected to bring a new dynamic to the travel, tourism, aviation and retail industries," says Park Bo-gyoon, Minister of Culture, Sports & Tourism.
His counterpart, Finance Minister Choo Kyung-ho, promises “measures to attract Chinese tourists by offering conveniences in terms of visas and transportation, [and] by developing various tourism programs." Surprisingly, he neglected to mention South Korea’s golden tourism term: “K-culture.”
Meantime, this is an intriguing read by The Moodie Davitt Report about shifts in Chinese travel retail purchasing, which references South Korea (and Hainan Island):
“The transition from a daigou-dominated business to a traditional retail sector is causing short-term pain in South Korea but is ultimately a positive development.”
What are the 88 key drivers of China’s outbound tourism recovery - and is your business prepared to welcome the new wave of Chinese tourists?
Click to download your copy of The Chinese Outbound Tourism Handbook 2023: 88 Practical Ways to Prepare for the New Wave of Chinese Visitors in:
English French German Spanish Italian
Pop Music Tourism in the Spotlight as Taylor Swift & Blackpink Fever Grips South East Asia
Pop Music Tourism is South East Asia’s breakout story of 2023. Everyone is talking Tourism Taylornomics as Singapore prepares for the Eras Tour. Blackpink are filling soccer stadiums, fans eagerly await Beyonce's 2024 tour dates, and Indian singers, Indonesian jazz musicians and K-pop bands are drawing large crowds.
On this week’s The South East Asia Travel Show, we discuss the potential economic windfall for airlines, hotels and tours and experiences players - and the regional competition to derive a boost for destination branding.
Listen to Pop Music Tourism in the Spotlight as Taylor Swift & Blackpink Fever Grips South East Asia, here:
Or search for The South East Asia Travel Show on any podcast platform
And, that’s a wrap for Issue 116.
The Asia Travel Re:Set newsletter will be back on 3 September.
Until then, find me at LinkedIn and The South East Asia Travel Show, where we’ll be talking Culinary Tourism with Leisa Tyler & Darren Teoh of the Kita Food Festival.
Happy travels,
Gary