Outbound Travel Market Remains Positive for China

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Category: Business in Asia, Economy & Trade
Outbound Travel Remains Positive for China

COVID-19 might have restricted our travel plans for almost two years by now. However, things might be looking up for China’s outbound travel market. A lot of industries such as education, food and beverage, and manufacturing have started to pick up the pace again. Moreover, capitals from within and outside of China have been actively invested to help promote the improvement of the economy.

Check out our previous article on Foreign Capital Injection and Conversion in China

Because of China’s population, its outbound travel market (travelers coming from China going to foreign countries for travel, leisure, or business) is of notable interest to domestic and international travel agencies and other travel-related businesses.

Statistics on China’s outbound travel market

In a 2020 study by ITB China, the Chinese have shown a positive outlook toward outbound tourism or planned travel behavior post-COVID-19.  The results of the study indicated that 43 percent of respondents expect the recovery of the outbound travel plans within the next nine to twelve months. 33 percent believe it will take six to nine months, while 20 percent are highly optimistic about only three to six months percent of recovery. Some four percent believe recovery to be within the first three months of the post-COVID recovery era.

As the first country to be hit by COVID-19, China is also expected to be the first to recover. The Golden Week and Spring Festival holidays in China proved that taking serious precautions during travel and winter months could mitigate the risk of spreading the virus. In preparation for outbound travel industry recovery, outbound travel agencies are restructuring their operations. Moreover, their employees are engaging in training programs, as well as sustaining close communication with partners and potential customers.

Latest outbound travel insights and trends

Despite the lull that came with the almost complete freezing of the outbound travel market, the survey revealed that despite the suspension of their businesses during the outbreak, travel-related companies such as travel agencies have proactively and continuously kept in touch with their customers. They strongly believe that travel restrictions are only temporary to help different countries and territories in controlling the spread of the virus. In the long-run (hopefully starting in the near future) the travel industry will “take-off” once more.

China Outbound Travel Research Institute (COTRI) Analytics delivers data and analysis to companies, organizations, and media outlets around the world. It aims to empower deeper market understanding, realize trends, and guide foreign (and domestic) investment, among others. Among its latest publishing, the most famous destinations are Hong Kong and Macau.

China outbound travel Hong Kong Macau

Source: China Outbound Tourism Research Institute

However, as the outbound travel trends have been cut since early 2020, any travel patterns from prior years may change once the borders become open for business and leisure travels. More essential travel plans have always been made available since before the virus, but traveling for wellness, physical and mental health, and more meaningful life experiences is now becoming more in demand.

Health-related outbound travel

Health-related travels on the other hand may become more prominent in the future, especially among the Chinese. According to the International Medical Travel Journal, the Chinese will be the first to indulge in health-related trips once international travel opens again as usual. Medical, spa, and detox treatments are becoming growing markets for retiring, aged Chinese. Thus, this is bound to continue for the years to come.

Because of the restrictions set for almost two years now, travel in the future may be more oriented towards seeking quality destinations and experiences.   And although cross-border travels remain restricted, Chinese international travel is foreseen to remain dominant post-COVID era. It is not unknown that the Chinese can dominate international travels and exhibit a stronger spending power.  In 2019,  nearly 155 million Chinese traveled overseas compared to 145 million tourists who traveled to China in the same year.

Border restrictions

The continued efforts to control the virus have restricted the movements of people during the Chinese New Year or Spring Festival. Hence, this year’s celebration has not been as usual where most migrant workers spend their holidays in their home provinces. Local governments have discouraged inter-city or provincial travels and international travels are highly regulated, if not temporarily unavailable. Further, since safety presented itself as the top priority or concern for Chinese tourists, short-distance travel became the top travel arrangement, post-COVID-19.

Suburbs and neighboring towns outside metropolitan areas have seen their fair share of 2021 Spring Festival travelers. Younger populations are also becoming important contributors to the travel industry. Knowing this, businesses in the travel sectors may incorporate travel destinations and/or packages suitable for the younger generation (born after the year 20000).

The great outdoors

Among the few places that are still open to travelers from all over the world is The Maldives. As long as you have a valid passport and a negative COVID-19 PCR test result taken in the last 72 hours, you can bask yourself in warm weathers and clean, blue waters. Quarantine restrictions have made a lot of us prisoners in our own homes. So, imagine having saved enough money due to the prolonged home-stay and being able to go to one of the top tourist destinations in the world.

Conclusion

Despite the restrictions, the possibilities are looking positive for the outbound travel market, especially in China. Being the first country to be able to recover and mitigate the spread of the virus, residents in China may be looking forward to traveling. The recently held holidays in China proved to be a success story that manifests how taking serious individual precautions during travel could diminish the risk of spreading the virus.

However, in preparation for the turn of recovery or post-COVID era, business restructuring, employee training programs, and continuous communication with past and potential clients should remain a priority for companies in the travel sector. Since different countries have already put restrictions in place for some time, businesses can expect a gradual surge of travel once borders open again. Especially, health spas and other luxury destinations will be the top choices for Chinese outbound travel. But for now, it is best to make certain that all places currently open for travel are made safe to travelers and tourists alike.

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S.J. Grand provides advisory on setting up a business in China. We put our competent team at your service to give you the most effective market entry and tax optimization strategy.  Contact us to get you started.

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