Saturday, May 25, 2024

An Influx of Chinese Tourists Is Coming to a Country Near You – BNN Bloomberg

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(Bloomberg) — Chinese tourists are headed overseas for the extended May Labor Day holiday at near pre-pandemic levels, accelerating a rebound of what used to be the world’s biggest travel market. 

Outbound trips between April 27 to May 5, which includes the five-day break that started Wednesday, are just 7% below 2019 levels, according to ForwardKeys, a travel forecaster that analyzes air ticketing, travel agency and other industry data. A last-minute rush has seen bookings surge at a faster pace than was expected based on ticket sales at the beginning of April, according to the travel insights company. Meanwhile, domestic ticketing has surpassed 2019 levels by 4% for the period.

The data, along with the results of Bloomberg Intelligence’s China traveler sentiment survey, shows demand rebounding, despite concerns the country’s sluggish economy is weighing on consumer confidence and spending. A swift return of Chinese travelers, who spent almost $248 billion on trips abroad in 2019 before the pandemic essentially shut down tourism, is key to filling a big hole in the global travel industry.  

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“We’re now well ahead of the pace — that’s the bottom line,” said Tim Bacchus, Bloomberg Intelligence’s senior industry analyst. “We’re seeing an acceleration and an increase of expectations on China’s outbound travel. It’s recovering faster than what the industry expected at the beginning of the year.” 

In 2019, Chinese travelers made 170 million trips abroad and their spending made up 14% of global tourism revenue, according to World Travel and Tourism Council data. Analysts had expected China’s outbound tourism to be steady this year, with some forecasting a return to pre-Covid levels by 2025. 

Now, there are multiple signs China’s pickup is gaining momentum. Bloomberg Intelligence expects international air travel from the mainland to top 90% of 2019 levels by year-end after a strong first quarter — up 5 percentage points from January.

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

“The resurgence of international travel, coupled with robust demand for domestic travel, paints a promising picture for the industry in China,” said Nan Dai, ForwardKey’s China market analyst. “Robust demand from the Chinese market also drives the global tourism recovery and sustains jobs and businesses reliant on tourism.”

The main headwind that might prevent a full recovery of overall international flights for the China market to 2019 levels this year is the lack of foreign passengers heading into China, said BI’s Bacchus. Strained relations with the US has have spilled over into travel, while European vacationers also haven’t returned in big numbers either despite China’s relaxation of visa rules for some countries.

Destinations in Asia, including Malaysia, Singapore, and Indonesia are set to be among the biggest beneficiaries of the jump in Chinese travelers. Traditionally, Hong Kong and Macau are also among favored and easy-to-get to spots, and ForwardKeys counts those trips as outbound travel.

Chinese vacationers are also favoring Japan, where a weaker yen helped to attract more than 452,000 mainland visitors in March. Chinese visitors ranked third among international arrivals in March — though their numbers were still about 35% below pre-Covid levels.

Outside of Asia, Europe is favored during the extended Labor Day holiday, according to ForwardKeys. Bookings for Italy rose 19% from 2019 levels, while the UK is seeing a 12% gain. And Beijing’s push of travel spots in the Middle East that’s part of the country’s Belt and Road Initiative is working: the United Arab Emirates was the top destination outside of Asia for trips during the May holiday.

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

“We’ve been thinking that Chinese consumers are pretty strapped, hurt by the stock market and the property slump,” said Bacchus. “What we’re actually seeing is travel is still being prioritized by Chinese. That’s a great sign for the whole industry.” 

©2024 Bloomberg L.P.

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