Friday, May 24, 2024

Lunar New Year marks the revival of Chinese outbound travel

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Following stricter and longer Covid-related travel restrictions, Chinese citizens have taken longer to return to their pre-pandemic travel habits. Destinations once busting with groups of Chinese tourists have suffered in their absence, but the Lunar New Year in 2024 has marked the stong beginning of outbound tourism return.

According to Oxford Economics, China was the largest source market for international spending before the pandemic, having accounted for almost 11% of global outbound spending in 2019, and the third largest in terms of visits, contributing the equivalent of $156 billion (€145.5 billion) in spending and 104 million overnight visits to global international travel.

The Year of the Dragon started on 10 February, kicking off the 15-day Chinese holiday called Spring Festival. However, with preparations starting ahead of the New Year, the travel period around the festival, called “chun yun”, already started on 26 January in China and lasts for 40 days. Last year, the Spring Festival came too soon after the scrapping of the zero-Covid policy and amid a new wave of infections for people to return to their travel habits, but this year, with travel back in full force, not only are the Chinese expected to make 9 billion domestic trips during the travel period, but they are also estimated to make twice as many trips abroad compared to last year.

© Tourism Economics

According to a recent Oxford Economics report, although doubling last year’s figures, Chinese outbound travel volumes will remain 22% below 2019 levels, with a full recovery only expected next year, when outbound tourism from China should exceed pre-pandemic volumes by 6%. Moreover, Chinese outbound travel will catch-up with demand from other source markets and outpace visits from the rest of the world from 2026 onwards to once again be a major driver of global travel.

Although a full recovery will be made in 2025, significant variations will remain, with the 6% increase over 2019 levels being driven by travel to the Middle East, with Chinese visits to the region to exceed pre-pandemic volumes already this year. Asia-Pacific and Africa will be getting the full return of Chinese travellers next year, while Europe and the Americas will only see a full recovery in 2026.

© Tourism Economics

On the other hand, Chinese outbound spending (in nominal terms) will recover earlier than visits, returning to pre-pandemic levels in 2024 driven by increases in average traveller spending and broader inflationary pressures. This still represents a lag compared with most other large source markets, whose spending recovered in 2023.

Despite a relatively slow recovery in the near-term compared to other large source markets, China is expected to regain its pre-pandemic share of global outbound visits (7.1% in 2019) in 2026 and the country’s share will increase steadily for the rest of the decade and into the next to reach just under 8% by 2033. According to Oxford Economics, among the world’s five largest outbound visitor markets, China is the only one projected to gain share between 2026 and 2033.

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