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The state—and the future—of Chinese outbound tourism

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postedDecember 22, 2020

During vTREX, NTA’s online conference in November, Temple University’s Robert Li, Ph.D, shared a comprehensive update on China outbound travel in an education session titled “China Outbound Travel Market: Where Does the Market Currently Stand,” sponsored by Delta Air Lines.

Joseph Oh with Delta Air Lines opened the session with information on more than 100 safety measures Delta has implemented, including blocking middle seats from purchase, which has been extended through March 30, 2021. He reported some other good news, too: Delta resumed nonstop flights to Shanghai from Seattle and Detroit this month.

Using the abbreviation B.C. (before COVID) coined by New York Times columnist Thomas L. Friedman, Li discussed the steadily rising market between the U.S. and China back in “the good old days.” In 2019, 3 million Chinese tourists visited the U.S. and added over $31 billion to the tourism economy.

“That makes China the No. 1 source market of the U.S. in terms of expenditures and No. 5 in terms of business numbers,” Li said. “The Chinese market has always had a very positive view toward the U.S., and Chinese travelers considered the U.S. by far their No. 1 dream market.”

But even B.C., there was some decline in the market, which Li said spurred from recent tensions between China and the U.S. The market peaked in 2017, then began to waver.

“And then, here comes the COVID pandemic,” he said. Li displayed a graph from the China Tourism Academy showing an immediate COVID-19 impact, with almost no international flights in February, leading to the hardly fathomable disappearance of Chinese outbound travel.

Li presented three topics concerning China to U.S.-bound travel:

1. Current challenges

Chinese citizens now must go through some psychological preparation before traveling internationally, and Li said that encompasses intention, interest, and confidence (a feeling of safety).

“Chinese tourists feel very safe about travel within China. They still feel very unsafe and uncertain about traveling abroad,” he said.

COVID cases have hit record highs recently in the U.S., and with the sour relationship between the two countries, Chinese nationals are even more reluctant to visit. He said two-thirds of the American public has a negative view of China (with only 26% having a positive view), and the Chinese public also harbors a negative attitude toward the U.S. that’s worsened since the summer.

The most publicized challenge is travel bans. Some countries have gradually let up on restrictions, but the U.S. is not among them. Both inbound and outbound group tours have been suspended. And when Chinese travelers book a flight, they come up against the five-one policy, which puts a cap on flights in and out of China. They face difficulty with finding a flight, cancellations, and high ticket prices. The testing and quarantining process is quite complicated, too.

“So you can imagine that for Chinese tourists traveling abroad right now, it’s a very challenging process,” Li said.

2. Four parts of recovery

Tourists feel at ease traveling within China, so their expectations for traveling abroad are similar to what they see at home. Things like temperature checks, QR code tracking (this tracks health codes on cell phones and sends an alert when you’ve encountered someone with COVID in the past 14 days), mask-wearing, social distancing, hygiene protocols, and crowd control are examples of what they seek in international travel.

“This sounds pretty cumbersome, but it would help Chinese tourists feel safe about their entire travel experience,” Li said.

He noted four key observations in the recovery of the outbound market in relation to domestic travel:

  • A supply-driven recovery  Many past crises have hurt travel demand, but this one is quite different. The industry has not been able to meet consumers’ needs. Li said the Chinese domestic tourism industry has largely addressed the supply issue and travelers feel comfortable.
  • An optimistic recovery  As much as 80% of the people who traveled domestically during Chinese holidays last year hit the road again this year.
  • A government-led recovery  The Chinese government has put many different policies in place throughout the year to aid in guiding the industry to reopen the outbound market.
  • The “new normal”  “The issue of safety and cleanness and hygiene is of critical importance. Tourists are paying attention to this when considering travel product selection,” Li said.

3. Market overlook

“The rebound will be gradual. It will not happen overnight, but we are very much optimistic,” Li said, mentioning the market’s resiliency.

“We would estimate that the role of Chinese outbound tourism in the global tourism landscape will actually be even further elevated,” he said. “There is still a significant amount of tourists interested in traveling abroad.”

Li said tour operator feedback shows Chinese travelers have become more “Westernized,” as their chosen activities have leaned toward smaller group size and independent traveling, customized tours, self-guided road trips, island travel, and outdoor activities.

There is also a large increase in upscale travel product. He said the operator feedback also emphasizes the importance of shifting travel product to customer preferences while engaging them through marketing efforts.

Outbound travel recovery will, of course, be dependent upon the containment of the pandemic, and Li’s key conclusion is that recovery will take time.

“The recovery process of Chinese outbound tourism needs to use the Chinese domestic market recovery as a reference point. We will probably never be back to normal again because the ‘new normal’ involves something that we haven’t seen before, and the market has changed substantially and fundamentally,” he said.

As for U.S.-bound travel, there remains much uncertainty, but the political factors will be closely monitored in the next couple of months, Li said.

Keep watching NTA’s weekly e-newsletter, Tuesday, for recaps of additional vTREX seminars.

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