Helena Beard asks the big question. When will the Chinese travel market come back?
For those of us who work in the travel industry in China, Covid has been a very, very long ride. The virus first surfaced in Wuhan at the end of 2019, and by January 25, 2020, the entire Hubai Province was under lockdown. Two days later, the Ministry of Culture and Tourism asked travel agents to stop selling group tours and overseas packages, curbing the holiday industry. International travel to and from China came to a halt as Covid was declared a global pandemic in mid-March.
What happened to the Chinese travel industry?
As outbound tour operators closed, domestic tourism flourished, as China’s travel-hungry middle classes set out to explore their own country, discovering that the diversity of China itself can satisfy the need of all kinds of vacation experiences, from hiking to winter sports. , surfing and camping. During Golden Week 2020, it was reported that more than 600 million Chinese have traveled within the countryflocking to popular tourist sites such as the Great Wall, Xi’an and the Forbidden City.
However, subsequent city lockdowns, which shut down major conurbations such as Shanghai and Beijing, had a huge impact on travel numbers. Chinese New Year 2022 travel was down 26% from pre-pandemic levels, with spending down 44%. In August 2022, the darling of the domestic tourism wave, the beach and duty-free mecca of Sanya on Hainan Island, was locked down following an outbreak of Omicron, leaving 80,000 tourists stranded. The most contagious Omicron variants make the idea of Zero Covid a kind of pipe dream.
Positive signs for traveling
Recently, there have been some signs that the international travel market should open up in the coming months. Although testing remains a requirement for re-entry to China, the processes have been simplified. International flights between China and the UK have now restarted, with weekly services on Hainan Airlines to Manchester and on China Southern and Air China to Heathrow.
National tourism boards are reviving their China social media campaigns and spending big to remind the world’s most valuable market that their destinations are open and welcoming to Chinese tourists. Some, like Germany, have never halted their campaigns despite border closures, such is the power and potential of the Chinese travel market. The future is certain. The moment is not the case.
Why are Chinese borders still closed?
Since 2020, and in support of President Xi’s commitment to the Zero Covid policy, there has been a series of different and complicated travel restrictions imposed by China. When most of Europe opened up to vaccinated travelers in 2021, anyone entering China was still subject to a 14-day quarantine in an isolation facility (at their own expense), followed by a quarantine of seven days and home tests. This requirement was relaxed in June 2022, shortening the quarantine time to a 7+3 model, but still requiring six tests before release.
Flights have also been severely reduced under China’s policy of limiting international carriers to a single route, once a week with the threat of service suspension if passengers test positive for Covid on arrival. As a result, capacity was very limited and flights extremely expensive. The only type of travel considered acceptable (and only more recently) has been for study or business purposes, and international students have taken advantage of dedicated charter flights via Hong Kong return to their universities in Europe.
Zero Covid Policy
China’s Zero Covid policy was relatively successful at first. While other nations were locked at home throughout 2020, in China life has returned to relative normality with factories and workplaces remaining open and as a result the manufacturing industry is thriving and taking shares of other countries like India, struggling to reduce infection rates. and maintain production. China’s GDP continued to grow, up 8.11% in 2021.
Very few deaths have been reported due to Covid. Official figures report that less than 6,000 people have died from Covid since the start of the pandemic and less than one million cases have been reported. Believe these numbers, conversations with Guanxi’s Chinese colleagues confirm the low infection rates. While in the UK we all know people who have had Covid, often more than once, no one in our Chinese team has had Covid and although they may have been locked down in their apartment due to close contact with a suspected Covid case, they have no friends or family members who have suffered from the disease. No scientific research, but indicative.
To some extent, the history of vaccination in China has been the opposite of that in Europe. While Western governments prioritized vaccinating the elderly and vulnerable, before gradually moving to younger age groups, in China it has been much more difficult to persuade older Chinese to get vaccinated. Several factors combined. The safety of the vaccine for the elderly is suspected. Since many older people have chosen not to be vaccinated, the critical mass needed for people to “follow the crowd” has never really been reached in this age group.
And then there is motivation. Given the suppression of transmission, fear of catching the virus and dying or becoming seriously ill as a result is not widespread. Also, this is not the age group that wants to travel and explore their freedoms, so there is little benefit to getting vaccinated. With vaccine scare and a lack of motivation at play, leaving China’s elderly population vulnerable.
Despite the impressive 90% global rate of 1.4 billion fully immunized people, this vulnerability of the elderly remains one of the main reasons why it is difficult for China to safely emerge from lockdowns. The risk of a wave of deaths, in a country with so many people, a large rural population and a less than robust health service, is great.
What future for Chinese outbound travel?
The main pressures on President Xi to open up China are the economy and the public mood. The Chinese economy is in trouble. And that translates not just into falling GDP and falling property prices, but very significantly into China’s youth unemployment figures.
President Xi offered young Chinese a tacit deal when he came to power. In exchange for following their leader, young Chinese could expect freedom, prosperity, educational opportunities and, above all, good career prospects. A China with an unemployment rate of 20% among 16-24 year olds olds seems unthinkable. But this is where China finds itself 2 and a half years after the first Covid infection in Wuhan.
Add to this frustration the severe lockdowns and restrictions on movement and travel, and some people in China are starting to feel very unhappy. And more importantly, they are starting to express their displeasure more publicly.
President Xi must find a way out of the lockdowns, without losing face and without risking a crushing wave of Covid deaths, especially among the elderly. How he will approach this will most likely become clear over the next month. The 20th National Congress of the Communist Party of China will open on 16e October. There is no doubt that President Xi will win a third term, even if there will be a reshuffle under him.
Traditionally, plans for the next stage of the country’s future will be presented to Congress. So we don’t have too long to wait.
Helena Beard is the Executive Director of guanxia UK-based PR and marketing agency specializing in China.