As the world is gradually reopening its doors to travelers, one important group is missing. Gone are the days when Mandarin could be heard from any corner of the hotel, as Chinese groups would bump up the occupancy statistics pretty much in all the destinations around the globe. Confined to their homes or covid facilities and quarantine centers, many Chinese citizens are grappling with the government’s zero covid policy, and travel is hardly on their minds. However, somewhat surprisingly, this could still be good news for a specific sector – domestic travel. How exactly has the behavior of Chinese travelers changed, and what can we expect from this demographic group in the nearest future? While in 2019, 150 million Chinese tourists traveled abroad infusing $255 billion into foreign economies, this year the state of things is very different.
Leisure Travel to Wait
Steve Saxon, a partner at McKinsey & Company, notes that even if travel returns, outbound leisure tourism would be down on the Chinese government’s priority list. This is diametrically opposed to the rest of the world, where the gradual lifting of travel restrictions results in the leisure traveler being the first to set sail.
Currently, the government is not issuing passports. Moreover, many Chinese tourists travel internationally as a part of tour groups, which need government approval, said Saxon. “Once borders open, international business travel will be the first to take off, followed by visiting friends and relatives. Leisure travel will be the last to make a comeback.”
Domestic Travel Up
Nevertheless, this need not be the death of the Chinese travel industry. New domestic tourism products have reportedly been released into the market in the hopes to substitute for overseas travel as travelers increasingly prefer to stick around their hometowns as a first choice.
This puts weight on what previous McKinsey reports prophesized — that the resurgence of domestic travel would be the main driver behind China’s travel industry recovery. “Before the current outbreak, when domestic travel was open and encouraged, many of the 150 million Chinese outbound tourists were instead traveling domestically,” Saxon says.
Even the recent outbreaks do not seem to deter travelers too much. For example, a few months ago, home to the renowned tourist attraction The Terracotta Warriors, the city of Xi’an had an alarming Covid outbreak. The city went into lockdown, set out largescale testing, hit zero cases again, and swiftly opened up. “So, if the current set of lockdowns is successful, I would expect domestic tourism to recover within three months,” Saxon said.
The New Chinese Tourist
“There will be caution for a long time about going to crowded places. The winners would be destinations with more outdoors and more experiences, as Chinese tourists opt for experienced-based tourism,” said Saxon.
The McKinsey report supports this conclusion, showing that tourists are increasingly choosing deeper local cultural experiences and experimenting with activities like snow tourism and wellness.
Overall, it seems that the Chinese tourist matures and develops vertiginously quickly. Many of us would remember the classic Chinese tourist in a foreign destination, following a flag-wielding tour director to all the major sights. Today this cliché would not pass the test of time. As Saxon puts it, “Don’t ever underestimate how quickly the market in China changes.”