A year after reopening its borders following the pandemic, the predicted rapid recovery of the Chinese outbound market has yet to materialise. And while recovery has been slow, there have been key markets and segments showing promise.
Speaking during a webinar titled ‘China Outbound: Are We Nearly There Yet?’ hosted by travel data specialist OAG, Deirdre Fulton, Managing Partner at Midas Aviation, said Chinese international airline seat capacity for the first quarter of 2024 was expected to be 30% below that recorded in 2019.
“When the shock, but much longed-for announcement came that China was indeed reopening last year, I think those destinations right across the world that had previously welcomed great volumes of Chinese travellers hoped for a surge, but we didn’t see a surge. We saw a very gradual build-up of capacity and we are still waiting for that market to recover,” she said.
OAG Chief Data Analyst John Grant said it was “extremely optimistic to hope that everything will return to normal in three or four months”.
He said during China’s three year closure, supply chains had broken down, airlines reallocated capacity and China became a tough market for inbound airlines to service.
This has been further exacerbated by a slowing of the Chinese economy and increasing unemployment.
Michael Jones, Co-Founder of Create Consulting, a firm working in the Chinese travel market, said among the reasons that people couldn’t “jump immediately when the green light came” was that air capacity just wasn’t there. It was also very difficult for Chinese people to get visas to many destinations. Also many people’s passports had expired during the COVID-19 and they couldn’t renew them.
Fulton added that data showed that only about 10% of Chinese people have passports.
Jones said the return of Chinese tourists would depend on the markets. South East Asia and the Middle East could see recovery quicker than long-haul destinations such as Europe and the US, which would take two to three more years to reach pre-pandemic levels.
China is not among South Africa’s top ten source markets. South African Tourism data shows that the country received about 93 000 Chinese tourists in 2019, while data for the first 11 months of 2023 released by Tourism Minister Patricia de Lille in December, indicates that the country received just over 34 000 visitors from China.
Market is ‘lucrative’
The market is, however, lucrative. Prior to the pandemic, Chinese travellers were the highest spending globally, outspending other tourists by up to three times in certain markets.
Jones said one sector that still remained attractive was the pensioner market as they have the time, they have the money and they can travel.
He said GenZs and, to some extent, millennials had been affected by youth unemployment, but he was seeing trends starting to emerge of older people looking at more budget, nature-based activities. As an example, he said he had seen a tour group of Chinese travellers into their eighties booking cheaper, less luxurious safaris to Africa.
“If you are offering something more adventurous, a bit more nature based that can be for older clientele, I think you’re in a good place right now for the Chinese market.”
To tap into this market, Jones said some destinations were investing in TikTok-style videos for the Chinese social media platform, Douyin, which specifically targeted older travellers.
“Everyone is going to want Chinese tourists, but it’s down to that destination marketing, creating the right product at the right price point and positioning yourself,” said Grant.
Visa regimes, however, will be important, as China has put visa agreements and visa-free travel in place with a number of countries, making it easier for Chinese people to travel, and for tourists to enter China.
“You can’t afford, if you want your tourism sector to recover, to put barriers in the way of travel,” said Grant.
