ChinaMarket Insights

China’s Travelling Industry Recovering Faster Than Expected

By 14 May, 2020June 30th, 2023No Comments

Railway platform in Guangzhou

As the COVID-19 outbreak ends in China, with no detected signs of a second wave, domestic travel has begun to rise once again.

As the recent Chinese holiday May Labor Day, usually meaning massive domestic and international travelling, just were upon us, China saw a boosting recovery in domestic travels within the country. Even though the number of travellers for this year’s holiday was down 53 percent from the same period last year, it still showed strong signs of recovery. During the Chinese holiday Tomb Sweeping Day, in April, travelling was down by 61 percent, indicating that the industry is now recovering rapidly. By comparing last year’s May Labor Day and Tomb Sweeping Day to this year, it is clear that both the number of trips as well as spending per trip have started its recovery.

Charts showing recovery of trips and spending in China after COVID-19

As of now, Chinese travelling is entirely domestic as international borders remain closed. China has imposed a 14-day quarantine (either in homes or government facilities) for all citizens coming from overseas, with no indications of when it will be dropped. International flights are capped at a bare maximum of once per week per airline and country. Nevertheless, hotel occupancy and domestic-flights are rising gradually, but are still far from the pre-crisis levels.

Travelers in China are still cautious, staying close to their homes and only travelling limited distances—choosing, for example, to drive their cars or go by train to regional destinations. Even though the flights for domestic trips have started to recover, it is still at a slower pace than other alternatives. Data also shows that the early travel returners in China are the young generation and those without families. On Tomb Sweeping Day, the first holiday following the pandemic start, 60 percent of the people who travelled were below the age of 30, a significant increase of 43 percent compared to the same holiday last year.

Even though the recovery process will differ country by country, there will be common patterns, having domestic travelling recovering first while international travels, especially flying, requires a longer time. We can also expect a similar theme of the travel’s demographics, with the younger generations going first by traveling to nearby destinations. Economy travel will recover more quickly and to capture the early demand, travel-industry players must redeploy their resources quickly to the markets that recover first.

Some processes and products have to be modified to fit this new demand and safeguard the health of their customers, which will help to increase their confident in traveling again. Further the marketing, and communication will most likely be re-tailored to fit the new and changing customer mix as millennials and members of Gen Z replaces the older generations.

Eventually, worldwide travel will return. By acting flexible and responsive, companies can better adapt to the changing needs of travellers and thereby re-gain their customers.

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