Domestic travel has rebounded strongly in China after the easing of three years of zero-Covid restrictions, but outbound Chinese tourism is recovering much more slowly due to visa backlogs, a lack of international flights and security concerns.

Travel and its associated spending by Chinese tourists at home and abroad are watched closely as an indicator for the global tourism industry, a sector in which announced foreign investment projects bounced back by 23% last year. More than 150 million mainland Chinese travelled abroad in the pre-Covid year of 2019, according to the World Travel and Tourism Council, accounting for 15% of global tourism spending.

“Chinese domestic travel has recovered explosively due to pent-up travel demand suppressed during the pandemic,” says Xinjun Wang, CEO of Ivy Alliance Tourism Consulting, a Beijing-based research and consultancy firm.

More than 2.8 billion domestic trips were made in China in the first half of 2023, according to figures compiled by Statista, about 80% of the level recorded in the second half of 2019. This was also more than double the 1.07 billion domestic trips taken in China during the last six months of 2022.

In January 2023, mainland China reopened to land and sea crossings and halted mandatory quarantines for incoming travellers, ending three years of draconian zero-Covid policies that had put a stop to most travel into and out of the country.

During the Chinese national holiday of Golden Week in early October, millions more people are expected to travel domestically, including in the special territories of Hong Kong and Macau.  

Tourism has historically been a key driver of domestic demand in China. Amid an economic downturn in China epitomised by its depressed property sector, which accounts for about a quarter of the Chinese economy, tourism has become one of the few bright spots since the beginning of 2023.

Despite the notable recovery of domestic travel within China, FDI remains sluggish in the country’s tourism cluster. FDI projects were down 76% in the first seven months of 2023 compared with the same period of 2019, according to fDi Markets, steeper than the global decline of 66%.

Many travel assets are now more accessible than before Covid and the Chinese government has become more eager to attract foreign tourism investors, according Lin Xu, the CEO of High Seas Investment, an advisory firm focused on tourism, hospitality, leisure and wellness industries.

“A temporary slowdown during and after Covid in cross-border travel has created a growth momentum for domestic premium travel. Foreign investors and companies with upgrading product offerings should capitalise now on the growing Chinese domestic travel market opportunity," she says.

Outbound tourism yet to recover

On the other hand, Chinese outbound tourism has been much slower to recover, with a World Tourism Alliance H2 2023 sentiment report claiming that “international political instability poses the biggest threat to outbound travel”. Outbound tourists from mainland China reached 40.3 million in the first half of 2023, according to official statistics, down from 154.6 million in the whole of 2019.

China’s ministry of culture and tourism announced in August 2023 that travel agencies could resume offering trips to 138 countries for Chinese group tours, a key driver of outbound travel. However, Chinese consumers have become cautious to leave the mainland since Covid-19 due to personal safety worries and Sinophobia issues, while also facing visa backlogs and a lack of connectivity.

While domestic flight capacity has recovered strongly to meet demand for Chinese travellers, international flights into and out of China remain below their pre-pandemic levels, according to OAG figures. There were 20,940 international flights into and out of China in August 2023, less than half the level on offer in the same month of 2019.

Safety is the main concern holding back mainland Chinese from going abroad, according to a Dragon Tail International survey conducted in April 2023. More than half (58%) of 1012 Chinese traveller respondents said they were either unsure or definitely would not travel abroad in 2023.

Gary Bowerman, director of research and consulting firm Check-in Asia, notes that there will be a clearer picture of travel within and out of China by March 2024 after Golden Week, the Christmas holidays and Chinese New Year.

“Those are critical periods for travel in the Asia-Pacific region. I think the main beneficiaries will be obvious countries like Japan, South Korea, Thailand, Singapore and Australia,” he says.