The travel industry might be bouncing back from the global Covid pandemic, but one question still remains – where have all the Chinese travellers gone to?
Data released by global travel data analysts OAG shows that while in 2023 global carrier seats numbered at 5.5 billion, 3.7 per cent less than the 2019 figure of 5.8 billion, 2024 is expected to see numbers surpass pre Covid levels with Q1 global growth of 10.2% predicted as the industry grows again.
However, despite the lifting of the ban on all but essential international travel from China on 8 January, 2023, the market has failed to keep up with the rest of the world, with OAG data predicting that Chinese international seat capacity in Q1 2024 will still be 30 per cent lower than in the same period of 2019.
And this matters, the year before the pandemic the Chinese were the biggest spenders in international travel having spent $254 billion globally and many destinations have relied on the Chinese market to fill their hotel rooms.
Underlying issues
While the Chinese international travel market is beginning to return, OAG partner John Grant said there are a number of problems to resolve before the floodgates open.
He said: “There is no doubt that the Chinese economy is struggling and with that struggle disposable income is being impacted massively.”
Grant added the problem has been further exacerbated by the weakness of the yuan on the international markets, having depreciated against the dollar by as much as 7 per cent in 2023.
Meanwhile millennials keen to buy their own homes are not just being helped out financially by their parents but also their grandparents, leaving them with less money to spend on their own trips.
Gary Bowerman, director of travel consultancy Check-in Asia, agreed that the economic situation in China has been key to reining in the urge to travel, especially among young Chinese who are being forced to adapt to a very different world from the one their parents grew up in.
He said: “Those who are 30 and under had only ever seen growth and progression. Now they have seen Covid, unemployment, wage cuts and job cuts which they have never experienced before and that obviously has an impact on discretionary spending.”
Bowerman added that even though overseas leisure travel was given the go ahead in 2023, it took a while for the sector to react.
He said: “The travel industry shut down for three years and it took a long time for the travel infrastructure to recover.”
While the Chinese market might not be taking off as quickly as hoped in 2023, the growth is there and 2024 could prove to be very different last year.
Grant said as the Chinese begin travelling internationally again, there are taking trips to nearby destinations to build up their confidence.
Of the top five countries with the most seats going to and from China, OAG’s statistics show Japan is currently the most popular with a total of 15.6 million scheduled seats available between the two countries in February 2024, compared with 16.1 million seats in February 2019.
Thailand comes second with 6.8 million seats in February 2024 compared to 8.5 million in 2019 while South Korea lies third with 6.5 million seats in 2024 as opposed to 6.8 million in 2019.
Fourth placed is Singapore with 3.33 million seats in February this year compared to 3.27 million in 2019 while Hong Kong takes fifth place with 2.7 million seats compared to 3.6 million in the same time frame.
Crossing continents
While the situation might be improving in local markets, there has been far less growth in Europe, where European Travel Commission figures show the number of Chinese travellers, who accounted for 13 per cent of all pre-Covid, long-haul travellers in Europe, was 67 per cent lower in 2023 than the 15.5 million who visited in 2019.
OAG data shows the most popular European destination is currently the UK, which benefits from a strong student population frequently visited by family members, and which recorded growth with 104,991 seats in February 2024, up from the 80,919 seats scheduled in February 2019.
Germany was second with 94,870 seats this February compared to the 96,984 available in the same month pre-pandemic while Italy came in third place having nearly doubled the 41,026 seats available in 2019 with 70,004 this February.
While the UK and Italy’s figure might look good, they are uncommon of the overall European experience.
Tom Jenkins, the CEO of the European tourism association ETOA, said: “The numbers are slightly more than a trickle but there’s no doubt the Chinese market is slow coming back.”
He said Chinese travellers visiting Europe face more problems than just the weakened yuan and include real price inflation and a lack of product availability as North American tourists flood the continent.
The European renaissance has been further complicated by the Russian invasion of Ukraine which has led to a ban on western airlines flying through Russian air space, although Chinese airlines are still free to cross it.
Jenkins said: “The Chinese air capacity for Europe is half of what it was in 2019. Air capacity now has to go via the Gulf or America rather than over Russia while war on the European mainland doesn’t play well in the Chinese market.”
Bowerman agreed the ban on western airlines over Russia had been an issue but predicted the Gulf carriers will step in with price cuts to drive the market via connected flights.
But he also argued that the pandemic and ensuing global travel lockdown gave both airlines and Chinese airports the opportunity to rationalise their networks.
“Provincial and city governments in China are enormous and they underwrote long-haul routes to Europe which they can’t afford any more,” he said.
“They were unprofitable routes and they needed to be canned at some point and the driving force for that was Covid.”
Such rationalisation might have been a good thing, but with the pandemic now over it remains to be seen whether 2024 is the year that Chinese travellers continue their recovery from a bad case of long Covid.