The post-pandemic future of Chinese tourism

The post-pandemic future of Chinese tourism

The Asia-Pacific tourism industry was thriving before the Covid-19 pandemic, driven by strong demand from Chinese tourists with increasing disposable incomes.

Pre-pandemic, Chinese tourists’ arrival to the Asia-Pacific region was forecast to increase to 150 million by 2020, with an aggregate expenditure of US$230 billion. But this did not materialize due to pandemic-related travel restrictions that still affect Chinese tourists today.

Historically, Chinese tourists tended to travel as part of package trips involving group tours with multiple destination stops. This trend is changing as younger Chinese tourists favor more independent forms of travel that allow for greater flexibility. But the thriving tourism industry was completely disrupted by the pandemic.

The Asia-Pacific suffered an 84% plunge in overseas visitors and recorded a 300 million decrease in tourist arrivals. This led to a massive slowdown in the aviation, hotel, restaurant and tourism industries that still lingers today.

As Asia Pacific’s travel and tourism industry slowly recovers to pre-pandemic levels, some key trends have emerged. There is higher demand for rural and coastal destinations that have natural elements and offer more privacy compared to urban destinations.

This is influenced by Covid-19 lockdowns which were particularly harsh for those living in high-density city apartments. Ongoing Covid-19 concerns mean that tourists tend to keep their travel plans simple, flexible and close to home.

There has been a significant increase in eco-tourism and wellness-based tourism. Since the pandemic, physical and mental health awareness has increased. This is part of a broader trend of younger tourists seeking socially conscious and sustainable tourism that supports the local community and the environment.

Chinese tourists arrive from Nusa Penida at the fast boat pier in Serangan island in Denpasar, on Indonesia’s resort island of Bali on January 26, 2020. Photo: AFP / Sonny Tumbelaka

The tourism industry is largely driven by the private sector, but it still depends on an intricate network of government rules, inter-country travel agreements and infrastructure investments. In the short term, tourist destinations and governments need to be vigilant about protecting against overtourism as travel rebounds in key markets — excluding China — in the Asia-Pacific region.

Overtourism is defined by UNWTO as “the impact of tourism on a destination… that excessively influences perceived quality of life of citizens and/ or quality of visitors’ experiences in a negative way.” Contemporary youth emphasize sustainability and this provides opportunities for governments to promote new sustainable tourism initiatives and enterprises.

The future of tourism across the Asia-Pacific must include diversification that extends beyond the traditional demographic of overseas visitors. In 2019, domestic tourist expenditures across the Asia-Pacific reached an all-time high. Destinations must be promoted to domestic markets to support the quick return of visitors in the short term.

In the medium term, destinations should strive to diversify visitors and build resilience. The pandemic has inadvertently led to some silver linings by reducing over-tourism, which has dispersed job creation and the economic benefits of tourism spending for top destinations while supporting tourism beyond these destinations.

The tourism industry can recalibrate the travel market to promote interregional travel and redress the balance away from China in the short to medium term. Chinese outbound tourism is not forecast to restart until at least 2023  and will not return to its pre-pandemic levels until 2024 due to China’s “zero-Covid” policy.

Beijing has remained firm with its zero-Covid policy, which effectively bans outbound travel. International flights are severely restricted and international arrivals are subject to strict quarantine. Although China is easing its quarantine and travel restrictions, the timeline for a return to “normal” remains unpredictable.

Hong Kong’s tourism industry will likely take two to three years to recover. While the current “0+3” quarantine policy has attracted some Asian tourists to Hong Kong, it is still insufficient to boost tourism. But there are still opportunities for Hong Kong tourism investors.

The gradual progression of the 0+3 policy toward the complete removal of entry quarantine restrictions and the continued promotion of quarantine-free customs clearance for travelers from mainland China provides a glimmer of hope for Hong Kong’s tourism recovery.

Once mainland China’s outbound travel resumes, the pent-up demand for travel from mainland China will be unleashed.

Due to health concerns, tourists from mainland China will prefer short-haul destinations in Asia such as Hong Kong, Singapore, Thailand and Malaysia. These destinations offer proximity, effective pandemic control, responsible destination management, high vaccination rates and good healthcare facilities. Asia-Pacific destinations are expected to rebound when Chinese outbound travel resumes.

The reopening of international borders and the recovery of Asia-Pacific tourism are also predicated on increased vaccination rates, harmonized border regulations and improved health system preparedness across the region.

Chinese tourists watch a traditional Thai dance at the Erawan shrine, a popular spiritual landmark in Bangkok, on January 27, 2020. Photo: AFP / Mladen Antonov

These standards can be supported with pandemic-related safety measures such as contactless airport check-in and vaccination passports. These digital tools will assure travelers and their destination’s residents.

Tourists are effective carriers of infectious diseases. The tourism industry needs to balance promoting industry recovery and minimizing public health risks.

The standardization of enhanced health precautions at airports, tourist accommodation, restaurants and attractions will benefit tourism industry stakeholders.

Countries that establish a well-coordinated approach to deterring new Covid-19 outbreaks will capitalize on the resurgence of international travel within the region.

Jun Wen is Lecturer in Tourism and Service Marketing at the School of Business and Law, Edith Cowan University. Danni Zheng is Assistant Professor in the Department of Tourism, Fudan University. Fangli Hu is PhD Candidate at the Centre for Precision Health, Edith Cowan University.

This article, republished with permission, was first published by East Asia Forum, which is based out of the Crawford School of Public Policy within the College of Asia and the Pacific at the Australian National University.