The role of Connectivity and Sustainability in China’s outbound tourism

Dear reader,

The news are filled with pictures of suffering people in Israel, Palestine, Ukraine, Afghanistan and many other places, fit to create nightmares. Reports by scientists showing that the negative effects of global warming are developing faster than even the worst-case scenarios forecasted are not helping either to get into a holiday mood. In China, continuously discouraging economic figures and the sudden death of former Premier Li Keqiang at the age of 68 years added more bewilderment and frustration.

Nevertheless, global travel and tourism is recovering fast. International air passenger numbers for 2023 are expected to reach 95% of the 2019 level and for many service providing companies around the world the bigger problem than lack of guests and customer is the shortage of employees.

Chinese outbound numbers are increasing as well and the share of trips going no further than the Special Administrative Regions of Hong Kong and Macau is getting smaller, moving into the direction of pre-pandemic levels of about 45% of all trips and about 1/3 of the total in terms of expenditure.

Optimism had returned especially to Hong Kong SAR, after welcoming in August 2023 for the first time more visitors from Mainland China compared to the same month in 2019. Before getting too excited about the August results, it was however necessary to remember that the 3.4 million arrivals in August 2023 beat the 2.8 million arrivals in August 2019 mainly because this was the first month of unrest in Hong Kong four years ago, which kept many Mainland Chinese from visiting the former colony. Looking back to August 2018, the arrival number was much higher with 4.8 million Mainland Chinese arrivals, so the 2023 result represents only 70% of the result five years before.

The jubilations were short-lived in any way. For September the respective figures for 2023, 2019 and 2018 were 3.7, 2.4 and 2.2 million arrivals. Accordingly, the 2023 result did not reach the 2019 number and fell to below 60% compared to the achievement of 2018.

If the total number of arrivals from Mainland China to Hong Kong SAR in the first nine months of 2023 is compared to 2019 and 2018, the picture is even bleaker. As up to July 2019 arrival numbers boomed, while the first months of 2023 saw low arrival numbers, altogether the about 37 million arrivals in Jan-Sept 2018 and 2019 respectively are almost exactly double the 18.7 million arrivals in the same period of 2023.

However, this is not necessarily bad news for the development of global Chinese outbound tourism. In Q2 2023 41% of all Mainland Outbound trips ended in Hong Kong SAR, in Q2 2019 it had been only 31%. For the third quarter of 2023 it can be expected that Hong Kong SAR will see again a smaller share of the overall outbound figures, indicating that more Chinese started to travel again to foreign countries beyond Greater China.

As usual, the COTRI weekly Editorial you are reading is included in the free part of the weekly edition of COTRI INTELLIGENCE, together with China This Week and the News. For the Topic of the Week, the Deep Dive consulting and the Facts and Views we invite you to consider a Premium or Premium Plus subscription and offer a special welcoming subscription for one month with a 59% discount here: https://cotri-intelligence.ghost.io/welcoming-offer.

In this week’s Topic of the Week we continue the analysis started in the last edition of the qualitative changes which became apparent during the Golden Week travel for the marketing.

The Deep dive consulting text concentrates this week on education as one of the main motivations for travel abroad besides leisure and business trips. Education will also be the topic of one of the four “villages” COTRI is organising for the GITF 2024, to provide an opportunity for smaller Higher Education institutions, providers of summer camps, specialised tour operators and destinations to enter the market with low cost but high visibility.

Facts and Views provides an overview about the latest arrival numbers for selected countries, comparing the 3rd quarter of 2019 and 2023. In the News you will find as always selected news items about different aspects of the Chinese outbound market.

If it is “carpe diem, quam minimum credula postero” or rather “The future’s so bright, we got to wear shades”, stay positive!

As always best wishes from Prof. Dr. Wolfgang Georg Arlt and the whole COTRI INTELLIGENCE team!the new month has started with reminders of the need for more international cooperation and less confrontation as well as with floods, storms and earthquakes showing again the futility of mankind to try to vanquish nature without regard for a sustainable development.

The penultimate month of the year is also already the time to start to look at the whole year 2023. COTRI INTELLIGENCE content partner ForwardKeys identified in their new Global Travel Trends 2023 major differences between the Golden Week periods this year in connection to the available air transport capacities as well as a greater “potential for accelerated recovery” for China’s outbound travels in 2024.

The Chinese New Year period is not even mentioned, as a few weeks after the reopening of the borders on January 8^th, 2023, very few air connections existed and additionally visa were difficult to aquire. According to ForwardKey, the May Day holiday, happening shortly after the total reopening, saw the majority of Chinese travellers still opting for domestic trips because the options for international travel remained limited, providing bigger shares of outbound travellers to Hong Kong SAR and Macao SAR, which can be reached also without air connections, and regional destinations like Singapore and Malaysia which managed to reopen more routes quickly.

The October Golden Week, which this year was a day longer as it coincided with the mid-Autumn festival (from 29th September to 6th October), however, restored connectivity to long-haul destinations popular with Chinese travellers. Greater numbers of Chinese visitors could be registered.

As key factors for full reactivation in APAC and especially in China include not only connectivity and industry preparedness but also consumer confidence, there still needs work to be done to turn the “potential for accelerated recovery” into more bums on seats.

As usual, the COTRI weekly Editorial you are reading is included in the free part of the weekly edition of COTRI INTELLIGENCE, together with China This Week and the News. For the Topic of the Week, the Deep Dive consulting and the Facts and Views we invite you to consider a Premium or Premium Plus subscription and offer a special welcoming subscription for one month with a 59% discount here: https://cotri-intelligence.ghost.io/welcoming-offer.

As usual, the COTRI weekly Editorial is included in the free part of the new content of this edition, together with this text “China this week”, the News and the COTRI News. For the Topic of the Week, the Deep Dive consulting and the Facts and Views we invite you to consider a Premium or Premium Plus subscription and offer a special welcoming subscription for one month with a 59% discount here: https://cotri-intelligence.ghost.io/welcoming-offer.

In this week’s Topic of the Week we look at the “Double Eleven” shopping event and what tourism service providers can learn from the online sellers’ reaction to the changed consumption patterns in China.

The Deep dive consulting text concentrates this week on sustainable tourism as a topic which has gained importance worldwide including Chinese outbound tourism. Sustainable tourism will also be the topic of one of the four “villages” COTRI is organising for the GITF 2024, to provide an opportunity for tourism service providers, specialised tour operators, eco-friendly hotels and destinations to enter the market with low cost but high visibility.

Facts and Views follows up on the general discussion of the comparison of arrivals in the 3rd quarter of 2019 and 2023 respectively and the development in Hong Kong SAR in the last issue. This week we have a closer look at a comparison of pre- and post-pandemic Mainland visits to Hong Kong SAR with a focus on the development of same day visits and overnight stays.

Additionally, the COTRI weekly Editorial reflects on the role connectivity has played in China’s tourism recovery in 2023.

In the News you will find as always selected news items about different aspects of the Chinese outbound market.

As always best wishes from Prof. Dr. Wolfgang Georg Arlt and the whole COTRI INTELLIGENCE team!