What Happened: China has lifted its outbound group travel ban to countries including Australia, Japan, South Korea and the US, enacted in January 2020 in response to the Covid-19 pandemic.
With China’s reopening in January this year, the aforementioned nations are among the last remaining countries to see Chinese tourism return. According to reports, China’s staggered approach to lifting the ban was influenced by geopolitics and trade.
China’s decision was met with positive reactions in the destinations. Prior to the pandemic, Chinese tourism generated $255 billion globally in 2019 — more than any other nation, with group tours making up 60 percent of that, according to Reuters.
The Jing Take: Global tourism hubs such as New York, Seoul, Sydney and Tokyo are about to get a lot busier as fall approaches. They can expect to see the return of sightseeing buses and groups of Chinese tourists.
However, a full rebound will take time, given visa authorization delays, a shortage of international outbound flights from China, and more worryingly, China’s slowing economy.
Noting these challenges, many Chinese consumers have opted to spend on domestic travel instead. With the rise of local duty-free shopping hubs including in Hainan and other regions, the repatriation of luxury has been a growing concern for destinations like South Korea and Japan, which previously relied on Chinese tourism and consumption.
While tourism operators in Australia rejoiced at the news of the ban’s lifting, there remains one more looming concern: how to accommodate a surge in the number of group tours, given operators’ reduced capacity and operations.
Recovery will be slow: “Due to the pandemic, we sold lots of tourist vehicles and lost many staff … it’s unlikely that people will come back as they have started [working] in new industries,” Melbourne-based tourism operator Christine Zhang told ABC News last week.
While global tourism operators and brands will need to take slow, cautious steps in rebuilding their operations to accommodate a rising influx of Chinese visitors, time may be on their side, as tourism numbers will not recover as quickly as anticipated.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.