What Happened: On the eve of China re-opening its border, many countries have issued restrictive policies for arrivals from mainland China, Hong Kong, and Macau, dashing hopes that these travelers will return overseas en masse.
Japanese Prime Minister Fumio Kishida declared that from December 31, all travelers from China will be subjected to rapid COVID tests upon arrival, positive results will mean 5-7 days quarantine at designated facilities. A day later, the U.S. announced that starting from January 5, Chinese arrivals will need negative COVID-19 test results within 48 hours of boarding their flights. Canada and Australia subsequently followed suit. Italy, France, Spain, South Korea, and the UK all issued similar policies around the New Year, while Morocco took it one step further and imposed an entry ban on all travelers from China regardless of their nationalities on January 3.
The rapid spread of COVID-19 within China after its sudden exit from “Dynamic Zero” and concerns about potential new variants are the cited reasons for the latest policies. However, China Central Television (CCTV) criticized these measures for “politicizing pandemic control” and accused western countries of hypocrisy since they once urged China to relax its stringent policies. On Weibo, the hashtag “CCTV comments on prohibitive entrance policies against Chinese travelers” has received 140 million views, becoming the 8th highest trending topic.
The Jing Take: The new policies will undoubtedly discourage some Chinese consumers from traveling overseas at the moment. The travel retail and hospitality sectors in countries with stringent testing requirements will likely host fewer Chinese visitors during the Lunar New Year holiday week at the end of January. Chinese health experts had previously warned that the peak of the ongoing COVID wave will possibly coincide with the holiday period.
However, the restrictions are unlikely to dampen Chinese enthusiasm for revenge travel. Data from travel platform Ctrip suggests that over the New Year holiday weekend bookings for international flights increased by 145 percent, and outbound traveler numbers grew about 70 percent year-on-year. So far, bookings for international flights during the Chinese New Year holiday week have seen a 260 percent jump compared with the same period last year. Popular destinations include Thailand, Singapore, Indonesia, Japan, and South Korea.
Chinese travelers will most likely adjust their travel destinations based on new policies, instead of canceling the notion of travel as a whole. Asian countries without such restrictions, such as Singapore and Thailand, could emerge as the biggest winners in luring Chinese tourists this January. Some might select Hong Kong and Macau instead, which will be a boon to local luxury retail, while others might opt for domestic alternatives. Ski and hot spring resorts witnessed their popularity surging by close to 180 percent during the New Year break. Many travelers will also be undeterred by the new measures and press on — as they may be perceived as minor inconveniences when compared to previous strict testing routines under China’s “Dynamic Zero” policy.
Finally, as China’s current surge in COVID cases eventually subsides, the restrictions imposed on Chinese travelers will presumably be withdrawn as well. Japan has already relaxed its limitations on the number of flights coming from Hong Kong. The world just needs to wait a little longer for Chinese outbound travel to return to pre-pandemic levels.
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.