BEIJING/SHANGHAI — A recovery in Chinese overseas travel from the Covid-19 pandemic is fading as rising costs and difficulties in securing visas cement a preference for local and short-haul destinations.
The delay in a revival to pre-Covid levels by China's outbound travellers, the world's top spenders on international tourism and airlines, is hitting travel-related companies, hotels and retailers globally.
Eighteen months after China dropped strict zero-Covid policies and reopened its borders, the recovery in overseas travel is lagging behind market expectations and the shape of Chinese travel is changing, with a surge in domestic trips.
Pressured by a prolonged property crisis, high unemployment and a gloomy outlook in the world's second-biggest economy, Chinese consumers have become more frugal since the pandemic, prompting discount wars on everything from travel to cars, coffee and clothes.
Chinese people took 87 million trips abroad in 2023, down 40 per cent from pre-Covid-19 levels, and industry observers say the pace has slowed since Chinese New Year in February. China's travellers spent 24 per cent less in 2023 than in 2019, while US travellers' spending was up 14 per cent, according to UN tourism data.
The Chinese lag is bad news for countries like France, Australia and the US, which were among the top destinations for Chinese travellers before the pandemic.
Dr Liu Simin, vice-president of the tourism branch of the China Society for Futures Studies research institute, forecasts China's international travel might not recover to pre-pandemic levels for another five years.
"The recovery is a lot slower than expected," Dr Liu said. "The devaluation of the Chinese yuan combined with inflation in the US and Europe is a double blow."
The Chinese currency has fallen more than two per cent against the dollar since the start of 2024, raising costs in yuan terms for Chinese travellers abroad.
Consultancy Oliver Wyman in May pushed its estimates for China's international travel recovery to late 2025, half a year later than it forecast in 2023.
"I would actually argue that consumers are even more cost-conscious than last year, and you'll also see that feed into travel trends," said Imke Wouters, Hong Kong-based partner at Oliver Wyman.
To be sure, overseas travel is rebounding, with Chinese travellers again the world's top spenders on international tourism in 2023 after falling behind the US in 2022, according to UN tourism data.
In summer, eight per cent of flights at Chinese airports have been international, up from just one per cent in 2022, according to aviation data provider OAG.
That recovery, however, is overshadowed by the surge in domestic trips, which hit a record 295 million during the five-day May Day holiday, up more than 20 per cent from 2019, official data showed.
Domestic airlines seats were up 16 per cent in May from the same month in 2019, while international flights were down 30 per cent, Cirium data shows.
Ms Wouters at Oliver Wyman said 40 per cent of those who travelled abroad in 2023 for the first time since borders reopened had decided not to travel internationally again in 2024, mainly due to inconvenience and long visa processing times for many European destinations.
Beijing resident Wang Shu, 38, vacationed domestically after cancelling a trip to France because he could not get a visa, despite trying to book a visa appointment months ahead.
"I tried booking the interview in late March, as I planned to attend the French Open tennis in late May, but the earliest date that I could book was June 19," Mr Wang said.
Wang instead vacationed in Changsha, the capital of Hunan province, known for its spicy food.
"The food was great, I watched a concert and spent one-tenth of the money I'd have spent in France," he said.
Australia's top source of tourists before Covid, China is now number four, with arrivals down 53 per cent in March from March 2019, said Margy Osmond, chief executive of Tourism & Transport Forum Australia.
Chinese travellers to France, the most-visited country in the world, have reached only 28.5 per cent of 2019 levels, according to airport operator ADP.
Capacity on US-China routes remains down more than 80 per cent from 2019 levels, weighed by intensifying bilateral political tensions. The US National Travel and Tourism Office expects Chinese tourism to the US to recover fully only in 2026.
By contrast, countries with visa-free policies have received strong growth in Chinese visitors.
These include Singapore, Malaysia, Thailand, the United Arab Emirates, Qatar and Saudi Arabia, where flight capacity has also increased.
Switzerland, growing in popularity with high-end travellers on Trip.com, boasts a seven-day visa process, said Jane Sun, CEO of Trip.com Group.
Japan has also received a surge in Chinese travellers in 2024, boosted by a plunge in the yen's value.
"We are not just seeing a market re-growing, we are seeing a market re-shaping," Gary Bowerman, director of tourism intelligence firm Check-In Asia, told an OAG webinar in May.
ALSO READ: China travel surges for May holiday but consumers remain wary
