BEIJING/SHANGHAI – The recovery of Chinese overseas travel from the COVID-19 pandemic is slowing down due to rising costs and visa difficulties, leading travelers to prefer local and short-haul destinations.
Eighteen months after China lifted its strict zero-COVID policies and reopened its borders, the recovery in outbound travel is falling short of market expectations. The shape of Chinese travel is also changing, with a significant increase in domestic trips.
China’s outbound travelers, known for being the world’s top spenders on international tourism and airlines, are not yet traveling at pre-COVID levels. This delay impacts travel-related companies, hotels, and retailers worldwide. Last year, Chinese people took 87 million trips abroad, 40% less than in 2019, and spending by Chinese travelers was down 24% compared to 2019. In contrast, U.S. travelers spent 14% more during the same period, according to U.N. Tourism data.
The lag in Chinese travel recovery is bad news for popular destinations like France, Australia, and the U.S., which were among the top choices for Chinese travelers before the pandemic.
Liu Simin, vice president of the tourism branch of the China Society for Futures Studies research institute, predicts that China’s international travel may not return to pre-pandemic levels for another five years. “The recovery is a lot slower than expected,” Liu said. “The devaluation of the Chinese yuan combined with inflation in the U.S. and Europe is a double blow.” The Chinese currency has dropped more than 2% against the dollar since the start of the year, increasing costs for Chinese travelers abroad.
Consultancy Oliver Wyman recently revised its estimates for China’s international travel recovery to late 2025, six months later than previously forecast. “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, a partner at Oliver Wyman in Hong Kong.
Despite these challenges, overseas travel is rebounding, with Chinese travelers once again the world’s top spenders on international tourism last year, after temporarily falling behind the U.S. in 2022, according to U.N. Tourism data. This summer, 8% of flights at Chinese airports were international, up from just 1% in 2022, according to aviation data provider OAG.
Shift to Domestic Travel
The recovery in overseas travel is overshadowed by a surge in domestic trips, which reached a record 295 million during the five-day May Day holiday, up more than 20% from 2019, according to official data. Domestic airline seats increased by 16% in May compared to the same month in 2019, while international flights were down 30%, according to Cirium data.
Wouters noted that 40% of those who traveled abroad in 2023 for the first time since borders reopened decided not to travel internationally again this year, mainly due to inconvenience and long visa processing times for many European destinations.
Beijing resident Wang Shu, 38, chose to vacation domestically after canceling a trip to France because he could not get a visa despite booking months in advance. “I tried booking the interview in late March, as I planned to attend the French Open tennis in late May, but the earliest date I could book was June 19,” Wang said. Instead, he 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, which used to be the top source of tourists before COVID, is now number four, with arrivals down 53% in March compared to March 2019, according to Margy Osmond, chief executive of Tourism & Transport Forum Australia. Chinese travelers to France, the most visited country in the world, have reached only 28.5% of 2019 levels, according to airport operator ADP. Capacity on U.S.-China routes remains down more than 80% from 2019 levels, hindered by increasing bilateral political tensions. The U.S. National Travel and Tourism Office expects Chinese tourism to the U.S. to fully recover only by 2026.
In contrast, countries with visa-free policies are seeing strong growth in Chinese visitors, including Singapore, Malaysia, Thailand, the United Arab Emirates, Qatar, and Saudi Arabia, where flight capacity has also increased. Switzerland, popular with high-end travelers, offers a seven-day visa process, according to Jane Sun, CEO of Trip.com Group. Japan has also seen a surge in Chinese travelers this year, boosted by a drop in the yen’s value.
“We are not just seeing a market re-growing, we are seeing a market re-shaping,” said Gary Bowerman, director of tourism intelligence firm Check-In Asia, during an OAG webinar last month.