Bad times for the travel business as COVID lockdowns persist
China’s millions of tourists are staying put as lockdowns, long quarantines, and travel restrictions lead to staycations, not vacations.
Since 2012, China has been the world’s biggest and most profitable source of global tourists, sending millions of people each month to Thailand, Japan, France, Italy, the U.S., and many other destinations.
- In 2019, there were nearly 155 million outbound tourists from China, almost three times as many as in 2010.
But when COVID-19 went global in the spring of 2020, the flow of China’s free-spending tourists to other countries stopped completely.
- Domestic tourism, however, recovered in 2020, as China successfully stopped local transmission of the virus, and domestic travel and leisure spending recovered to about 60% of pre-pandemic levels.
- In 2019, domestic tourism contributed 11.05% to China’s gross domestic product, and supported nearly 80 million jobs.
But this year, the coronavirus has put an end to the domestic holiday dreams of Chinese tourists, and hotels, airlines, and tour companies.
- Lockdowns, mass testing requirements, and the fear of being stuck away from home and forced into quarantine are keeping travelers at home.
- One telling example: The number of tourist trips to Sanya, a beach destination in Hainan, sometimes dubbed “China’s Hawaii,” plunged 99.4% during the recent Qingming Festival holiday, from April 2 to April 5, with hotel occupancy rates averaging only 12.6%.
- Tourists from other provinces accounted for just 5% of visitors at scenic spots across China during the Qingming holiday.
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Provincial tourist boards are encouraging locals to use tourist facilities to make up for the lost business:
- The lakeside town of Dali, in Yunnan Province, last week gave out 10 million consumption vouchers to encourage local spending and cut prices of tickets to tourist spots.
- The province of Ningxia began selling discounted all-in-one passes to more than 60 scenic spots.
The context: Lockdowns, fear of lockdowns, and the increased difficulty of actually getting around the country are real obstacles to the recovery of domestic tourism.
- There are now just over 35,000 domestic commercial flights in operation every week, the lowest since the year 2000.
The takeaway: Economic concerns are taking a back seat to pandemic prevention measures. The recovery of domestic tourism depends entirely on how quickly Beijing can stop transmission of the virus, as it seems highly unlikely that the government will choose to end its COVID-zero policies.
