China saw a major rebound in travel over the Lunar New Year holiday period this year, with both domestic and international travel returning close to pre-pandemic levels. This surge in travel signals a recovery in consumer demand and economic activity after several years of COVID-related disruptions.
Domestic travel leads the rebound
Domestic travel within China saw a huge resurgence over the 7-day Lunar New Year break from December 31st to January 6th. According to government estimates, over 308 million domestic trips were made by travelers during this period. This represents a recovery of over 70% compared to domestic travel in 2019 before the pandemic emerged.
Some key stats on China’s domestic travel boom:
- Over 2 million train trips were booked on January 6th alone as people returned from their holiday destinations
- Domestic tourism revenue over the holiday week was estimated at $73 billion
- Major destinations like Hainan province saw a doubling in tourism revenue compared to last year
Driving this rebound has been China’s dismantling of most zero-COVID restrictions which had depressed travel demand over the past three years. The New Year holiday was the first major travel season without mass lockdowns, mandated quarantines and frequent testing requirements.
With most rules lifted, the Pent-up urge to travel, visit family and pursue leisure activities after years of COVID disruptions was finally unleashed. This influx of domestic travel is providing a vital injection of consumer spending into the economy.
International travel rebounds to near pre-COVID levels
Not only has domestic travel rebounded, even international travel has witnessed a notable recovery according to government data and industry estimates.
On January 2nd alone around 792,000 cross-border trips were made, approaching 80-90% of average daily volumes before the pandemic in 2019. Some key trends observed were:
- Large numbers of Chinese students going abroad as universities reopened
- Relaxed visa and quarantine restrictions driving greater volumes
- Particular growth in travel between China and SE Asian destinations
| Destination | Average no. of daily trips in 2022 | New Year 2024 daily average | % recovery vs 2019 |
|---|---|---|---|
| Thailand | 15,102 | 66,613 | 95% |
| Indonesia | 10,096 | 39,153 | 89% |
| Singapore | 15,985 | 50,153 | 86% |
This rebound in international travel is crucial for the tourism-dependent economies of SE Asia which have missed Chinese travelers and their spending power greatly since 2020. As one of the world’s largest source markets for outbound tourism, China’s return will drive greater global demand and be instrumental for recovery in the international travel sector.
Travel boom signals economic upside in 2023
The surge in consumer demand for travel is a very positive signal as China enters 2023 with uncertainty around its post-COVID economic growth trajectory.
Tourism alone contributes over 11% directly to China’s GDP. Then there are the multiplier effects across industries like hospitality, transportation, retail and recreation.
More open borders will also facilitate greater global financial, trade and people flows. Key sectors like education, healthcare and senior living which attract overseas capital and residents stand to benefit greatly as well.
With the latest numbers showing domestic travel back to 75% and international travel back to as high as 90% of pre-pandemic levels, the worst disruption for China’s tourism industry seems to be over.
The momentum is expected to continue with the state further relaxing visa and quarantine requirements in 2024 to attract greater international travel. Luxury and high-end experiences will remain a major trend shaping China’s hospitality sector going forward.
Challenges remain around insufficient infrastructure
However, some uncertainties around China’s travel sector growth still prevail. Insufficient infrastructure could emerge as a bottleneck given the sudden influx of visitor volumes over a short period of time.
During this New Year period, reports already surfaced of fully booked hotels, congested airports and crowded trains even with extensive capacity expansion investments made in recent years. Passenger volumes on trains around major city clusters easily exceeded 2019 levels over this holiday week.
Much more funding needs to flow into infrastructure development, especially around second and third tier cities which represent major emerging tourist spots. Supporting policy initiatives like tax incentives for private players to build out transport and hospitality services will be needed.
Addressing these infrastructure constraints quickly will ensure the rebound we have witnessed so far does not get choked due to lack of facilities, delays and overwhelmed tourist sites undercutting consumer experience.
The early indicators from this New Year travel season all point to Chinese tourism roaring back close to its past peak levels. With some smart policy moves and investments, the sector’s future looks bright to cross new highs that seemed improbable just six months back. The world should gear up to welcome back Chinese travelers very soon!
To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.
