Due to the ongoing economic weakness in China, the devaluation of the Chinese yuan leading to increased overseas costs, and the increasing difficulty in obtaining visas, the trend of Chinese people traveling abroad is weakening as they are opting more for domestic travel or short-distance trips abroad.
According to a report by Reuters on June 16, a large number of Chinese traveled abroad before the pandemic. However, after 18 months since the border reopening by the Chinese authorities, the resurgence of Chinese overseas travel is lagging behind market expectations, leading to a shift in the tourism landscape with a surge in domestic travel.
Amid the continued real estate crisis, high unemployment rates, and dim economic prospects in China, since the outbreak of the pandemic, Chinese consumers have become more frugal, triggering price wars across various goods from travel to automobiles, coffee, and clothing.
Last year, 87 million Chinese travelers went abroad, a 40% decrease from 2019 pre-pandemic levels. Industry analysts have noted that the pace of international travel has slowed down since the Chinese New Year in February this year. According to UN tourism data, Chinese tourist spending decreased by 24% compared to 2019, while spending by American tourists increased by 14%.
Since the beginning of this year, the exchange rate of the Chinese yuan against the US dollar has dropped by more than 2%, increasing the cost for Chinese travelers going abroad.
Imke Wouters, a partner at consulting firm Axis Consultancy based in Hong Kong, stated, “In fact, I believe consumers are more cost-conscious than last year, and you can see this affecting travel trends.”
Official data from the Chinese government shows a significant increase in domestic travel, with a record 295 million domestic trips taken during the May Day holiday period, representing a growth of over 20% compared to 2019.
Data from Cirium indicates that domestic airlines in China increased seat capacity by 16% compared to 2019 levels in May, while international flight capacity decreased by 30%.
Wouters from Axis Consultancy mentioned that since the border reopening, 40% of those who took their first international trips in 2023 have decided not to travel abroad this year, mainly due to inconvenient and lengthy visa processing for many European destinations.
38-year-old Beijing resident Wang Shu had to cancel his trip to France due to visa complications and opted for a domestic holiday in Changsha instead.
“My attempt to schedule a visa interview at the end of March, with plans to attend the French Open in late May, only resulted in the earliest available date being June 19,” Wang Shu explained.
Margy Osmond, CEO of the Australian Tourism and Transport Forum, noted that China was Australia’s largest source of tourists before the pandemic but now ranks fourth, with a 53% decline in the number of Chinese tourists in March compared to March 2019.
According to airport operator ADP, the number of Chinese tourists visiting France, the country with the most tourists in the world, only reached 28.5% of the 2019 levels.
Due to escalating geopolitical tensions between the US and China, air capacity on routes between the two countries has decreased by over 80% since 2019. The US National Travel and Tourism Office expects Chinese tourism to the US to fully recover by 2026.
Countries experiencing growth in Chinese tourist numbers include Malaysia, Thailand, the United Arab Emirates, Qatar, and Saudi Arabia.
Additionally, due to the depreciation of the Japanese yen, there has been a significant increase in the number of Chinese tourists visiting Japan this year.
On the other hand, the number of foreign tourists visiting China has significantly decreased. In 2019, nearly 98 million international tourists visited China, whereas last year there were only 35 million, including for business, students, etc.
According to BBC, Huang Songshan, Director of the Tourism Research Centre at Edith Cowan University in Australia, attributed this slowdown to “changes in the global geopolitical landscape”. He referenced a 2023 Pew Research Center survey in his article in the East Asia Forum, stating, “Most individuals in Western countries have a negative view of China. Tightening social regulations by the Chinese government may make foreign visitors uncomfortable.”
Australia advises travelers to be “highly cautious,” warning of potential risks of arbitrary detention or severe enforcement under broadly defined national security laws.
The US Department of State advises reconsidering travel to mainland China due to arbitrary enforcement of local laws (including exit bans) and risks of erroneous detention.