Comment: Year of The Tiger to mark return of Chinese tourists  

“Reliable sources within the Chinese travel sector have been making predictions on the resumption of outbound tourism,” writes Domenica Di Lieto, CEO, Emerging Communications

As we head into the Chinese New Year celebrations next week, in a guest article for DFNI, Domenica Di Lieto, CEO of Chinese planning and marketing consultancy, Emerging Communications, addresses the agonising question of when Chinese outbound travel will resume, how travel restrictions have created an overflow of pent-up demand for overseas experiences, and what brands and retailers must do to in preparation for their welcome return.

The most asked question I get since the pandemic began is, ‘When will Chinese long haul travel return?’ There is understandable reasoning behind it. Chinese travellers journeyed in great numbers out of China, and their holiday shopping was important to so many areas of so many economies. Spending in 2019 was as high as £230bn depending on the source you find most reliable.

It is at this point in the calendar when Chinese tourists are missed most acutely. Chinese New Year is the time when the greatest number venture abroad, but this lunar cycle, the Year of The Tiger, is likely to be the last time they will be absent due to Covid.

Domenica Di Lieto, CEO, Emerging Communications

The timing of the return of outbound travel from China will become clearer after the Winter Olympics being hosted in Beijing, ends on 20 February. In the lead up to the games, there was no prospect of the government relaxing travel rules. Its full attention has been on staging a Covid-free games.

However, reliable sources within the Chinese travel sector have been making predictions on the resumption of outbound tourism, and there is an abundance of research and anecdotal information that reveals a very strong desire to get back to long haul travel as soon as possible.

The most authoritative indication on the return of international leisure flights comes from the China Tourism Academy, which is a division of China’s Ministry of Culture and Tourism. It has said travel out of the country is due to return in the second half of this year. Given the source, this is a significant statement. However, Liang Jianzhang, Chairman and Cofounder of Ctrip, China’s biggest and most influential international travel company, believes restrictions will be lifted in the first half of this year.

Other commentators point to the National People’s Congress in November as the turning point, with the thinking being that once the President is appointed for a historic third term, the risk to regulation relaxation will be more acceptable. However, this opinion is shared mostly by business and political analysts outside China.

There is debate too about the numbers returning to holidaying abroad. Travel data company ForwardKeys, believes it will take until 2025 to get back to 2019 levels, but consulting firm Oliver Wyman, says that volume will be reached in the fourth quarter of this year.

What is worth considering are the new variables affecting the numbers who form the long haul buyer demographic in China, and the news is very good indeed. It is increasing in size considerably and will go on growing for the foreseeable future.

The Chinese economy has grown significantly – 18% last year. Within this fact, there is even better news. Most growth has occurred in Tier 2 and 3 cities and above. These are not the traditional locations where international travellers are to be found living, but it is these areas in which most future market growth has been expected. They have disproportionately benefited from economic growth, and consequently, millions of families and individuals have been incorporated into the middle class with financially feasible aspirations of long haul tourism. This trend will continue as long as the economy grows, which it is due to do.

The Hainan Question

The desire of Millennials to get their proper fix of distant places and experiences, and the opportunity to buy limited edition and the impossible to get products in China, has not diminished. A key element of this is broadcasting pictures of activity and purchases on social media.

Hainan has been a point of focus for international duty-free retailing for several years. However, it poses a limited threat to retailers with outlets in traditionally popular locations for Chinese long haul travel. The duty-free spending limit per person is capped at less than £12,000, and Hermes, Louis Vuitton, Chanel and Richemont are yet to establish a presence in Hainan.

Millennials Are Ready To Go

There is no shortage of evidence that Millennials are anxious to return to international holidaying. Travel remains the most popular leisure pursuit of China’s young and wealthy. Restrictions have concentrated this desire, and Chinese social media is awash with heartfelt concern on the subject:

“The days of not being able to travel abroad are heartbreaking. Day and night, I miss the days when I could travel at any time.”

“Although it has become very troublesome to travel abroad under the pandemic, I still succeeded, and I love this experience.”

“I really want to travel abroad. Travel is about action, action solves anxiety.”

“The times when I could go abroad freely are far away, and now I am more anxious than ever.”

The latest surveys support the sentiment on social media. Dragon Trail International’s recently released travel monitor research of internally experienced travellers, reveals nearly 80% of more than 1,000 individuals surveyed are considering outbound travel this year, and 17% said they are just waiting for restrictions to be lifted. More than half already have a target destination.

Get Prepared Now

With the resumption of tourism out of China likely this year, it is worth remembering that Chinese tourists plan meticulously in advance. Before the pandemic it was the norm to create day to day activity itineraries, and even more detailed shopping planning down to the exact item, price and retail outlet. Given the time available for preparation, and desire to make the most of refound opportunities, the levels of organisation will be higher than ever before.

It is therefore important for brands and retailers to activate marketing now to re-establish positioning, renew connections with target buyers, and get on shopping lists. Spur of the moment shopping will be a feature of the Chinese return to international airports, but the majority will have decided what and where to buy well in advance.