Visa delays and insufficient flight capacity have held back a full recovery in China’s outbound travel after the Covid-19 pandemic, according tothe CEO of Trip.com Group, the country’s largest online travel agency.
“There are two major hurdles for the recovery – the first is visa restriction, and the second is flight capacity,” Jane Sun said at a media briefing in Shanghai on Thursday. “I am hoping these two bottlenecks ease and we are able to bring more [Chinese] customers to different countries.”
The release of pent-up overseas travel demand is “creating a strong trajectory” for Trip.com, but the company remains cautiously optimistic because of the gloomy economic outlook, she added.
After Beijing lifted its stringent zero-Covid policy in the first quarter of 2023, millions of Chinese consumers resorted to “revenge spending”, sparking a frenzy on leisure and entertainment, boosting the revenues of hotels, airlines, tourist-attraction operators and restaurants across the mainland.
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However, outbound tourism was muted. Only 87 million Chinese travelled abroad in 2023, compared with 155 million in 2019, according to data from the China Tourism Academy.
A Chinese citizen planning to travel to Germany, for example, currently has to wait at least four months before being interviewed by visa officers, while visa delays are also preventing thousands of mainland tourists from visiting the US, Sun said.
Meanwhile, international flights have only reached about 70 per cent of pre-Covid levels and are likely to only reach 80 per cent by the end of 2024, she added.
“Although we have sent a lot of [Chinese] customers to the rest of the world, the outbound wave is just starting,” Sun said. “Going forward, this [business] will be our focus.”
Trip.com reported revenue of 11.9 billion yuan (US$1.6 billion) for the first quarter of this year, an increase of 29 per cent year on year. Net profit rose 28 per cent to 4.3 billion yuan, handily beating analysts’ expectations, according to Bloomberg.
The online travel agency’s revenue from domestic travel services jumped by more than 20 per cent year on year in the first quarter, Sun said.
China’s total domestic passenger volume during the Labour Day holiday from May 1 to 5 topped 272 million a day, 24 per cent higher than the same period in 2019, according to official data. It was in line with a forecast of 270 million made by research firm Gavekal Dragonomics.
Tourism spending during the five-day holiday increased 14 per cent from 2019.
Gavekal said a bigger rise in passenger volume than spending value means that mainland tourists were spending less on average, as budget-conscious consumers opted for cheaper hotels and food while travelling.
Many big hotel chains have failed to capitalise on the travel boom because tourists opted for lesser-known resorts, property consultancy JLL said in a report on China’s hospitality sector this week.
Stiff competition has also prevented hoteliers from raising room rates, Sun said.