Domestic travel has boomed and high-speed rail has grown in popularity since China reopened its borders in 2023 after a three-year coronavirus quarantine. But international travel, both domestically and internationally, has been slow, and air capacity remains at only one-third of pre-pandemic levels.
The economic risks are high. Before the pandemic, Chinese tourists were the world’s biggest spenders, accounting for 20% of global tourism spending, according to the United Nations World Tourism Organization.
Over the past year, Chinese authorities have sought to further encourage travel to Japan. Among the changes is China agreeing to waive travel visas and extend visa-free travel periods for visitors from eight countries, including Germany and France.
The main factor preventing Chinese people from traveling abroad will continue to be the Chinese economy. Although growth has rebounded from the pandemic, the weight of a deep real estate recession has dampened consumer spending and confidence in China. And global geopolitical tensions remain a wild card. China has trade disputes with the United States and Europe, home to many large multinational corporations. Travel is suffering as they rethink business in China.
Here’s what you need to know about the current state of China’s travel economy.
Travel to China has largely come to a standstill due to the pandemic. Full recovery will not occur until 2025.
Throughout the pandemic, China has enforced some of the strictest travel rules in the world. International travelers who managed to enter the country were sometimes forced to quarantine for up to two months at their own expense.
As of December, international flight capacity (basically the number of seats available on flights to and from China) was only 62% of what it was in December 2019, according to aviation data analysis firm OAG. But domestic travel is recovering, with the number of travelers nearly 10% above pre-pandemic levels during the three-day weekend late last month.
At the beginning of last year, there were only about 500 international flights in China each week, according to aviation regulator Civil Aviation Administration of China. Currently, that number is about 4,600, but by the end of the year that number is expected to rise to 6,000, or about 80% of pre-pandemic levels.
A big test will come next month during the Spring Festival around Lunar New Year, usually a busy period when millions of workers travel to their hometowns. China’s aviation regulator announced last week that Chinese airlines will plan an additional 2,500 international flights to accommodate Chinese New Year visitors.
Chinese transport officials say they expect 480 million people to take rail trips during the 40-day travel surge period in the weeks surrounding the Lunar New Year, an increase of nearly 40% from last year. Ta.
High-speed rail is becoming more popular as a mode of transportation within the country. According to China National Railway Group, the national railway operator, the number of rail travelers exceeded 20 million at the beginning of Golden Week in October, a record high, and the average number of passengers per day throughout the year exceeded 10 million.
Most analysts said they believe a full recovery in international travel will not occur until 2025.
Economists at Japanese bank Nomura said in a research note in January that the pace of recovery in the sector will largely be determined by how much Chinese travelers are willing to spend. Pandemic-era problems such as delays in issuing visas and passports until 2023 have been resolved.
“Although supply-side constraints have eased, demand-side resistance is now starting to set in, and significant headwinds to China’s outbound tourism recovery remain in 2024 and possibly into 2025,” Nomura economists said. Stated.
Applying for a visa and visiting China is a little less complicated.
In December, China began allowing visitors from France, Germany, Italy, Spain, Malaysia and the Netherlands to travel for 15 days without a visa, and announced the change would last until November 2024. China’s National Immigration Administration announced that 147,000 visas have been issued within the country. The first six and a half weeks of the program. China also reached an agreement to make visa-free travel more accessible for tourists from Thailand and Singapore.
For Americans, visa applicants no longer need to submit documents such as hotel reservation records, itineraries, and invitations. The authorities have also reduced all visa application fees by 25% until the end of the year.
It has also become easier for foreigners to pay when visiting China. Last July, major payment platforms WeChat Pay and AliPay announced that they would support foreign credit cards, allowing tourists to make payments just like locals. China has moved away from banknotes and coins, a trend that accelerated during the pandemic.
Flights between China and the United States are gradually resuming. Before the pandemic, there were more than 300 weekly flights between the two countries. That number was 36 cases a week in September, but has been gradually increasing. In November, the countries agreed to increase the number of flights to 70 per week.
Geopolitical tensions and reluctant Chinese travelers could hinder the sector’s recovery.
The difficult relationship between China and the United States will likely continue to lurk behind overseas travel to China.
The U.S. State Department maintains a “Level 3” travel alert for China, warning Americans to “reconsider traveling” to the country due to, among other things, the “risk of unlawful detention.”
China’s Ministry of Foreign Affairs has issued its own travel notice, warning that travelers to the United States are being “harassed and interrogated” at the border under “various excuses” and that Chinese nationals are being arbitrarily arrested and prosecuted. .
Changing preferences and expendable income among Chinese travelers could determine the course of the travel economy’s recovery.
“As Chinese households become more price-sensitive and rational, they prefer domestic tourism, which usually takes less time and money,” said Ying Zhang of the Economist Intelligence Unit, a research firm. .