China’s Outbound Tourism Is Difficult to Recover in 2020

Under the global epidemic, China’s outbound travel market has no tendency to restart at all.

At the same time, tourism bureaus of various countries have not stopped their work, and online publicity and recovery plans are in progress. However, destinations closest to China have maintained a more cautious attitude towards the recovery of China’s outbound travel business.

In fact, the tourism industry plays an important role in the economic development of the Asia-Pacific region, and its contribution rate is increasing year by year. According to the latest “Economic Impact Report” released by the World Tourism and Travel Industry Council (WTTC), the GDP created by the tourism industry in the Asia-Pacific region in 2019 was US$2.971 trillion, accounting for 9.8% of the regional economy. It also ranks first in the world in terms of providing employment, providing more than 182 million jobs, accounting for 9.6% of the total employment.

This means that when the new crown epidemic hits the global tourism industry, Asian destinations will have to bear greater losses and pressures. The expectation for the restart of the tourism market is also more urgent, and the Chinese market and Chinese tourists play an important role. Although there is no sign of a rebound in China’s outbound tourism market, tourism agencies of many countries, including South Korea and the Philippines, still insist on publicizing and promoting in the Chinese market, hoping that the inbound tourism business can get back on track as soon as the market resumes.

1. The Asian tourism market hit hard by the epidemic

The Chinese New Year holiday was originally the busiest time for Asian countries to welcome Chinese tourists. According to a report released by Ctrip, Japan and Thailand are the most popular destinations for Chinese tourists. After the global tourism industry paused due to the epidemic, these two countries were also representatives of the worst losses.

In Thailand, tourism is one of Thailand’s important economic pillar industries. According to data from the International Monetary Fund, due to the impact of the new crown pneumonia epidemic on the tourism industry, it is estimated that Thailand’s tourism revenue loss in 2020 will account for 6% of its GDP. If the tourism industry cannot recover from September, the losses will be even more severe. The Minister of Tourism and Sports of Thailand stated that if Thailand still does not open its doors to welcome foreign tourists by the end of this year, it is expected that about 60% of the hotels nationwide will close down, and the expected foreign tourist tourism market may lose more than 60%.

The situation in Japan is also not optimistic. Since 2003, Japan has continuously increased its investment in publicity to attract tourists from various countries around the tourism business, and China is one of its important source countries. Under the influence of the epidemic, losses in Japan’s tourism-related industries may exceed US$22.4 billion, accounting for approximately 0.45% of Japan’s 2019 GDP.

In addition, the epidemic has caused considerable losses to the tourism industries of South Korea, the Philippines, Vietnam, Cambodia and other countries that Chinese tourists are keen on. Among them, South Korea’s duty-free business suffered the most. Chinese tourists have always been the main purchasers of Korean duty-free goods. Data show that in 2018 alone, Chinese consumption accounted for 73.42% of Korea’s total tax-free sales. After the outbreak, the Korean duty-free market has also been hit hard. In March, the domestic duty-free shop traffic was only 588,000, a year-on-year decrease of 85.7%. In April, duty-free shop sales fell by 90% year-on-year.

According to the latest data released by the Department of Tourism of the Philippines, from January to July, about 1.32 million foreign tourists visited the Philippines, a year-on-year decrease of 73%. Inbound tourism revenue fell from 5.84 billion US dollars to 1.66 billion US dollars, a decline of 72%.

Although from the perspective of the global epidemic situation, Asia is recognized as a relatively successful region for epidemic prevention. However, due to the complexity of the virus, multiple countries in Asia, including China, have recently experienced repeated epidemics. On the one hand, it is the pressure of epidemic prevention and control, and on the other hand, the huge pressure of tourism income facing a cliff-like decline. How to balance the relationship between the two and find a way to restart the tourism business as soon as possible has become a difficult problem that all countries are trying to explore.

2. It is difficult to restart outbound travel in the short term

In order to restart travel as soon as possible, some countries with better results in epidemic control have begun to consider opening borders between some countries and regions with a controllable epidemic and a low number of infections, instead of having to endure a 14-day quarantine at the destination. Conditions are the first to resume part of the inbound tourism business.

Take Thailand as an example. Thailand hoped to pass a bilateral agreement in June this year to allow countries such as China, Japan, South Korea, Australia and other countries with well-controlled epidemics to resume normal visits to Thailand without having to quarantine for 14 days after entry. However, this plan was shelved because of the second and third wave of epidemics in East Asian countries.

China has always been an important market for the Philippines, and the Philippines is looking forward to seeing Chinese tourists as soon as possible. However, health and safety are still the most important, and the Philippines predicts that the tourism market will continue to decline, which may continue into the first half of next year.

South Korea, another popular destination for Chinese tourists, is also cautiously optimistic about restarting inbound tourism in the short term. From a global perspective, South Korea’s response to the new crown epidemic can be said to be very successful. But for tourism, it is still in a difficult stage of recovery.

Some tourism experts believe that under the influence of the epidemic, the tourism industry must resume in the order of surrounding tourism, domestic tourism, and outbound tourism. The outbound tourism market will also be the order from the surrounding short-distance destinations to the long-term destination countries. Therefore, Asia will be the first region where China’s outbound travel shows signs of recovery, and it must be the destination country with the most communication with China. If Asia cannot restart tourism, tourism to destinations such as Europe, Australia and New Zealand, and the Middle East and Africa may be even more hopeless. Regardless of the destination country or the domestic outbound tourism industry, the difficulties caused by this epidemic will continue for a long time, and adequate preparations must be made.

3. Non-stop promotion and promotion in various countries from offline to online

Although the outbound travel business may face a longer-term pause status, the actions of various countries to promote their own destinations have not stopped. Internet marketing has become a new way to get in touch with Chinese tourists.

In South Korea, in order to meet the changing market needs of Chinese tourists, South Korea is launching various activities to promote tourism resources and information. In addition, the Beijing Office of Korea Tourism Development Agency also actively held various online activities such as Korea travel lectures and Korea quiz travel. Even if you can’t go to Korea, you can still experience Korean culture and scenery through online activities.

Strengthening ties with channel parties such as travel agencies and OTAs is also an important measure to maintain the Chinese market. Only if OTAs and travel agencies continue to operate, can they develop more Korean travel products after the epidemic is over.

The Philippines maintains a strong relationship with China’s travel industry partners and conducts joint online promotion activities to promote various destinations in the Philippines.

Industry insiders engaged in outbound travel business said that regardless of whether overseas destination countries are open or not, the probability that China will lift the ban on outbound travel within this year is very slim.