Here’s what needs to change as Chinese tourists return

TRAVELLERS from China are projected to take 110 million international trips this year, according to the China Outbound Tourism Research Institute.

This is two-thirds of the 170 million trips taken by the East Asian country’s travellers in 2019, when they contributed US$253 billion to the global economy.

Before the Covid-19 pandemic, China was the world’s largest source of outbound tourists. The return of Chinese travellers is an economic boost that the global tourism and retail sectors have been missing. More than half of those polled in a December 2022 sentiment survey by Dragon Trail International said they would be ready to travel as soon as restrictions were removed.

The data and marketing agency’s survey also found that 32 per cent of respondents planned to travel within two years. More than half indicated that they planned to spend more on travel in 2023 than they did before Covid.

But destinations hoping to cash in again will need to take a fresh approach that speaks to the Chinese traveller who has spent three years away from the world.

“The Chinese outbound tourist will not be the same as they were before; you have to prepare and adapt for that,” said Wolfgang Georg Arlt, chief executive of Cotri, which provides consulting and training on the Chinese outbound market.

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“We have changed; China has changed.”

There is still time to prepare. Chinese tourists are not expected to travel far in large numbers until the second half of 2023. A ban on group tour package sales in China, enacted early in the pandemic, has yet to be lifted. Prices are up – way up. Visa processing will be a bottleneck, because foreign consulates have reduced staff numbers.

Major airlines will also need time to resume flights. Chinese state television reported that the country’s airlines – and those from the US – have applied to resume up to 700 flights per week from 34 countries.

Mike Arnot, a spokesperson for aviation analytics company Cirium, said: “There may be pent-up demand that drives more flights, but the schedules into April and beyond are still quite speculative at this moment.”

Until global tourism’s biggest market returns in full force, here are five major adjustments that destinations and brands will need to consider.

One mistake that will prove costly to destinations and businesses is to cling to the dated perception that all Chinese tourists are the same.

“Any answer to the question, ‘What are the Chinese people doing?’ is wrong,” said Cotri’s Arlt.  

Sienna Parulis-Cook, director of communications at Dragon Trail, agreed that the travel industry should better prepare for understanding that China’s outbound travel market is not monolithic. “It’s very segmented,” she said, adding that the first wave of long-haul travellers in 2023 would be experienced independent travellers, including millennials, Gen-Z and luxury travellers.

While some will visit neighbouring Asian countries because they are easy to get to, inexpensive and familiar, others will seek new destinations. Arlt noted that “the game is no longer to go where everybody goes, but to discover and find new places that not so many Chinese have visited before”.

Directly related to increasing market segmentation is a diminished role for mass tourism. It will not disappear entirely, but big-group sightseeing tours would probably appeal only to Chinese travellers from smaller cities with no prior travel experiences, said Arlt.

He added that residents from China’s largest cities would not be impressed with the “big tour” approach.

“They’ve had three years’ time to dream about places and read up and talk to people – and look on (Chinese travel planning sites) Mafengwo or Qyer for ideas on where to go.” 

Chinese social media platform Xiaohongshu has been increasingly tied up with tourism trends for the younger market. It has 200 million active users with disposable income, mostly women aged between 18 and 35.

“It’s aspirational – a little bit like Instagram, but luxury,” said Dragon Trail’s Parulis-Cook. 

Livestreaming, while not new in China, has also emerged as a trend in tourism marketing, she added, so showing life in prospective destinations would prove useful. Nearly two-thirds of Chinese travellers surveyed by Dragon Trail said their top two reasons to travel abroad were to experience local food and local life.

For less-travelled destinations, this presents an opportunity. For example, Papua New Guinea is working with Cotri to attract Chinese travellers interested in niche local experiences. Arlt said his company was also in talks with Canada to create a “First Nations” programme targeting the Chinese market.

“All this is moving towards special-interest tourism – smaller groups with a higher spending.”

Destination safety ranked second in importance for Chinese travellers, with 63 per cent prioritising it, according to Dragon Trail.

This is not surprising, given the horrific wave of anti-Asian hate attacks around the world, including in Brazil, Canada, Italy, New Zealand and the US. Safety will be critical for the first wave of independent travellers from China, before mass tours resume. (Mass tours would at least offer a higher feeling of security in a crowd.)

Dragon Trail noted that more than two-thirds of Chinese travellers considered the US to be the least safe destination to visit as at December 2022. Other bottom-rankers in the survey included Chile, Israel, Spain, Peru and the UK.

“Chinese people are very sensitive if they are welcomed or not, because they see themselves not as Mr Lee or Mrs Wong but as Chinese – and what you do to them, you do to the Chinese,” said Arlt.

Even a slight perception that Chinese travellers could be subjected to racial abuse and treated badly because they are Chinese would have consequences, he added. Chinese visits to the US dropped by close to 11 per cent from 2017 to 2019 during the Trump administration, which was hostile towards China.

Hotel managers will have to be conscious about training frontline workers to receive Chinese travellers after such a long pause. But Arlt flagged that the average resident’s attitude towards Chinese people will be more critical now.

Tourism boards know to lay out the welcome carpet, but they will also have to do more marketing and education to improve general host perceptions. They will also need to communicate that they are happy to have Chinese visitors back, and factor in ways to prevent incidents.

Noting that this would be an “important moment”, Dragon Trail’s Parulis-Cook said “this is really a chance to make a new first impression”, adding that “those first travellers’ experiences may have more influence on the travellers that come after them”.

Before the pandemic, bragging about big spending was considered impressive, Arlt said. But what’s deemed impressive now is spending on experiences and learning by having done something, not merely flashing wealth. Value for money has become important to Chinese travellers, especially considering the increased costs of travel, and the absence of discounted tour packages.

Previously popular destinations such as Los Angeles in California are receiving a much greater percentage of families travelling with multiple children, as well as a shift in demand from millennials and Gen-Z, such as groups of friends planning independent travel.

Adam Burke, chief executive of the Los Angeles Tourism & Convention Board (LATCB), said: “What they’re looking for is the authentic Los Angeles.” He added that travellers look at what a local would do, and seek to explore the city’s neighbourhoods in much more detail. 

Travellers from China have also shown a greater willingness to pay more for greener choices than their European and American counterparts. According to Dragon Trail’s survey, 88 per cent of Chinese travellers said they cared about their impact on destinations and communities when travelling.

The survey further revealed that for most Chinese travellers, sustainability could mean selecting a hotel with environmentally-friendly practices such as water conservation and waste reduction. It could also mean cycling instead of driving, supporting activities that help to preserve disappearing local cultures, as well as choosing cruelty-free ways to see animals.

Covid testing is no issue for the Chinese, who are used to it. But simplifying the visa process – providing an e-visa, a visa on arrival or requiring none at all – would attract more Chinese travellers. Convenience ranked as the third most important factor in the Dragon Trail survey. 

This makes destinations such as Ecuador, Jordan, Qatar, Turkey and the United Arab Emirates, among others, well-positioned to receive Chinese visitors in 2023. Japan and South Korea, which were popular destinations among Chinese travellers, are now in a pickle for having imposed severe entry restrictions for those entering from China. China has retaliated against this with visitor visa bans.

“The visa wait times are going to be the single greatest impediment to the recovery of Chinese visitation to the US,” said the LATCB’s Burke. He also sits on the US Travel Association’s board, and was just named to the Department of Commerce’s US travel and tourism advisory board.

Despite the view that the US is viewed as the least safe destination for Chinese travellers, America’s brand remains strong. Searches from China about visiting the US were among the highest in January, according to online travel agency Trip.com.

This was in spite of the average waiting time for a visa being about 400 days for non-waiver countries, including China, Burke said. The Visitor Visa Waiver Reduction Act was introduced in October 2022, demanding that the State Department lay out specific steps being taken to reduce the waiting time.

Still, as long as immigration and other entry impediments remain, Chinese travellers may choose to steer clear of those destinations.

“One thing is the convenience,” said Dragon Trail’s Parulis-Cook, “and one thing is the feeling of friendliness and welcome.” BLOOMBERG