China's Outbound Tourism Development Annual Report (2022-2023)
An “Annual Report on the Development of China’s Outbound Tourism (2022-2023)”has been released on 11th December 2022, by Hong Kong, Macao and Taiwan Research Institute of China Tourism Academy.
The report pointed out that the epidemic has a long-term impact on the recovery of international tourism, and the recovery process of China’s outbound tourism market is slower than that of the Asia-Pacific region and that of Europe and the United States. The tourist source structure and recovery process of neighbouring countries have been significantly affected, and the main players in the outbound tourism market are also facing a development crisis. From the demand side, the potential consumption preferences of outbound tourism have changed significantly. Although safety demands remain high, tourists’ confidence in traveling has begun to recover rapidly, and value for money of tourism products has attracted the most attention from tourists. From the perspective of the supply side, under the pressure of the epidemic, outbound enterprises “turned domestic” and “expanded abroad” to seek vitality. Some have shifted from “outbound” to “domestic”, fully integrating internal and external resources. Some have been actively opening up new international markets. As the epidemic prevention and control becomes more precise, the border controls of major outbound destinations are generally relaxed, and destination marketing becomes more frequent, it is necessary to actively plan the recovery process of outbound tourism from now on.
Review of 2021-2022 Outbound tourism development
According to comprehensive calculations by the research group, comparing with the 2019 data, the cumulative number of outbound tourists from China has decreased by more than 400 million, and the cumulative overseas consumption expenditure of outbound tourists has shrunk between US$340 billion and US$430 billion. Travel agencies’ outbound tourism operating income has decreased by about 600 billion yuan, and outbound tourism operating profits have decreased by about 26 billion yuan. In 2021, the outbound tourism operating profit of China’s travel agencies were negative for the first time, and the proportion of outbound tourism operating income in the total tourism operating income of travel agencies dropped from 30.20% in 2019 to 0.36% in 2021. All major outbound tourism destinations have been severely affected, but they still maintain confidence in the future development of the Chinese market.
In 2021, the number of outbound tourists from China was nearly 26 million, a decrease of 83% compared with 2019. It is estimated that the number of outbound tourists in 2022 will be basically the same as that in 2021, at a level of 26 million to 30 million, and the degree of recovery will still be less than 20% of the level before the epidemic, which is also significantly different from the world average recovery level. According to the research team’s calculations, the development trend of outbound tourism will change from basically stagnant to slow growth in 2023.
Since the outbreak of the epidemic, the spatial distribution structure of Chinese outbound tourism in intercontinental destinations has remained stable, and the order from high to low was still Asia, Europe, America, and Oceania.
Compared with 2019, the main tourist destinations where the number of Chinese tourist arrivals dropped by more than 90% in 2020 include Russia, Myanmar, the Philippines, the United States, Vietnam, Malaysia, Japan, South Korea, Singapore and Indonesia. In 2021, the situation of China’s major outbound tourism destinations remained extremely low. Except for Macau, there had been basically no large-scale Chinese tourists visiting other major outbound destinations.
Corresponding to the stagnation of the market is the difficult situation of the main players in the outbound tourism market. In 2021, the proportion of travel agencies’ outbound tourism revenue in total tourism revenue has dropped from more than 30% in 2019 to less than 0.5%.
Travel confidence is recovering. The cost performance is expected to rise
Tourist confidence is recovering, with the confidence to travel further afield.
The survey results show that among the respondents, most of the outbound tourism destinations they expect to choose are Europe, America, East Asia, Hong Kong, Macao and Taiwan, which has changed significantly from 2021. Long haul destinations have begun to enter the respondents’ field of vision, and even become a priority option, reflecting that tourists’ confidence is recovering at an accelerated pace, and they are confident to travel to more distant destinations. Compared with 2021, Europe and the United States have jumped to the first place as outbound tourism destinations, surpassing Southeast Asia, Hong Kong, Macao and Taiwan. The proportion of respondents who choose Europe and the United States as their outbound travel destination has increased by 26% compared with 2021.
The cost performance has become the most important factor for respondents. The factors that the respondents pay more attention to when traveling are ranked from high to low: “value for money”, “hygienic conditions”, “richness of tourism products”, “personal safety”, “convenience of shopping”, “local cultural characteristics”. Compared with the previous year, in 2022, “the cost performance of tourism products” has become the most important factor for respondents. This shows that the respondents have a more rational understanding of the epidemic and have more confidence in the safety and security of the destination. It also shows that the economic environment is still the main factor affecting the recovery of outbound tourism. The uncertain prospects for international economic development and the impact of the domestic epidemic on economic development have put pressure on the purchasing power and savings of respondents.
Security remains one of the top considerations for respondents. Respondents believe that the main factors affecting their outbound travel decisions are “safety hazards” and “insufficient time”, while “insufficient access channels” and “differences in living habits” are less of a reason.
In order to avoid safety risks, the proportion of “partial family travel” is higher than “whole family travel together”.
The choice of outbound tourism activities has changed from sightseeing to in-depth experience, and healthy food and well-being. “Participatory entertainment” is the most popular tourism activity that respondents hope to participate in when visiting abroad, and their understanding and expectations of ‘value for money’ are also related to in-depth experience.
The survey results show that among the items that the respondents are more willing to spend after going abroad, health recuperation ranks first, and the top destinations they hope to visit are “gourmet experience”. Although the survey shows that the respondents are less willing to spend, but in stark contrast, the respondents are still full of expectations for overseas travel shopping activities. Compared to the 2021 survey, “shopping experience” jumped from 2nd place in 2021 to the top this year.
Outbound tourism enterprises are actively transforming to seek vitality
Under the impact of the epidemic, many companies engaged in outbound tourism business have been in crisis. Transformation, including turning to domestic tourism, has become an inevitable choice for market players. Most outbound tourism companies turn to the existing domestic tourism market in order to survive and explore quality services to attract their previous outbound travel clients. Among the outbound tourism companies, some focus on the domestic tourism market, some use superior resources to expand business overseas, and some actively try the diversified models of “tourism +” and “+ tourism”, and more generally embrace the wave of digitalization. These explorations of the main players in the outbound tourism market are a vote of confidence for the future of outbound tourism, and they are also taking persistent actions to prepare for the inevitable recovery.
Under the realistic conditions that outbound tourism is difficult to carry out, the original demand for outbound tourism often shifts to domestic long-distance tourism or short-distance peripheral tourism, which provides an opportunity for the main body of the outbound tourism market to explore internal transfers. Taking advantage of the in-depth understanding of the needs of outbound tourists and service experience, integrating domestic and foreign tourism resources and providing satisfactory services has become the direction of action for the main body of the outbound tourism market. From the perspective of destinations, companies engaged in outbound tourism business are good at operating group tours and providing high-end customized travel services. Viewed from the perspective of tourists’ expectations, when they cannot leave the country and choose alternative products and services, they often turn their attention to high-quality holiday tourism products with unique domestic tourism resources and beautiful scenery. Serving the domestic market with quality service and product innovation has achieved good results. China Tourism Group actively develops duty-free business on outlying islands and taps the potential of the duty-free market. Duty-free sales on outlying islands have grown rapidly, and the international ranking of duty-free business has maintained its No. 1 position in the world. Mafengwo also focuses on domestic tourism and has developed a project to get on the bus on weekends. CYTS actively adjusts its business direction, cuts in from the perspective of lifestyle, puts more funds and energy on peripheral tourism business, and develops peripheral tourism markets such as self-driving and camping. Caesars Travel and Citic Travel also focus on domestic travel business, and their business scope covers the domestic market, peripheral travel market and local market.
Complement “outside” with “outside” and open up new international markets.
By developing a tourism market targeting overseas residents and overseas Chinese, activate the vitality of the body, maintain close communication with overseas partners and resource parties, feedback the outbound tourism business, and prepare for the opening of the outbound tourism business in the future. Ctrip Group and Yuanhai International Travel Group are outstanding in this regard.
2023 Outlook for the Chinese outbound tourism
The development of outbound tourism in 2022 will not only open up gradually, but also accelerate the transformation of the market. The recovery of outbound tourism in the future will be a long-term and complicated process in which the psychological expectations of outbound tourists and the actual conditions are continuously adjusted. The balance of security and attractiveness, convenience, long-distance and short-distance trade-offs will all be revealed in this process. In particular, the experience of travel relaxation in the Mainland and Macau will show more value for promotion and replication in the future. The promotion of destinations, the attractiveness of products and services, the accessibility of safety and security, and the efforts made in satisfaction will determine their position in the long-term competition in China’s outbound tourism market in the future. This is a process full of uncertainty, but also a process full of opportunities.
Development should be conducive to enhancing the spread and influence of Chinese civilization. It is necessary to actively explore the path and mode of widely disseminating socialist core values, excellent traditional Chinese culture and socialist culture with Chinese characteristics in outbound tourism activities. We must be good at drawing strength from Chinese-style modernization. China’s outbound tourism will benefit from the modernization process of a huge population and the common prosperity of all people. These favorable factors will further promote the expansion of China’s outbound tourism market and the upgrading of its industrial structure. The development of outbound tourism should serve and become an important force in the Chinese-style modernization drive. It is necessary to find entry points and footholds in terms of promotion strategies, business models, and civilized tourism, and to better combine outbound tourism with Chinese-style modernization, all of which need to be focused on in the future.
Clarify the opening path and inject more certainty into the development of outbound tourism. Summarize the experience of relaxing travel restrictions in the Mainland and Macau in a timely manner and assess the feasibility of its promotion and replication. Continue to carry out stress testing. In response to the expectations of overseas industries and measures such as opening borders and resuming flights, there must be targeted research and contingency plans, and timely responses to concerns from all parties.
Do a good job in serving market segments such as business travel, scientific research, study abroad, examinations, visiting relatives, and medical treatment.
Strengthen support for the main players in the outbound tourism market. Management departments should face up to the main difficulties faced by players in the outbound market, find out the current urgent policy needs, predict the difficulties that market players may encounter in conducting business, and form targeted assistance measures, not only timely providing relief subsidies and stabilizing It is also necessary to form a package of relief and problem-solving policies covering fund raising, maintenance of employment experience, compensation for changing careers, continuing education services, digital technology equipment, etc., and explore the provision of urgently needed services such as financing, information, law, technology, and talents. Improve the participation and “sense of gain” of market players.
Issued by China Tourism Academy
On 11th December 2022