Chinese tourists continue to stay close to home

Analysts are now adopting a more realistic view, revising their overly optimistic predictions of a sharp increase in Chinese overseas travel after Covid restrictions ease

Demand for travel outside of China is so low that many services have been cut, from flight routes to excursions at the famous sights and shopping districts of cities like Paris, Rome, and New York - where throngs of Chinese used to roam in hordes, spending $255 billion in 2019, and becoming a lucrative cohort internationally. All that changed during Covid, and it has yet to recover.

Key takeaways

• “Non-domestic demand resumption remains uncertain,” Morgan Stanley analysts wrote last month. “It may take longer than expected for demand to recover from 70-80% of pre-Covid levels;”
• For the small number of Chinese who are traveling abroad, Asian countries are the main beneficiaries. Most outbound flights from China this month were to South Korea, but seat capacity was still 22% lower than in the same period in 2019;
• Time will tell if the visa moves by many countries affect travel, but Chinese consumer sentiment has repeatedly disappointed over the past year, with large numbers saving for what they see as an uncertain future.

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