Latest Chinese travel data highlights shifts in domestic market and consumer sentiment trends

27 April, 2022

The huge size of China’s domestic market and the fast-expanding outbound international flows pre-pandemic meant that when it comes to travel, when China sneezes the rest of the world catches a cold. Now, as parts of Asia start following the rest of the world out of the border restrictions that weighed heavily on international travel over the past couple of years, China’s strong preventive action to continue to limit the spread of COVID-19 nationally, still limits regional and global recovery figures.  

The recent lockdown of one of China’s most important financial centres: Shanghai and calls from local authorities for Beijing residents to stay at home ahead of the popular May holiday does not present a favourable picture.

Short-term prospects may not be optimistic, but there is brighter long-term outlook

But while short-term prospects are not optimistic, “there are shifts in consumer sentiment that offer a brighter outlook for the long-term,” according to Dragon Trail International’s director of marketing and communications, Sienna Parulis-Cook. The company’s Spring 2022 Chinese Traveller Sentiment Survey shows an increase in Chinese consumers who say they’re “eager to travel”, as well as improved safety perceptions for international destinations the world over.

According to ForwardKeys’ China market expert, Nan Dai, while forward bookings for domestic travel in the upcoming Labour Day holiday “may be distressing and depressing” at 92% behind the same period last year, there are some valuable insights that should put some luxury brands and destinations at ease.

Tier-2 airports recover quicker than Tier-1 gateways

With Shanghai in lockdown and Beijing residents told to stay put for the Labour Day holiday, the two biggest source markets for domestic travel may make travel professionals feel uneasy. However, latest air ticketing data from ForwardKeys shows that the travel recovery from tier-2 cities is outperforming tier-1 cities and has been since 2021.

In 2021, the main gateway cities to China – and those that have a greater proportion of international travel – serving Beijing, Shanghai and Guangzhou recovered to 59% of the pre-pandemic level, with Beijing Capital International reaching only 47% of 2019’s level, Shanghai Hongqiao reaching 75%, Guangzhou Baiyun at 66%, and Shanghai Pudong at 58%.

These were easily surpassed by non-tier-1 cities: Chengdu, with 82% recovery and Xi’an with 75% recovery. Chongqing and Hangzhou also recovered to 88% and 79% of previous levels. Another interesting trend occurred from the ForwardKeys data is that the non-hub airports increased their shares of seat capacity by around 10% in 2021.

International traffic set to strengthen in many tier-2 cities

China has recently started a trial to reduce quarantine from 14 days to 10 days for international arrivals to eight key cities for a month long period from 11-Apr-2022 to 08-May-2022. The selected gateways are Shanghai, Guangzhou, Chengdu, Dalian, Suzhou, Ningbo, Qingdao, and Xiamen.

According to Dragon Trail’s latest research, quarantine is the biggest obstacle to outbound travel, with 46% of respondents saying they would consider outbound travel when there is no longer any need to quarantine on either end of the trip.

Notably, compared to a previous survey in Sep-2021, those wishing quarantine to be stricter have dropped from 36% to now 28%. Instead, those preferring that it stays the same have grown from 28% to 32%.

Hainan demand has slumped, but premium demand is growing

With international travel restricted, Hainan – dubbed China’s Hawaii – had become an increasingly popular destination for domestic travellers. However, a slump in tourism has persisted into 2022 because of wider COVID-related curbs on inter-province travel, lockdowns and endless mass testing.

Interestingly though, when examining the booking patterns for travel to Hainan, travellers flying in premium classes were up by +2% in Q1 2022 compared to last year, while Economy class bookings are down by -3%.

“If we break down the performance for its top source markets, Beijing and Shenzhen were the top markets for premium cabins. However, affluent travellers from Chengdu jumped to the third position, with significant growth of +74%,” identifies Ms Dai.

While more than a quarter of respondents in Dragon Trail’s survey said that shopping was a reason to visit Hainan, this was not the main motivation for most travellers. More than half (57%) said their reason for visiting would be relaxing on the beach, with 51% choosing water sports, 42% choosing romance, and 27% seeing the island as a family holiday destination.

China is resilient market and late booking trend will push up traffic

While this Labour Day holiday period may not show great signs of promise with forward bookings currently down, the pandemic has shown that the local tourism market in China is resilient and that last-minute bookings have become a new trend. “Most bookings these days are made less than four days before departure,” explains Ms Dai.

“Even more promising in China is the growing importance Tier-2 airports are having for domestic and international travel. In 2021, we have even seen several designer fashion brands open flagship stores at once-deemed rural airports,” she adds.

There are improved perceptions among Chinese for outbound destinations

In its survey, Dragon Trail asked respondents to rank the safety of 15 outbound destinations. Except for Hong Kong, travellers’ perceptions of outbound destinations as being “unsafe” have decreased across the board, with increasing numbers categorising the destinations either as “safe” or “unsure”.

Japan saw the most significant increase in safety perception. Even the US – which has ranked as most “unsafe” in all of Dragon Trail’s sentiment surveys – has seen an improvement, but still only 7% categorise it as “safe,” compared to 69% as “unsafe.” However, six months earlier, 87% had said the US was “unsafe”. As in previous surveys, Singapore was ranked as the safest destination beyond Greater China.

“It’s heartening to see that while other countries around the world are dropping Covid restrictions and opening to international travel, this is not negatively affecting their perception by Chinese travellers,” says

Ms Parulis-Cook.