Airports in Europe and North America are buckling under the weight of the summer holiday surge. Meanwhile, China’s long-suffering tourism industry continues to struggle to keep the lights on, having never recovered since the start of the pandemic.
Chinese tourists completed 3.2 billion domestic leisure trips last year — a little over half the number in 2019. Figures from the first quarter of this year paint an even more dire picture for the industry.
This week, The Wire looks at the state of China’s tourism industry: why it’s struggled during the pandemic and questionable hopes for its recovery.
HARD LANDING
Tourism within China is a huge business: At its peak in 2019, the domestic industry generated revenue of $745 billion, according to data from the Ministry of Culture and Tourism. More than half of that revenue was wiped out in 2020, the first year of the pandemic. Turnover improved slightly last year, but remained down 40 percent from its pre-pandemic high.
Provinces vary in their tourism numbers: figures for organized tours show that the wealthiest provinces like Zhejiang, home of lakeside metropolis Hangzhou, and Jiangsu, home of Suzhou and its renowned gardens, are both major dispatchers and receivers of tourists. Others, including the southern provinces of Guizhou and Hainan, take in more tourists than they send out.
In the last two years, China’s travel agencies have fared especially poorly. Early figures from the first quarter of 2022 show that they collectively arranged 84 percent fewer trips compared with the same period in 2019. That’s almost as steep a decline as in early 2020, during the initial outbreak of the coronavirus in Wuhan.
Bluntly imposed travel restrictions are one reason why Chinese travel is so depressed: for months, the tourism ministry blocked package tours — the industry’s most profitable service — from traveling to provinces experiencing Covid outbreaks, even if they were contained within smaller localities.
Onerous quarantine periods and cumbersome Covid testing demands have discouraged other independent travelers from going far. Instead, interest in camping has flourished, as families look for simpler getaway opportunities closer to home. That is little consolation for firms like Trip.com (formerly known as Ctrip), however, which make most of their money from hotel and ticket commissions. The travel booking platform has posted two successive years of net losses and its stock is trading 45 percent below its 2019 high.1Ctrip acquired the U.S. company Trip.com and then the Shanghai-based company renamed its global brand website Trip.com
Other platforms have fared worse: in May, Airbnb announced that it was permanently shutting its China business. The San Francisco-based firm had long struggled to gain a foothold in the country, with China accounting for less than one percent of company revenue.
RECOVERY GLIMMERS
Recent policy tweaks announced by the authorities have been aimed at aiding a tourism recovery. In June, the tourism ministry announced that curbs on package tours would be based on the risk levels of destination cities, instead of provincial-wide bans.
Soon after, the government announced a minor update to the country’s mandatory travel code app (行程卡), removing an feature on individuals’ records that used to highlight travel histories to Covid-affected cities. That change, along with the lowering of mandatory quarantine times for overseas arrivals from 21 days to 10, briefly sparked an uptick in travel inquiries.
But hopes for a sustained recovery of the tourism industry may be short lived. Just as parts of the country including Shanghai seemed to be coming over the hill of the last round of restrictions, the emergence of the BA.5 variant in China has sent new parts of the country into lockdown. The industry’s woes are expected to drag on.
Eliot Chen is a Toronto-based staff writer at The Wire. Previously, he was a researcher at the Center for Strategic and International Studies’ Human Rights Initiative and MacroPolo. @eliotcxchen