China is the largest travel market in Asia and the second largest in the world.
Its spendthrift tourists make it a coveted market for destinations around the world, while the domestic market continues to expand and diversify in this continent-sized country.
Since the emergence of COVID-19 in Wuhan in January 2020, China’s “Dynamic COVID-Zero” policy has halted inbound and outbound travel.
The travel industry has focused on a vibrant domestic sector, but frequent city closures have diluted travel activity in 2020 and 2021. These control measures intensified in the first half of 2022, including a closure of Shanghai two months and strict restrictions in Beijing.
According to Phocuswright’s China Travel Market Report 2021-25, a reduction in the mandatory quarantine period on arrival from 14 days to seven days (plus three days of self-isolation at home) announced at the end of June 2022 has triggered a wave online travel research. More international flights are expected to take off and land in the second half of 2022 as destinations around the world look forward to welcoming returning Chinese visitors.
But COVID abruptly interrupted more than a decade of steady expansion in China’s travel market. The sale of overseas tours by travel agents was banned by the government in January 2020 and the blockage is still in place.
Independent overseas travel is officially discouraged with few infrequent and expensive international flights remaining open and a mandatory state quarantine upon return to China. In May 2022, the government advised against all travel abroad. And entering China as a foreign visitor remains difficult without a residence or work visa.
With international travel banned, travelers and travel providers have turned inward. Domestic travel to experience China has become the only option available.
Chinese travelers made 2.8 billion domestic trips in 2020, down 52% from 2019. A partial rebound in 2021 resulted in around 3.3 billion trips, but this still represented a 46% shortfall compared to compared to 2019.
As a result, total gross bookings increased from $173.5 billion in 2019 to $117.1 billion in 2020. Marginal growth in gross bookings in 2022 to $136.5 billion will depend on a sharp increase in domestic travel activity in the second half of the year.
Other notable developments uncovered by the research include:
- China’s “dynamic zero COVID” policy clouds the timeline for rebuilding international travel. If outbound travel picks up in 2023, gross bookings of $182 billion in 2024 would surpass the 2019 level.
- China is a mobile first nation and digital commerce is common across all demographic groups. Online bookings will drive the travel recovery, rising from 66% of total revenue in 2021 to 73% in 2025.
- Mobile’s share of gross online bookings is expected to rise to 88% in 2025 from 80% in 2019.
- As 5G accessibility expands and new cutting-edge smartphone technologies are launched, online travel agency mobile bookings will accelerate to a forecast of $76 billion in 2025.
The report also includes detailed data for each sector – air, hotel/accommodation, car rental and rail – and data on the role of OTAs and intermediaries in China.
China Travel Market Report 2021-2025
This report provides a comprehensive view of the China travel market, including detailed market size and projections, distribution trends, analysis of major travel segments, key developments and more.