The reopening of China’s borders heralds a new phase of development in the world’s biggest travel market, argues Wolfgang Arlt
Few people felt jubilant enough to celebrate the fact that 2022 marked the 25th anniversary of the start of Chinese outbound tourism. In Europe, we could happily restart our business, but Chinese visitors were missing for the third year in a row.
Outbound leisure travel from China did not exist before 1997. Trips to Hong Kong and Macao were permitted for mainland Chinese from 1983 and, after 1990, trips to Singapore, Malaysia and Thailand were possible under the guise of ‘family visits’.
Business travel was also growing in importance, including to Europe. I personally organised many trips in the 1990s for German companies such as BMW and Siemens, combining a day of business talks and collection of ‘ziliao’ (printed materials to show at home as proof) and two weeks of sightseeing, with all costs paid by the European business partner.
For most Chinese, this was the first time they got the chance to see the outside world.
But in 1997, with the experience of the fall of the Berlin Wall and demands for freedom to travel in mind, the Chinese government gave in to pressure from the growing strata of newly rich Chinese and published its ‘Temporary rules on outbound travel by Chinese citizens at their own expenses’.
In 1999, China’s first Approved Destination Status (ADS) agreements with Australia and New Zealand became operational, followed in 2002 by Malta and Germany and after the SARS crisis in 2003 by most other European countries.
A period of strong but rather chaotic development followed with many Chinese restaurant owners turned unlicensed tour operators offering bad quality package tours combined with forced shopping for low prices.
The EU registered more than five million overnight stays by Chinese visitors in 2008, including close to 250,000 in the UK, with leisure travel – mostly combining several countries – becoming more important than business travel.
After 2008, the government began to support outbound tourism as it came to be seen as a ‘soft power’ tool to shape the image of China abroad positively.
By 2012, China reached the position of being the biggest international tourism source market both in terms of spending and in trips. Overnight stays both in the EU and the UK doubled between 2008 and 2012.
Chinese outbound tourism accelerated through the rest of the decade. In 2019, Chinese visitors registered 30 million overnight stays in the EU and more than two million in the UK.
Visa procedures started to be simplified or even abolished in many destinations, with the Schengen area and the UK lagging behind and starting to lose market share despite continuous growth in absolute numbers.
The market showed ongoing segmentation, with experiences and activities, more self-organised and semi-organised trips and more sophisticated demand and behaviour gaining importance. Ticking off sights at the main destinations and shopping in big package-tour groups lost the bragging power they had once provided.
The 2020s promised further good business until the virus changed the rules. After the Chinese New Year 2020 China’s borders were closed and remained so for three years.
The government’s zero-case policy postponed SARS-CoV-2 sweeping the country until November 2022, with grim consequences for a mostly under-protected population.
The unavoidable change of this policy following a wave of protests resulted in the opening of China’s borders for inbound travel ahead of the start of the Year of the Water Rabbit on January 22, 2023.
The restart of outbound travel, which was announced without a fixed date, will require passports to be issued again, the visa departments of European consulates in China to be re-staffed and airlines to reintroduce flights and make these more affordable.
Until the pandemic subsides in China many destinations will require a negative Covid test either before departure or on arrival. However, this does not constitute a major hurdle. The Chinese have become world champions in Covid-19 testing.
Chinese outbound travellers will be back in force, with leisure tourists not far behind business, education, health and VFR travellers, but they will have new demands and expectations.
The trends of the late 2010s will continue, supplemented by more family travel, more outdoor activities, more interest in places visited by few Chinese tourists and a greater focus on sustainability as well as on value for money.
Service providers and destinations need an updated China strategy to prepare customised offers for specific market segments. New opportunities will arise for many smaller destinations and special-interest service providers.
In China, everything happens later but faster.
Prof Wolfgang Georg Arlt is the founder and chief executive of the China Outbound Tourism Research Institute (COTRI) in Hamburg. He is poised to publish, with co-author Gary Bowerman, an e-book ‘88 Practical Ways to Prepare for the New Wave of Chinese Outbound Tourists’