| 24 May 2024, Friday |

Asia tourism reopens, but travel restrictions keep big-spending Chinese at home

Asia’s gradual relaxation of international travel restrictions is providing welcome relief to the region’s hard-hit tourism operators, who are gradually opening up to visitors from all over the world – with one major exception.

China, previously the world’s largest outbound tourism market, has kept international air capacity at only 2% of pre-pandemic levels and has yet to relax tight travel restrictions as it maintains a zero-tolerance policy for Covid-19.

This has created a $255 billion annual spending gap in the global tourism market, which operators like Thailand’s Laguna Phuket are attempting to fill.

According to Managing Director Ravi Chandran, Laguna Phuket’s five resorts have shifted their marketing focus to Europe, the United States, and the United Arab Emirates to compensate for the loss of Chinese visitors, who accounted for 25% to 30% of its pre-Covid-19 business.

“We haven’t done much marketing or promotion in China up to now… because we don’t see anything coming our way,” Mr Chandran explained.

According to tourism ministry data, the pandemic has cost Thailand an estimated $50 billion in tourism revenue per year, with Chinese tourists spending more than the average.

Thailand hopes to receive 180,000 foreign tourists this year, a fraction of the approximately 40 million it received in 2019, after opening places other than Phuket to tourists on Monday.

Many experts believe China will maintain stringent measures, such as a three-week quarantine for those returning home, until at least the second quarter of next year, and may only gradually open on a country-by-country basis after that.

“Destinations must identify new source markets and learn how to market and cater to different cultures,” said Liz Ortiguera, chief executive of the Pacific Asia Travel Association, citing the Maldives as a rare example of a successful pivot during the pandemic.

The Indian Ocean chain of islands promoted itself aggressively at trade shows, attracting more Russian and Indian visitors to its luxury resorts and sparkling waters.

Prior to the pandemic, China was the Maldives’ most important source of tourists, but overall arrivals fell 12% in the first nine months of 2021 compared to the same period in 2019.

ForwardKeys estimates that Chinese outbound travel will not recover to pre-pandemic levels until 2025. This will also force airlines to rethink their routes, as data shows that 38% of Chinese tourists flew on foreign carriers in 2019.

Despite the fact that Singapore, Thailand, and Indonesia’s Bali are gradually opening up to international travelers, Thai Airways and Garuda Indonesia are drastically shrinking their fleets as part of restructuring plans due to a lack of Chinese tourists.

When China does open its borders, industry surveys show that many people are hesitant to travel internationally because of Covid-19 fears.

Domestic tourism to Hainan Island, which now offers duty-free shopping, has also increased, posing a threat to future visits to nearby destinations such as Hong Kong and South Korea.

“I honestly don’t have much enthusiasm for international travel,” admitted Kat Qi, 29, a researcher in Beijing who traveled to Southeast Asia and the United Kingdom prior to the pandemic. “A lot of the places I wanted to go are in less developed countries with beautiful natural scenery, and they tend to be the least vaccinated.”

Her preference for natural scenery is also reflected in surveys of Chinese tourists. Many people are interested in the outdoors at a time when domestic camping vacations are becoming popular, and tourism operators will need to adapt accordingly, according to experts.

“The market will have changed, so Chinese people traveling in 2022 will be different than Chinese people traveling in 2019,” said Wolfgang Georg Arlt, CEO of the China Outbound Tourism Research Institute. “I believe that the trend of shopping and rushing around will fade.”

Large group tours, which have also declined in popularity on domestic trips, may become obsolete, to be replaced by independent travel and smaller customised tours with family and friends, according to Sienna Parulis-Cook, director of marketing and communications at marketing firm Dragon Trail International.


  • Reuters