Nicholas Spiro

The View | Crisis? What crisis? China’s domestic tourism is booming

While Southeast Asian tourism is feeling the lack of Chinese travellers, China’s domestic tourist market is a glowing picture of Chinese consumption

Fewer Chinese travellers are venturing overseas, not just because of the economic outlook, but also because of the growing appeal of domestic tourism

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Boating is just one of the attractions for tourists visiting Sanya, dubbed “China’s Hawaii”, seen here on October 1. China’s domestic tourism is going from strength to strength, as travellers put off international trips. Photo: Xinhua

Nicholas Spiro

Published: 3:30pm, 2 Oct 2023

One of the biggest sources of concern in the global economy is the weakness of domestic demand in China. The main worry is much softer-than-expected household consumption, the part of the economy that was supposed to roar back with the end of three years of self-imposed isolation.

Fears about a loss of consumer confidence, stemming mainly from the crisis in the all-important property sector, have fuelled a debate over whether China is suffering a balance sheet recession akin to the one experienced by Japan in the 1990s. Last month, the Organisation for Economic Cooperation and Development warned that a sharper downturn in China would have a more harmful effect on global growth.

Southeast Asia’s tourism industry – which relied heavily on Chinese travellers before the pandemic erupted – has already suffered. In Thailand, Chinese tourist arrivals have totalled just 2.3 million so far this year, significantly below the government’s initial full-year target of 5-7 million and a far cry from the 11 million it welcomed in 2019.

According to global travel data provider OAG, scheduled seat capacity on international flights to and from mainland China last month was 46 per cent lower than its level in September 2019. International travel accounted for just 6.1 per cent of Chinese airline capacity, down from 12.3 per cent four years ago.

China’s domestic tourist market is a different story altogether, one that paints a decidedly positive picture of post-Covid-19 Chinese consumption. Seat capacity on domestic flights last month was almost 15 per cent higher than in September 2019, data from OAG shows.

Indeed, domestic air travel had already recovered to 2019 levels as early as August 2020, seven months after the imposition of the world’s largest mass quarantine in Wuhan. As the “golden week” holiday gets under way, the daily average number of domestic scheduled flights during the eight-day-long break is forecast to reach 15,500, 7.1 per cent higher than during the May Day holiday.