Coronavirus analysis

Will we see a post-outbreak travel boom?

Better days are coming, according to the China Outbound Tourism Research Institute, while marketing and digital strategist China Skinny predicts an “explosive” recovery of Chinese travel once COVID-19 is contained.

Once the peak of the COVID-19 outbreak is reached, the road to recovery begins.

The China Outbound Tourism Research Institute (Cotri) is projecting a +7% year-on-year increase in outbound trips from Mainland China for 2020 – albeit based on the critical assumption that from April the travel restrictions for Chinese travellers will be rescinded. In that scenario, Cotri says, 2020 will see a total of 181 million trips from Mainland China.

In a key editorial leader in a recent edition of The Cotri Weekly, Founder & Director Professor Dr. Wolfgang Georg Arlt wrote: “The majority of international, especially intercontinental, travel of Chinese is done for non-leisure purposes, for business, MICE, VFR, studies, health etc. With the 2019 n-CoV scare over [when it is -Ed], most of these international trips which had to be postponed, will be taken. Moreover, different from ‘Western’ individual consumption patterns, the leisure-based purposes will also be made up for at a later time. We could see this pattern after SARS, Avian Flu and other periods of travel restrictions, and we will see this pattern again after the 2019 n-CoV hype has ended.”

Professor Dr. Wolfgang Georg Arlt

According to Cotri Analytics, 2019 witnessed 170 million border-crossings from Mainland China, out of which 74.5 million went to Greater China (Hong Kong, Macau, Taiwan) and 95.5 million travelled beyond. The fall from 27 million to 16 million arrivals from Mainland China to Hong Kong, unrelated to the virus, in the second half of 2019 was the most important factor in the lower-than-expected total number for China’s outbound trips in 2019.

Professor Arlt wrote: “Greater China will probably see only a small increase of +3%, given the loss of day-trips which will not be taken anymore as well as the continuing political problems resulting from the Hong Kong SAR unrest and the Taiwan election results in the second half of 2019. For trips beyond Greater China an increase of +9% can be forecasted for the whole year of 2020.”

Border crossings from mainland China 2001-2020

Source: COTRI Analytics

Travel surge ahead

Marketing and digital strategist China Skinny agrees with the positive outlook, and has in fact predicted an “explosive” recovery of Chinese travel once COVID-19 is contained. This analysis is based on the travelling public’s activity following SARS in 2003, according to China Skinny Associate Marketing Manager Sheryl Shen.

She wrote: “The similarities of the virus’s severity and timing brings the all-too-infamous 2003 SARS outbreak back into memory. From April to June 2003, China’s inbound, outbound and domestic travel markets faced a challenging time.

“However, shortly after the end of the epidemic, an explosive rebound happened as Chinese consumers could finally unbottle their long-built-up passion to travel. The whole market quickly recovered as a result.

Top ten Chinese outbound destinations by number of arrivals 2019

Source: COTRI Analytics

“Similar to the current decline in travel bookings that we are witnessing due to the novel coronavirus, flight and hotel bookings experienced a significant decline during the 2003 SARS outbreak.

“Flight and hotel bookings on Ctrip in 2003 suffered a -33.4% and -25.1% decline respectively over the outbreak, compared to the same period in 2002.”

Shen said a “surprising pattern” emerged as the battle against SARS was gradually won. “What began as a strong recovery in China’s travel industry, turned into a surge in sales. In July 2003, Ctrip flight bookings saw a +200% increase in sales from the same month in 2002, a +82% increase since June 2003, and a +31% increase compared to the month right before the outbreak,” she added.

This recovery continued in the October 2003 Golden Week, the first major national holiday after SARS. In this period, flights increased +200% year-on-year. Similarly, the 2004 Chinese New Year saw travel surge +201% compared to the month before the outbreak in early 2003.

Shen continued: “The current period has been difficult and taxing on the travel operators and most other businesses, however, we can try [to] focus on some positive aspects to take from this.

Top ten destinations seeing the fastest growth in arrivals from mainland China in H2 2019

Source: COTRI Analytics

“First and foremost, these surprising statistics demonstrate Chinese consumers’ strong, positive optimism during a tough period – compounding their need and desire to travel. As we closely follow the outbreak, Beijing’s response and consumer sentiment, China Skinny believes the spring bloom after this wintery period in the China travel industry will come and a similar surge is likely.”

China Skinny has predicted that females born in the 1980s and 1990s will lead the recovery.

“China has changed dramatically in the 17 years since SARS, and tourism operators will need to play by a whole new set of rules to connect with and appeal to Chinese travellers. Understanding these changes and characteristics will help prepare operators to best take advantage of the expected surge and advocacy that will follow,” Shen concluded.

It is hoped the recovery from the novel coronavirus will be swift

The Moodie Davitt eZine

Issue 277 | 24 February 2020

The Moodie Davitt eZine is published 20 times per year by The Moodie Davitt Report (Moodie International Ltd).

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