China released “10 new measures” in response to Covid on December 7, 2022. Some measures hit like a bomb: infection cases with mild or no symptoms were allowed to stay at home in self-controlled quarantine; the frequency of nucleic acid testing was reduced; Covid testing requirements were eliminated for most public facilities. These measures show that China has finally relaxed its covid prevention policy.
The relaxed policy immediately boosted domestic tourism. Over the past three years, tourism-related businesses such as airlines, hotels and tourist destinations had been struggling to breathe their last. Now they seem to be coming back to life. Let’s take a look at the revival of these industries.
The search volume for air and rail tickets increases rapidly. After the measures were published, the instant search volume for air tickets on the Ctrip platform increased by 160% and for train tickets on Tongcheng Travel by 276%. According to Qunar, the volume of instant searches for airline tickets, which comes into effect during the Spring Festival, has recovered to pre-epidemic levels.
The burgeoning desire to travel is also reflected in the number of actual flights. According to China Eastern Airlines, the total number of domestic flights reached 1,379 on December 12, up more than 150% from 543 domestic flights on December 1. On December 12, 140,000 passengers were carried, up nearly 140% from the beginning of the month.
Although the growing number of passengers is pleasing airlines, the decline in ticket prices is below expectations. The average order price for future flights fell 11% in Dec. 12 compared with Dec. 15-Dec. 8, according to the Ctrip platform. Qunar’s data also shows that the average order price dropped from RMB 701 on Nov. 30 to RMB 533 on Dec. 15. Tang, the expert, attributes the lower prices to the imbalance between supply and demand: the speed at which airlines are expanding capacity is much higher than the speed at which passenger flow is recovering.
The desire to travel is fueled by the upcoming New Year’s holiday (December 31st 2022 until January 2nd 2023). According to reports from some major online travel agencies, the proportion of cross-province travel on Chinese New Year’s holiday is nearly 60%, 34% higher than last year’s New Year’s Day in 2022.
Hainan Province is particularly popular among inter-provincial destinations in China because of its subtropical landscapes. Data shows that the most popular domestic route is Beijing-Sanya (Hainan Province) during the New Year holiday. An employee of a five-star hotel in Sanya told reporters that the hotel’s occupancy rate has reached 80% and the passenger flow is mainly from first-tier cities such as Beijing, Shanghai and Guangzhou.
Why is Sanya the most popular destination? The warmth could be one reason. According to Ctrip Hotels’ report, hotel bookings near hot springs on New Year’s Day 2023 are expected to increase by 5% year-on-year. Among them, hotels with their own hot springs will be more popular.
But not everyone prefers the warmth in winter. Skiing is also a popular activity. According to the Ctrip platform, the post-90s generation is the main driver of skiing – almost 70% of consumers belong to the post-90s generation.
While Chinese domestic tourism is recovering, outbound tourism also seems to be picking up. On Dec. 27, China announced it would lift the quarantine on international arrivals and allow Chinese nationals to leave the country again. Chinese outbound tourism is expected to usher in an increasing wave.