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Domestic tourism is key to China’s recovery

By GlobalData 02 Dec 2020 (Last Updated December 2nd, 2020 11:44)

Domestic tourism is key to China’s recovery

In China, there are 1.4 billion tourists that have very limited international options for travel, meaning domestic tourism has been able to thrive.

Domestic travel is the driver of Chinese tourism. Since 2015, domestic tourism has grown at an enormous compound annual growth rate (CAGR) of 10.3%, resulting in 3.1 billion domestic trips in 2019. Unsurprisingly, this puts China at the number one spot for the number of domestic trips taken globally each year.

Domestic tourism will take a hit in 2020. However, GlobalData forecasts that between 2019 and 2023, domestic trips will increase at an impressive CAGR of 7.7%. This would mean that in 2023, there would be an astonishing 4.2 billion domestic trips taken. An increase of more than two billion trips between 2015 and 2023 highlights the meteoric rise of domestic tourism in China and this form of tourism will continue to be an important pillar of the Chinese economy.

Domestic tourism will put China in a much better position to recover from Covid-19 in comparison to other countries. This has already become clear with the bounce back experienced by Chinese airlines and hotels.

Hotel-occupancy rates and number of domestic flight passengers bounced back at the end of August, and railway travel has also demonstrated a strong recovery. If Chinese tourists continue to travel domestically, it will limit the number of tourism companies with a presence in China that are unable to survive in the coming months.

Investment in infrastructure will strengthen domestic tourism

There are numerous examples of Chinese investment in infrastructure. For example, the ‘Infrastructure Development Program’ involves the construction of highways, railways, airports, waterways and related infrastructure, along with the upgrading of existing facilities.

The programme aims to improve freight efficiency, commuter travel and public transport over the next two years across China.

These kinds of projects will improve connectivity across the country and allow Chinese tourists to explore regions other than the traditional hotspot of Guangdong. This will allow tourism across the country to flourish, helping to cement China as a prime tourism destination for domestic and international tourists alike.

To supplement recovery, China plans to construct new digital infrastructure across the country, including building 5G networks, artificial intelligence, Internet of Things and intercity high-speed rail.

Investment in technology will allow Chinese tourism firms to get ahead of competitors, whilst investment in rail improves connectivity and greatens the appeal of China as a tourism destination, creating a promising future for Chinese tourism.

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