Nearly 250 million international tourists travel; the number of international tourist arrivals in Europe has returned to nearly half of the levels in 2019; and the international tourism revenue of 16 countries, including Mexico, Croatia and Portugal, has fully recovered; And The Australian tourism industry has more than 80% more outbound than the inbound...
Despite growing economic and geopolitical conflicts, global tourism has been accelerating its recovery in the first five months of this year. However, there is always a dark cloud hanging over the sky, making it impossible for the industry's puzzle to be restored to integrity. This cloud is the absence of Chinese tourists, the biggest "financier" in the international tourism industry.
As a result, there is a loss of up to $280 billion (A$394.3 billion) in revenue in the global tourism market, and in Australia alone, there is a $12 billion tourism revenue "black hole", so who can make up for this loss? And how long will it take to fully make up?
Europe's recovery leads the world, and Australia's "one-way" rebound
According to the World Tourism Barometer released by the United Nations World Tourism Organization (UNWTO) in July, international tourism rebounded strongly in the first five months of the year, with nearly 250 million international tourists traveling, or 221% of the same period last year.
In the early morning of May 30, passengers lined up outside the terminal at Amsterdam Airport Schiphol
UnWTO believes that the recovery of European tourism is leading the world, driven by strong demand in the region and the lifting of travel restrictions by a growing number of countries. Compared to the first five months of 2021, the number of international tourist arrivals in Europe increased by 350% year-on-year and has recovered to 46% of the 2019 level!
Zurab Pololikashvili, Secretary-General of the United Nations World Tourism Organization, said: "The pace of tourism recovery in many parts of the world has accelerated, withstanding the challenges hampering its development. ”
In terms of international tourism revenue earned at destinations, 16 countries have fully recovered to pre-pandemic levels, including the Republic of Moldova, Serbia, Seychelles, Romania, North Macedonia, Saint Lucia, Bosnia and Herzegovina, Albania, Pakistan, Sudan, Turkey, Bangladesh, El Salvador, Mexico, Croatia and Portugal.
However, compared with Europe, Australia, which has rich tourism resources and advertises "Australia and the World", has a much less recovery of the industry. What is even more unexpected is that so far, the rebound data of The Australian tourism industry is "one-way", that is, there are many people who are willing to travel abroad, but there are very few foreigners who are willing to come to Australia to play.
Sydney, August 3, overlooking the Harbour Bridge from Circular Quay
According to the Australian Bureau of Statistics, the number of short trips abroad was 420,110 in May, 81% more than the 231,480 inbound short-term travel data. That's more than double the number in May 2019, when the number of outbound tourists was only 39% more than inbound.
The reason is that Peter Shelley of the Australian Tourism Export Council believes that high airfares, long visa processing time, global instability and deteriorating economy are all affecting people's confidence in tourism in the short term.
Shelley said: "Australia has always been the first choice for many travellers around the world. This has not changed, what has changed is the urgency of traveling here. ”
"With so many influencing factors at play, people's tendency to travel long distances is influenced by worries, which has led many travelers to choose to go closer to home. Our members make it clear that Europe and the United States are their current main competitors. ”
At the same time, the huge gap between the number of inbound and outbound passengers is also reflected in the load factors of major international airlines, with Emirates having 87% and 63% respectively in terms of the load factor of Australia's outbound and inbound flights in May; Qatar Airways is about 90% and 70% respectively; United Airlines was 63 percent and 56 percent, respectively.
Statistics Australia also shows that the number of international short-term visitors is currently 34 per cent before the pandemic, while the number of outbound visitors has rebounded to 45 per cent in 2019. Despite the increasing number of people traveling abroad for short periods of time, the number of inbound tourists in May decreased by 1.9% compared to April.
So, how many percent of international arrivals can return to before the pandemic this year?
In May, the UNWTO released a forward-looking vision that the number of international arrivals this year would reach 55% to 70% of pre-pandemic levels. Among them, the number of international tourists in Europe may rise to 65%-80% of the 2019 level; In the Americas, this proportion may reach 63%-76%; In Africa and the Middle East, the number of arrivals may reach 50%-70% before the pandemic; And in Asia and the Pacific, due to tougher entry restrictions, the number of arrivals will remain at 30% of the 2019 level in the best case.
In the absence of Chinese tourists, who will make up for Australia's 12 billion Australian dollar "black hole"?
At Melbourne's Princess Bridge, visitors enjoy street views from a rental carriage
China is the world's largest source of tourists and the largest source of outbound tourism consumption. Around the world, as long as there are tourists, there are Chinese, whether it is in the rich Middle East Dubai, or the poor African Rwanda, Chinese tourists to the local people feel that generous, purchasing power is very strong.
But now, against the backdrop of an accelerated recovery in global tourism, China is becoming more and more like an "island." As we all know, the current policy will have a relatively large impact on some specific industries, the most typical of which is the outbound tourism business, which has almost shown a cliff-like decline in the past two years.
The data shows that in the revenue structure of Chinese travel agencies in 2019, 47% of the revenue comes from inbound and outbound travel - and after 2020, a series of well-known companies such as Baicheng Travel Network, Tuniu, Utrust Tourism, Caesars Tourism, Peace International Travel, Nanhu International Travel, Shandong Jiahua Culture and so on have dismal performance or go bankrupt.
About 90% of the revenue comes from outbound travel, China's leading A-share tourism listed company, Utrust Tourism (002707. SZ) is a typical case, from the perspective of net profit, in 2020 and 2021, Utrust Tourism lost 1.48 billion yuan (about 309 million Australian dollars, the same below) and 460 million yuan (0.96 billion Australian dollars), and the loss is expected to be 75 million yuan to 100 million yuan (15.6675 million Australian dollars to 20.89 million Australian dollars) in the first half of this year.
According to the French Atlantic News Network, Chinese tourists are the most spending group in the world, but at present this group is unable to travel around the world, which has caused losses of up to $280 billion to the global travel market.
So, can anyone fill the revenue vacuum left by Chinese tourists?
Let's start with Australia.
The data shows that the number of inbound tourists from Australia has recovered to about 30% of 2019. Among them, tourists from India, Canada and Indonesia are filling this huge gap.
According to the Tourism and Transport Forum (TFF), a peak industry organisation for Australia's tourism, transport and aviation sector, 1.4 million Chinese tourists spent $12.2 billion in Australia in 2019, more than a quarter of all international visitors.
Now, in the six months since Australia's borders reopened, arrivals from China have only recovered to about 4% of the same period in 2019. In other words, about 24,390 Chinese short-term visa holders arrived in Australia. Under normal circumstances, however, this number should reach 664,430 people.
For Australia's international tourism industry, the most prominent recovery is in the Indian market. The number of Indian tourists entering Australia has recovered to 58% in 2019, at a healthy level. India has become the third largest source market after New Zealand and the United Kingdom.
Since Australia reopened its borders to international visitors in February, the majority of inbound travellers have been motivated by visiting family and friends (55.9 per cent) and vacations at just 17.8 per cent. The latest figure for June given by the Australian Bureau of Statistics on August 16 is that about 275,300 people with short-term visas entered Australia in the same month, 58.3% lower than in June 2019.
Now the main markets for Australian inbound tourism have changed from China, New Zealand, the United States, the United Kingdom and Japan to New Zealand, India, the United Kingdom, Singapore and the United States. Factors such as fewer Chinese tourists, rising flight costs and limited air capacity have had a negative impact on Australia's tourism industry.
Then we take a look at France, one of the fastest countries in the world for tourism recovery.
According to data from the French Tourism Development Agency (Atout France), in 2021, the number of Chinese and Japanese tourists visiting France decreased by 80% compared with 2019. The number of Asian tourists has fallen sharply, costing the luxury, hotel and winery industries dearly.
The French local media Le Progrès (Le Progrès) website reported that for tourists in Chinese mainland, in addition to passports, visas and other document problems, expensive air tickets are also prohibitive, and the cheapest round-trip ticket for Beijing-Paris flights is currently 5,000 euros (7264.5 Australian dollars), almost 10 times that of 2019. In addition, tourists need to quarantine in the hotel for seven days at their own expense, and the time cost is also huge.
Finally, let's take a look at Japan, which is closer to China.
August 6, Chiba Prefecture, deserted Isumi sightseeing railway line
On June 10 this year, Japan officially opened the entry of foreign groups of tourists, but so far it has not ushered in the expected lively scene.
According to the Japan Immigration Service, between June 10 and July 10, Japan received about 1,500 inbound tourists, a sharp drop of 95% from the same period in 2019.
According to the report, a major reason for the cold reception of inbound tourism in Japan is that its "semi-open" model has suddenly reduced the attractiveness of tourists; On the other hand, the absence of Chinese tourists also has a greater impact on Japan's tourism industry.
Official statistics show that in 2019, Chinese mainland more than 9 million tourists to Japan, making it the largest market for Japanese tourism.
"In the past, there were the most foreign tourists from China, but in the last six weeks I have seen all Japanese," said a staff member at the Tokyo Skytree.
The Recovery in China will be slower, but the way travel is moving will change dramatically
When will the door to the recovery of China's outbound tourism open? Today, it has become one of the biggest buzzwords in the industry.
Recently, Hainan Airlines, China Southern Airlines, Air China and many other domestic airlines announced the resumption of new international flight plans, and the entry quarantine time in some domestic cities is also shortening, and outbound tourism has also seen the dawn of recovery.
For example, Hainan Airlines resumed direct flights between Chongqing and Rome on June 23, the first intercontinental regular international passenger route resumed in Chongqing since 2020.
China Southern Airlines plans to resume 7 international routes from recent days, and the number of international flights will increase from the original 36 flights per week to 48 flights per week (counting 2 round-trip flights), and the number of navigable countries will increase from the original 20 to 27.
In this regard, Yang Yanfeng, director of the Online Tourism Research Center of Beijing Union University, said that the resumption of international flights of domestic airlines is a good sign. The suspension of outbound tourism business has made practitioners miserable, and the gradual recovery of international routes has also ushered in the dawn of recovery for outbound tourism.
Air China announced the resumption of international routes on August 12
At the beginning of this year, the State Council proposed "orderly resumption of inbound and outbound tourism" in the "14th Five-Year Plan" Tourism Development Plan, "We believe that the situation in Shanghai has delayed the steady recovery of international routes, but has not changed the direction of this plan." The opening of international lines will be carried out in an orderly and steady manner under the requirements of ensuring epidemic prevention. Experts believe that "in the future, the trend of international flights resuming opening up will be more obvious." ”。
In March, Huang Xihua, a deputy to the National People's Congress, a member of the Standing Committee of the Huizhou Municipal Party Committee and director of the Propaganda Department of Guangdong Province, proposed to the conference that some island countries or regions be selected to pilot outbound tourism.
According to the "14th Five-Year Plan for civil aviation development" released by the Civil Aviation Administration of China for 2022-2025, 2022 is called the "recovery period and savings period", and 2023 to 2025 is the "growth period and release period", focusing on expanding the domestic market, restoring the international market, and improving the level of opening up. In other words, from 2023 onwards, China will likely relax flight restrictions, and outbound travel and entry will slowly return to normal.
It is worth noting that countries around the world are also seeking opportunities to develop with China, hoping to promote the development of tourism between countries on both sides, and also look forward to the return of Chinese tourists.
On July 24, the 2022 China International Tourism Mart, co-sponsored by the Ministry of Culture and Tourism of China, the Civil Aviation Administration of China and the People's Government of Yunnan Province, closed in Kunming, and 71 countries and regions, including South Korea, Thailand, Malaysia, Bangladesh and Cambodia, participated in the exhibition through online and offline means.
Source: China Tourism News
Xue Manlin, deputy general manager of Beijing New World Tourism, was quoted as saying that Chinese tourists may gradually return to the outbound travel market in 2023-2024, but their travel methods will change dramatically, becoming younger, more and more educated, english-speaking, and able to travel alone in foreign countries. These tourists prefer to travel as a small family, in small groups or as a single person.
"Experiential, personalized tours are the way to go, such as meeting the chef of the restaurant, enjoying a private bespoke dinner, and talking to the owner of the castle, which is an unforgettable experience for tourists." Guy Raffour, founder of travel marketing firm Raffour Interactif, said.
Tourists taking photos in the French town of Gaude
Back in Australia, Deloitte Australia's head of tourism, Adele Labine-Romain, said: "The recovery in the Chinese market will be slow. We predict that the number of tourists from China will not be too large this year, and there will be an increase from 2023, but it will take several years to recover. ”
"I'm an optimist, and while our relationship with China is currently challenging, there are too many long-standing trade, community and family ties between the two countries that I think we'll find a solution."
(Welcome to subscribe to the headline number of the Australian Finance Network, we will continue to provide you with high-quality global macroeconomic analysis and Australian financial information)
The pictures not indicated in the article are Shutterstock, inc. authorized by Aussie.com, please do not reprint the pictures separately. The analysis, opinions or other information in this article are market commentary/general information and do not constitute trading advice and are for informational purposes only. Any forward-looking statements are not guarantees or statements of future performance and should not be placed in undue reliance. When making any investment, please consider the applicability of the information contained herein based on your personal investment purposes, financial situation or personal needs, and make prudent decisions at your own risk.