Chinese outbound travel recovery lags due to costs

Recovery is fading as rising costs and difficulties in securing visas cement a preference for local and short-haul destinations

The delayed return of China's outbound travelers to pre-COVID levels is impacting travel-related companies, hotels and retailers worldwide. These travelers were previously the world's largest spenders on international tourism and airlines.

Key takeaways

• Eighteen months after China lifted its strict zero-COVID policy and reopened its borders, the recovery in outbound travel is not meeting market expectations. Instead, there's been a notable increase in domestic travel by Chinese travelers;
• A prolonged real estate crisis, high unemployment and a gloomy economic outlook in the world's second-largest economy have made Chinese consumers more frugal since the pandemic. This has led to discount wars on various products, including travel, cars, coffee and clothing;
• This slow recovery in Chinese outbound travel is problematic for countries such as France, Australia and the United States, which were top destinations for Chinese tourists before the pandemic;
• However, international travel is on the rebound. Last year, Chinese travelers regained their position as the world's top international tourism spenders after falling behind the United States in 2022, according to U.N. tourism data.

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