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China’s International Travel Sector Remains Slow Due to Economic Conditions

While China’s domestic air travel market is experiencing a strong recovery, international travel reportedly still faces challenges.

Factors such as economic conditions, ticket prices and visa issues contribute to the limited appetite for international travel, Bloomberg reported Thursday (Dec. 28).

China’s international recovery has been slower than expected due to soft demand, according to the report. For instance, seat capacity between China and the United States was only at 22% of 2019 levels in the week through Tuesday (Dec. 26), the report said, citing data from Morgan Stanley.

Analysts at Morgan Stanley and Bloomberg Intelligence anticipate that China’s international air travel will not fully recover until 2025, per the report. They attribute this projection to economic challenges at home, reduced inbound business sentiment, manpower constraints, capacity limitations, ticket prices, foreign exchange rates and visa issues — all of which may impact overseas travel.

Despite the challenges in international travel, air travel within China is experiencing a different story, with passenger traffic surpassing pre-pandemic levels, according to the report. In the third quarter, passenger traffic reached a record 180 million.

China has relaxed visa restrictions to encourage both inbound and outbound travel and stimulate its economy, the report said. Citizens from six countries, including France and Germany, can now visit China without a visa, and the country has also reduced the cost of applying for travel documentation through 2024.

However, China’s international travel recovery is expected to be gradual, with passenger numbers lagging due to persisting challenges in outbound and inbound business, per the report. Bloomberg Intelligence analysts suggest that the overseas market will not rebound to 100% of 2019 levels by the end of 2024.

Developments in China’s relationship with the outside world, including President Xi Jinping’s meeting with President Joe Biden in November, are expected to facilitate the reopening of international travel, according to the report. These diplomatic efforts have already led to the restoration of more flights between China and the U.S., and European services are also expanding.

It was reported on Dec. 17 that the Chinese tourists who are traveling again are not spending like they did before the pandemic. The new breed of tourists is skewing younger and is less likely to visit malls and shopping centers — in part because they can buy anything they want online in China.