How has China's travel industry been performing?
Across the globe, the travel industry has been severely impacted by the COVID-19 pandemic, and China has been no exception. Both domestic and international tourism suffered significant declines.
However, thanks to a centralized pandemic response system, coupled with the general public's compliance with rigorous countermeasures such as mask-wearing, the COVID-19 pandemic in China is largely under control across much of the country. As a result, the travel industry has started to rebound back, in terms of both traffic and spending.
Due to travel restrictions imposed by the government, there are still headwinds for international travel, which accounted for 14% of mainland China's travel industry in 2019. Markets with a higher dependency on international travel and transit passengers such as Hong Kong and Taiwan have still been severely impacted.
What are the future scenarios for the Chinese travel industry?
Accenture has developed four future scenarios for the global travel industry that reflect various potential outcomes and impacts of key external factors that influence global travel demand.
Given the rebound in domestic travel, we do not expect the "darkest days" scenario to transpire for China. Rather, we expect that at least for the domestic travel industry, a "remarkable recovery" or "collective coexistence" future scenario is quite likely. However, the international travel market still remains volatile since the virus is not yet fully contained globally. Therefore, for the international inbound and outbound travel market, the "market mayhem" future scenario remains a possibility in the short and medium term.
Shifts in market dynamics and customer behavior in China?
Although China is on the way to recovery, things will not exactly go back to the way they were before. The pandemic has transformed the way Chinese consumers travel and what they expect from travel companies. We've identified several key shifts in local market dynamics and customer trends that have implications for the specific actions that travel companies should take to prepare for the future travel scenarios described.
What actions should travel companies take going forward?
In response to these new local dynamics, Chinese travel companies have the opportunity to take action in five areas: