Fresh China ban on international tour groups weighs on sector stocks, to push firms further towards domestic market
- Beijing has tighten restrictions ahead of the winter months after Qingdao, Guangzhou and Ruili record cases of Covid-19, most of them imported
- China’s domestic tourism market has recorded a strong rebound in recent months after curbs were eased in July
China has extended the ban on inbound and outbound international group tours after several cities reported new imported coronavirus infections recently.
The extension, announced by the ministry of culture and tourism late on Wednesday, weighed on tourism stocks on Thursday. It is also expected to push tourism companies further towards the country’s domestic market.
“I don’t quite like this news, because the losses the tourism industry has recorded are huge,” said Eric Hua, a tourism product manager at Licheng International Travel, a travel services company in Shanghai. “We are redirecting our focus to the domestic market, especially travel and meals for conferences and meetings in China, as domestic restrictions have been eased.”
Beijing has moved to tighten restrictions ahead of the winter months after cities such as Qingdao, Guangzhou and Ruili recorded local Covid-19 infections, most of them spread by people or products arriving from abroad.
Hua said Licheng had been hit hard by the restrictions and had to lay off 50 per cent to 60 per cent of its employees during the pandemic, after its international travel business plummeted by about 90 per cent. The United Nations World Tourism Organization in May forecast a 60 per cent to 80 per cent decline in international tourism this year, with more than 100 million tourism jobs directly at risk.
