China’s post-Covid-19 travel industry sees green shoots with tourists embracing short trips, luxury stays in lessons for global operators
- As the psychological effect of pandemic still lingers, tourists are keeping travel to a minimum and choosing destinations around big cities
- High-income travellers flocked to domestic luxury resorts like Atlantis Sanya in Hainan in August, pushing up the occupancy and room rates
As the country’s US$1 trillion tourism industry slowly gets back on its feet after taking a massive hit from the coronavirus outbreak, the shape of its recovery could provide lessons for the rest of the world still struggling with the pandemic.
“The coronavirus will have a profound and long-standing effect on the global tourism industry,” said Qian Jiannong, chairman and chief executive of Fosun Tourism, in an recent interview with the South China Morning Post. “Different segments and regions in the market will diverge in their future performance, and this will lead to great structural opportunities.”
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Tourists so far have embraced destinations close to their homes to keep travel to a minimum, according to Jiang Hong, chairman of China Travel International Investment Hong Kong, which owns theme parks, hotels and tourist attractions across China and Hong Kong.
“The psychological effect of the virus is still lingering, so the traditional long-distance tour group has not recovered much,” said Jiang. “But our family-oriented attraction complexes that include theme parks and hotels, and are located around big city clusters, such as Shanghai, Hangzhou and Suzhou, [in August] have matched or surpassed the level in the same period last year.”
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The Hong Kong-listed company is looking to invest in more such projects in the Pearl River Delta region in eastern China and the Greater Bay Area, according to Jiang. The firm suffered a 74 per cent slump in first-half revenue to HK$571 million (US$73.7 million).
Meanwhile, high earners and middle-class families, unable to travel overseas as most countries’ borders remain closed to tourists, flocked to domestic luxury resorts. Atlantis Sanya, in the southern island of Hainan and owned by Fosun Tourism, was one beneficiary of the strong recovery in the high-end segment.
Occupancy at the five-star hotel, which features a water park and an aquarium, reached 95 per cent in early August, even as room rates rose 5 per cent from the same period last year, according to Fosun Tourism’s Qian. A night’s stay at Atlantis ranges between 2,488 yuan and 12,0539 yuan, according to travel booking websites.
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He said that while travel demand from the low-income segment has fallen after the pandemic, high-income earners want to travel much more, but “there are not many high-end products in China that can satisfy their demand”.
In addition, the rapid adoption of home office and video conferences will lead to less business trips, Qian said, adding that it could give rise to the emergence of “working holidays”, where people can work remotely from a comfortable resort with their families in tow.