China adds lipstick to gloomy economic recovery with domestic summer travel boom, but overseas flights still lag
- Domestic passenger traffic in China has exceeded pre-coronavirus levels, but the recovery of international travel remains sluggish
- Consumers are seen to be more willing to make small expenditures, such as travelling, during an economic downturn, with China’s recovery having stalled in recent months
China is embracing a domestic travel boom as the summer holiday season began with crowded airports, adding a “lipstick effect” against a gloomy economic recovery backdrop in recent months.
Domestic passenger traffic has exceeded pre-coronavirus levels, data from multiple flight-tracking platforms suggested, with parents and children enjoying the first summer without stringent coronavirus restrictions since 2020.
Around 103,000 flights took place in China during the same seven-day period, up by 7 per cent from the same period in 2019, according to figures from VariFlight, a civil aviation data services provider.
When the economy is bleak, people won’t spend on real estate, but they’re willing to make small expenditures such as travelling or outdoor activities
Almost 9 million people flew via Chinese airports in the first five days of July, up by around 14 per cent from the pre-coronavirus period, according to FlightAI, a market insight platform affiliated with online travelling agency Trip.com.
“There is a lipstick effect in tourism. When the economy is bleak, people won’t spend on real estate, but they’re willing to make small expenditures such as travelling or outdoor activities,” said He Jianmin, a professor of tourism at the Shanghai University of Finance and Economics.
He was referring to the so-called lipstick index, a theory which suggests consumers are more willing to buy less costly luxury goods during an economic crisis.
China’s economic figures in recent months have fuelled concern over its post-coronavirus recovery, with challenges ranging from limited domestic and foreign investment to a drop in exports and an ailing property market.
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However, high growth in tourism is expected to continue as the sector gradually recovers from three years of virus control measures, He added.
Domestic travel had seen an annual growth rate of between 8 to 10 per cent before 2019, when around 6 billion trips were recorded, according to government data.
China is also a huge market for global aviation, accounting for 9 per cent of all international air passenger demand before the pandemic, according to the International Air Transport Association.
But uncertainties, including the war in Ukraine and the global economic downturn, have hindered Chinese tourists’ return to overseas travel, said He.
Domestic travel agencies need more time to reconnect with overseas partners, many of whom may have gone bankrupt
“Domestic travel agencies need more time to reconnect with overseas partners, many of whom may have gone bankrupt during the past years. So the entire industry needs to be restructured,” he said.
Major Chinese airlines have accelerated their resumption of international routes since late last month ahead of the summer holiday, bringing back a series of flights for European destinations, including Rome and Frankfurt.
But they are still far from the levels in 2019, which will not be reached until the end of next year, according to a previous estimate from the China Air Transport Association.
