Chinese New Year heralds a new dawn

Danielle Curtis, Exhibition Director ME, ATM

One of the most anticipated trends for travel professionals in the Middle East at the end of 2022 was the return of the Chinese outbound market in 2023. Well, we all received an early Chinese New Year present with the announcement on January 8 that China had lifted its Covid related quarantine requirements for inbound travellers, after three years of restrictions.

As a result of the Chinese government’s new policy, the surge in demand was witnessed by online international travel portals, in some cases hitting a three year high, with millions of Chinese expected to travel abroad to celebrate the Lunar New Year. The catalyst of course was that Chinese travellers could not only travel abroad, but there would be no quarantine once they returned home.

In the years prior to the pandemic, China became the world’s top source market – with 155 million tourists spending more than $250 billion overseas during 2019. It’s incredible to think that China was averaging approximately 12 million outbound air passengers per month in 2019. However, those numbers plummeted 95% once Covid-19 hit.   

In a CNN report, Steve Saxon, a partner at McKinsey, based in their Shenzhen office, now predicts the Chinese outbound market will begin to recover to around six million per month by the summer of 2023, predictably driven by the pent-up demand especially from young, affluent Chinese.

Bookings for overseas travel during Chinese New Year which ended on January 27 this year, soared by 540% compared with the same period in 2022, according to data from the Chinese travel site Average spending per booking also leapt by 32% over the same period, due to Chinese households accumulating considerable savings during lockdown.

Given that China was the world’s largest source of outbound tourism before the pandemic, its isolation from the global market over the past three years has set the industry back by an estimated total of $840 billion, equivalent each year, to 16% of the $1.7 trillion annual spent on global tourism, according to UNWTO.

Dubai received almost one million Chinese visitors in 2019, which was an increase of over 15% compared with 2018. And while the 154,000 Chinese visitors Dubai welcomed over the first 11 months of 2022 was down 83% compared to the same period prior to 2020, it was up 115% year-on-year.

Destinations in the Middle East such as Dubai, Saudi Arabia’s AlUla, and Jordan which have continued to market to Chinese outbound business-to-consumer and business-to-business should place them in a strong position to benefit from the rebound of Chinese visitor numbers.

This will be a timely boost for ATM 2023 as well and we have noticed a huge amount of enquiries recently from travel professionals in China, both inbound and outbound. Although we would not expect the same volume of Chinese exhibitors and visitors we received in 2019, we are confident of healthy participation numbers this year.

Further underpinning our confidence, according to a recent survey by the Shanghai Institute of International Studies and PwC China, over 75% of Chinese businesses polled were looking to enter or expand their presence in the Middle East over the next three to five years. The UAE and Saudi Arabia were the two top destinations for investors. Naturally that will have a direct impact on the number of Chinese travellers entering these countries, both short term and long term.

Further good news arrived last week when the Chinese Ministry of Culture and Tourism, announced that travel agencies and online tourism services providers in China could provide group tours to the UAE from February 6, 2023.

Meanwhile, a Chinese tourist group began a tour of Egypt recently ahead of the Chinese New Year, becoming the first group from China to visit a foreign country in three years after the outbreak of the pandemic, Xinhua news agency reported.

In terms of connectivity, Emirates had already announced that it was ramping up its operations in China ahead of the New Lunar Year and in response to strong travel demand, boosting connectivity to its gateways; Guangzhou, Shanghai and Beijing.  

Emirates has resumed two weekly flights to Shanghai and will increase its service back to daily flights by March 1, 2023. Daily non-stop flights to Guangzhou will commence on February 1 and a daily non-stop flight to Beijing will resume on March 15.

All in all, this is excellent news for the Middle East tourism industry. Naturally it will take time to reach pre-pandemic levels, but I think it is safe to assume that numbers will grow rapidly and that destinations such as the UAE, Saudi Arabia, Egypt and Jordan will reap the benefits of relaxed visa regulations, consistent marketing and increased flight schedules and connections.

In many ways I am convinced that the Middle East will experience another surge in tourism reminiscent of the sudden boost we witnessed from traditional source markets in Europe and India in late 2021 and early 2022.  

So, here’s to a very happy Lunar New Year and Ni Hao to all of our Chinese visitors, we’ve missed you!