Fitch Ratings show that China’s domestic tourism is on track to return from pandemic lows

Fitch Ratings show that China’s domestic tourism is on track to return

August 16, 2022: -China’s domestic tourism is on track to make a comeback after dipping to an all-time low during the worst lockdowns of nature, according to official data and analysts.

Since the mainland’s huge lockdown in Shanghai finished in May, the increase in holiday bookings has shown that tourism spending would recover this year, Fitch Ratings stated.

Fitch further said that this buoyancy came after tourism revenue and numbers in China reached a trough at the beginning of 2022 and decreased by nearly half compared to 2019 before the pandemic.

“China’s relaxed Covid-19 related travel restrictions and more aimed pandemic control measures have fueled a surge in tourism demand, despite ongoing scattered outbreaks,” China-based Fitch Rating analysts Flora Zhu and Jenny Huang added in a note late in the previous week.

“A slow recovery in the tourism sector has put a drag on the economy given its large contribution, which accounts for around 11% of GDP and 10% of national employment in 2019.”

After a series of relaxations by Beijing, including the easing of inter-provincial group travel bans and the curb of excessive local government mobility controls in June, traveler numbers leaped by over 62% month-on-month in July, Fitch Ratings added, which cited official Chinese data.

Data from online travel agencies like Tuniu Corporation showed bookings surging 112% over July, Fitch added.

The Fitch analysts said that the average number of daily tourists at Xinjiang’s top-rated, or “5A-level,” tourist attractions skyrocketed to 110,000 in July compared with 19,000 in May. Yunnan’s Dali city, a famous tourist spot, attracted 6.9 million tourists, a 46% jump from pre-pandemic levels in 2019, they said.

The recent outbreaks in Hainan, Xinjiang, and Tibet are doubtful to pull back the healing in tourism as there are fewer travelers in these regions compared to the rest of the nation, the Fitch report said.

But recovery, while robust, stays patchy across regions. In particular, short-haul travel operators will do better than national scenic spot tourist companies, which target national visitors, it added.

The report stated that Chinese consumers would restart to favor local and shorter trips after the pandemic.

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