Chinese Tourism = $$$$$$$$$$$$$$

Prior to 2020, Chinese tourism was the largest source of international travelers in the world. It's 155 million tourists spent over $250 billion globally in 2019.

During the past three years, these numbers have dropped to almost zero. As China prepares to reopen its borders this Sunday, millions of tourists are getting ready to return to the world, inspiring hopes of a rebound in the global hospitality industry.

Although it's unlikely that global Chinese tourism is going to rebound in days, it will certainly be very impactful in 2023.

In 2019, approximately 12 million Chinese travelers explored the globe every month. Some estimates are that Chinese global travel will rebound to about 6 million travelers per month during this coming summer. This will be driven by pent up demand from active independent travelers, a desire to explore the world by younger travelers and increasingly by wealthy Chinese that are looking to restore their global lifestyle.

Our recent survey of Chinese global travelers on our several WeChat social media platforms in China indicate that over 95% of previous Chinese global travelers are planning to travel again in 2023.

As soon as China announced that effective January 8 it will no longer require inbound travelers to quarantine, searches by Chinese prospective travelers for international travel grew by over 1000%. Trip.com, one of the largest Chinese online travel agencies, recently reported that bookings for the upcoming Chinese lunar New Year holiday, between January 21 and January 27, have increased 540% from a year ago, with average spending per booking jumping 32%.

The top destinations for the upcoming holiday are in the Asia Pacific region, including Australia, Thailand, Japan and Hong Kong. The United States and the United Kingdom also ranked in the top 10.

Over the past three years, by some research estimates, Chinese citizens have accumulated over $17 trillion in cash holdings. If you add credit availability, the total obtainable cash equivalent of Chinese consumers comes close to $40 trillion.

Since Chinese citizens have largely been locked down, quarantined and anxious over the past three years, there is a high probability that the world is going to see a staggering amount of revenge spending by Chinese consumers, essentially mirroring what happened in many international markets when they reopened in the last year.

Short term, the largest beneficiaries are likely to be Hong Kong, Thailand, Vietnam and Singapore, with a rapid return to inbound travel levels of 2019.

Hong Kong, which in 2019 was the worlds most visited city with nearly 56,000,000 arrivals, most of them from mainland China, could see an estimated 8% boost to its GDP as exports and tourism income increase. GDP in Thailand could grow by nearly 3% and Singapore is like to go get a lift of nearly 2%, all because of Chinese travel.

Although several countries have instituted testing regimes for Chinese travelers, in China today there is a little talk about this. It's good to remember that Chinese have been tested every 24 - ?48 hours for the past three years. Testing facilities are available on almost every street, in front of the metro stations, every hospital and local health clinic. Testing takes a few minutes and obtaining a test result takes a couple of hours. After all, China requires testing for return, so testing on the outbound is not really likely to daunt global Chinese travel choices.

The Italian health ministry, which has been the leader in testing Chinese on arrival, recently reported that the positive test results collected were all omicron, which has existed in globally ?for two years. With extensive herd immunity and vaccination rates throughout Europe, the likelihood of Covid being re-introduced into most countries is extremely small.

Some challenges exist.?Flights need to be available and pricing needs to be corrected to normal non-covid fares for tourism and business travel. Many people in China have to renew passports, as well as visas. Some people will wait to see if the testing restrictions are removed in the coming weeks and also make sure that the system is really able to handle the increase of global Chinese travelers.

Countries with quick and easy visa processing, such as Thailand, are likely to be rewarded in the next couple of months with inbound travel and spending.

Recent discussions with several travel agencies, tour operators and OTA's in China indicate that it's possible that Chinese travel to certain destinations may rebound to 2019 levels by the end of this year.

Generally, industry and governments are very pragmatic and welcoming Chinese tourists because of their spending power. It may take time for some destinations to develop a system capable of handling Chinese inbound travelers. But when the first million travelers return to Thailand, spending billions of dollars, the world will wake up very quickly.

2023 Will Be The Year of Chinese Travel!

From Shanghai.

Alexander Glos