What: China has significantly started recovering in the domestic tourism market.

Why it is important: Signs are showing that customers are not yet ready in terms of the trust to travel internationally, which is an issue to deal with by European players, as the rebound of the pandemic is making headlines. Furthermore, one might read in between the lines that the Chinese customer is changing in nature, confirming its transition towards a more individualistic, hedonistic one. This will also have consequences on retailers regarding the way they deal with these customers once markets are fully reopened.

McKinsey had conducted a survey in May 2020 about Chinese travels, concluding that the domestic travel would recover quickly (as a reminder, the global tourism market is expected, according to Visa, to shrink by 67%, for a value of €733bn, to get back to 2002’s levels at €362bn globally, from €1,095bn). They are now updating this story to identify lessons for other countries. As the key features of their study:

• In September, demand for domestic travel is back to last year’s level, while international tourism demand is still very low,
• Domestic travel demand is valid for all types: local leisure trips, domestic short and long haul, domestic business travel. For leisure, an important element is that more and more respondents are asking for self-guided or self-driving experiences, rather than group visits,
• In spite of this enthusiasm, the trust in travel is still hesitant, which probably explains why high-end travel is booming,
• The recovery of international travel is likely to be gradual, according to the establishment of “travel bubbles” in the region. However, the trust factor remains to be seen.

Very expectedly, the report concludes that, for other countries, key steps now are to rebuild demand, via promotional activities, before enhancing the value proposal once trust has been reinstalled, focus on domestic consumption, and accelerate the digital transformation.

What can other countries learn from China's travel recovery path?