Chinese Tourism to Rebound in 2023 with 'Revenge Travel'

After a lengthy period of time, China is set to reopen its borders. This will bring back Chinese tourists, who will be a great benefit to businesses in neighboring countries that used to depend on them.

Starting in early January 2023, travelers to China will no longer be required to quarantine or take Covid-19 tests upon arrival. This change marks a significant shift in the nation's pandemic policies, which have kept the country largely closed off to the outside world since 2020. This will make it easier for international visitors to come to China, as well as for Chinese citizens to travel abroad.

It may take some time before Chinese tourists, who were the largest source of tourism revenue for the world before the pandemic, can fully return. The recent outbreak in China has caused other countries to impose restrictions on Chinese visitors, including some of the most popular destinations such as Japan and South Korea. Additionally, visitors to the U.S. from China will need to have a negative Covid test from early January. These measures may limit the initial influx of Chinese visitors, but as all of these countries have chosen to live with Covid-19, these restrictions will likely be lifted eventually, especially after the current Covid-19 wave in China subsides.

The news of the border reopening has been a boon for Chinese airlines and travel agencies. Shares of China's online travel company Trip.com have seen a dramatic increase of 55% since the end of October. Air China has also seen a notable rise of 24% in the same time frame.

The advantages of the pandemic will be felt far and wide, particularly in nearby nations. For instance, Chinese travelers represented around a third of all visitors to Japan and South Korea before the pandemic. Additionally, they made up around a quarter of all visitors to Thailand in 2019.

In the past two months, the stock of Hotel Shilla, a South Korean company that runs duty-free stores and hotels, has increased by 28%. Duty-free stores in the country, which are a popular destination for Chinese tourists to purchase items such as cosmetics, have experienced a decline in the past two years. According to data, sales at duty-free stores in South Korea from January to October of this year have decreased by approximately 25% compared to the same period in 2019. Additionally, the stocks of cosmetics companies such as Amorepacific from Korea and Shiseido from Japan have also seen a rise in recent times.

Businesses that depend on Chinese tourists have had a difficult couple of years, but now they have something to be happy about. Despite the ongoing economic issues in China, tourism spending is expected to eventually return to pre-pandemic levels, although it may take some time.