Outbound overseas tourism from China to still face challenges until 2025

Significant obstacles will still stand in the way of China’s recovery in terms of foreign outbound tourism in 2024 and maybe 2025, according to a forecast by banking firm Nomura.

Based on the findings, “supply-side constraints”—including the availability and cost of flights—have gotten better, but problems like the weakening yuan, the state of the domestic economy, stagnant wage growth, and high rates of youth unemployment are increasingly impacting the “demand side.”

Nomura projects that Chinese travelers on international flights will increase from 57.9% in November 2023 to 73% of 2019 levels by the end of 2024, with a 67% recovery for the year.

By 2024, outbound Chinese tourist spending should fully rebound and approach 2019 levels. But Nomura believes that it will take until 2025 for international travel and passenger numbers to fully recover.

The survey also shows that overseas travel to ASEAN countries has not improved at all, with just a little increase from October to December. With a recovery rate of 81.6% of 2019 levels in December, Singapore is the best-performing ASEAN member in terms of flights from China despite the challenges.

This cautious view of China’s outbound tourism comeback aligns with Nomura’s previous concerns on the nation’s economic performance and with data on outbound travel to neighboring destinations such as Singapore and Thailand.

China’s campaign against “cross-border gambling” by mainland nationals and any slowdown in the recovery of Chinese tourist traffic might be detrimental to the Asia-Pacific casino industry, which often caters to Chinese tourists. According to Morgan Stanley and Bloomberg Intelligence, China’s international aviation traffic may not fully recover to pre-pandemic levels until 2025.

Original story by: GGRAsia