Chinese tourists set to turn to domestic options, finds Oliver Wyman survey

31 March 2020 Consultancy.asia

The global aviation and tourism industries are under extreme pressure at the present, and a new survey from Oliver Wyman may suggest another dent to their hopes of a quick recovery.

The global aviation industry has been experiencing boom in demand times in recent years, buoyed by a growing and increasingly mobile Chinese middle class. For example, a previous report from management firm Oliver Wyman tracked a rise from 6.5 trillion kilometres or so travelled in 2015 to around 8 trillion just two years later, largely on the back of demand from China. Meanwhile, half of the world’s most popular travel destinations are now located in Asia.

But the latest figures from the firm paint a worrying picture. In a recent survey, nearly eight out of ten respondents in China said that they planned to travel domestically when epidemic subsides – heaping even more pressure on the international aviation and tourism industries, which in some parts of the world are already facing collapse. The bright spot however, from the firm’s perspective, is the level of readiness expressed by Chinese respondents to return to travel.

“These results exceeded our expectations, particularly in regard to Chinese consumers’ willingness and eagerness to once again take trips,” said Jacques Penhirin, Oliver Wyman’s Greater China Retail & Consumer Goods leader. “Though there are some changes with regard to their traveling preferences, demand is still strong; a combined nearly 60 percent of surveyed consumers would not change their traveling plan and even plan to increase their frequency.”

Chinese tourists set to turn to domestic options

While the survey results may potentially suggest a healthy return to demand in other parts of the world once the worst of the crisis passes, in that China appears on the face of things to be getting over the hump, it should be noted that the Oliver Wyman survey was conducted in February, with needless to say the situation having continued to evolve since then. On top of that, a survey at the end of last year already showed that Chinese travellers had started leaning domestic.

That previous survey, fielded in November prior to the COVID-19 outbreak, found that the average outbound trips per capita for Chinese travelers had dropped quite significantly from 2.1 in 2018 to ~1.5 last year, reflecting the firm says a recent slowdown in terms of the growth of outbound travelers. Additionally, 64 percent of Chinese travelers according to Oliver Wyman survey had taken more domestic trips than outbound ones in 2019 as compared to in 2018.

“With 77 percent of the respondents surveyed now eyeing domestic destinations for their first post-epidemic trips, the COVID-19 outbreak is expected to exacerbate this shift in destination preference among Chinese travelers,” states the firm, noting that Yunnan, Beijing, Chongqing and Shanghai were now among the destinations at the top of the wish-list for local travellers. Among all potential outbound destinations spoken of, 57 percent were located in Asia.

“Travelers have started to take into account their health risk exposures when choosing their next destinations,” said Oliver Wyman’s Katie Sham, who led the survey. “For example, they are now increasingly considering places that are closer to nature and less severely impacted by the epidemic. This probably explains why Yunnan, a southwestern Chinese province with gorgeous natural scenery, has become the most popular post-epidemic traveling destination domestically.”

The common sight of bus-loads of Chinese tourists disembarking at popular tourist sites may also be set to change, with close to two thirds of local respondents signalling that for their next trip they would prefer to drive themselves. Indeed, tour buses have become the least popular option for tourists transportation, with 71 percent of those surveyed indicating that they would avoid taking tour buses – even when and if the global coronavirus pandemic subsides.