Although Chinese consumer confidence is growing, desire for travel has shown a faltering recovery due to sporadic COVID-19 outbreaks.
NB: This is an article from McKinsey & Co.
A predictable pattern is emerging where desire for travel recovers roughly two months after a decline and even though international travel is restricted, the desire for travel remains. Furthermore, travelers’ preferences are shifting, with implications for travel companies.
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This article updates findings of McKinsey’s Survey of Chinese Tourist Attitudes and compares the results across the five surveys taken in April 2020, May 2020, August 2020, January 2021, and October 2021. It also examines the implications of shifting attitudes toward travel and offers actions that travel companies may consider when planning for the year ahead.
Consumer confidence is growing but desire for travel shows a pattern of spikes and dips
Confidence in China’s recovery is growing – consumer confidence is now at the highest level since the start of the pandemic. In February 2020, consumer confidence was at 43 percent. In October 2021, 67 percent of respondents indicated that they believe the Chinese economy will recover within two to three months (Exhibit 1).1
As confidence grows, consumer spending is also showing signs of recovery. The latest Survey of Chinese Tourist Attitudes indicates that the majority of respondents, 77 percent of households, expect their income to stay constant in the near future and essential spending and discretionary spending have both increased since March 2021 and are stabilizing.
When it comes to travel sentiment, desire for travel has spiked and dipped as COVID-19 outbreaks continue. Previous McKinsey research indicated that the resurgence of domestic travel would support China’s travel industry recovery.2 But, with recent sporadic outbreaks, confidence in domestic travel has been affected. For instance, in October 2021, only 2 percent of people planned to travel in the next two months. But comparing the results of the five tourist attitude surveys, it appears that COVID-19 outbreaks suppress travel desire for up to two months. The good news is that confidence in domestic travel safety quickly rebounds, showing a predictable pattern of recovery (Exhibit 2 and 3).
