While it will not have any impact on outbound long-haul travel (say, to the United States), there is expected to be a surge in domestic demand beginning with the launch tomorrow of China’s all-important National Day Holiday. A strong travel demand has been made even stronger by this year’s longer holiday as the Mid-Autumn Festival, which also falls on Oct 1, will overlap with the weeklong National Day holiday, giving people an extended holiday of eight days until Oct 8.

Commonly referred to as Golden Week, the period accounts for a substantial share of the country’s overall annual travel and tourism expenditures.

Also factoring into the expectations for a domestic travel boom in China is the sense that the holiday is made all the more meaningful by its place on the calendar as the first significant travel holiday in 2020 without heavy restrictions since the emergence earlier this year, in China, of the coronavirus-driven global pandemic. Then, too, the Mid-Autumn Festival is a time to factor in visits to relatives and for family reunions.

Published reports indicate that high-speed passenger railroads are booked to capacity for travel to and from different parts of the country. And according to an item earlier this month in China.or.cn, Haikou Meilan International Airport in the capital of Hainan province, for example, will add and/or resume more than 1,500 flights to meet the demand of the travel spike expected for the National Day and Mid-Autumn Festival holidays.

Also, about 1,346 flights are expected to be added connecting Haikou with major tourist cities including Guangzhou and Shenzhen in Guangdong province, Wuhan in Hubei province, and Shanghai. Further, about 180 flights are scheduled to resume operation, according to the airport.

Now, as noted above, while all of this domestic travel activity won’t have a direct impact on international or long-haul overseas journeys by Chinese travelers, it suggests that the “travel aptitude” of the Chinese consumer is high and that they are ready to travel abroad—both to regional destinations such as Thailand, Vietnam and the Philippines, and to long-haul destinations in Europe and North America.

Posing a major challenge to a positive outlook for a renewed travel between China and the U.S. are muddled political relations, as well as tensions over trade matters. Even if air traffic between the United States and China is restored to pre-pandemic flight levels—not a great probability at all—it will take some time for U.S. receptive tour operators, travel suppliers and destinations to re-integrate into the distribution channels of China.

In the meantime, this week’s expectations for strong domestic activity in China will stoke the hopes of those promoting the USA. And, as the author Vera Mazarian has told us, “Hope is the last thing that dies.”

Students and Gamblers in the Spotlight: While most lead tourism-related stories on broadcast or streaming news, as well as print news media accounts from China have pointed to a strong and still recovering Chinese domestic travel sector, there have been occasional “off-page-one” items that could have deeper significance in their level of importance for Chinese-American relationships.

First, there came the news last week by the U.S. government that it had revoked the visas of more than 1,000 Chinese nationals under a Presidential proclamation issued earlier this year that denies entry to students and researchers deemed security risks—a move China called a violation of human rights.

The proclamation last May was ostensibly aimed at Chinese nationals suspected of having ties to the military. U.S. President Donald Trump said at that time that some students had stolen data and intellectual property. China has also accused the United States of racial discrimination. Could the U.S. action be a signal for rough times ahead for Chinese citizens seeking to visit the United States? Prior to the beginning of the coronavirus-driven global pandemic, rejections of visa applications had already been a top complaint of the travel trade in China.

There is also this: according to the latest annual “Open Doors” report from the from the U.S Department of State’s Bureau of Educational and Cultural Affairs and the Institute of International Education, with data for the 2018-2019 school year, there were 369,548 students from China enrolled at U.S. universities. China accounts for a third (33.7 percent) of all international students in the U.S. The next report for the 2019-2020 school year, is due to be released in mid-November.

While their impact is not broadly felt across America, those U.S. destinations with concentrations of Chinese students—states such as Massachusetts, California, Illinois and others—consider the students, along with their parents and relatives who escort them to the USA or visit them during the school year, a lucrative market. The overwhelming majority of the Chinse students pay for their tuition and housing. Along with their relatives, they also comprise a profitable sub sector at upscale department stores and specialty shops.

And second, there is this (from the category of “I’m shocked, shocked, to find that gambling is going on in here.”): The Chinese government has announced that it is going to publish a blacklist of foreign casinos that routinely target high rollers in the country, and ban its citizens from traveling to those destinations. The announcement came recently from China’s Ministry of Culture and Tourism, which said that, along with other government agencies, it has established a blacklist of casinos in overseas cities that market to Chinese tourists.

According to the authoritative gaming industry website, casino.org, nearly all forms of gambling are illegal in the People’s Republic of China—the exception being the state-run lottery. Commercial casinos are found only in Macau, an autonomous Special Administrative Region (SAR) of China.

A spokesperson for the Ministry of Culture and Tourism said “casinos in overseas cities attract Chinese tourists to go abroad for gambling activities, disrupting the order of China’s outbound tourism market, and endangering the personal and property safety of Chinese citizens.”

The Chinese government was silent on the issue of divulging which casinos and areas are on the blacklist. The ministry did say, however, that it would include casinos that allow proxy betting — the process of a gambler making bets on behalf of a person who is directing their play remotely via telephone or another device.

The government indicated that VIP junket groups, which coordinate travel from China to casino destinations for high rollers (and, apparently) lend them money to gamble with, are additionally being closely monitored by the central government.

Casino.org cited a brief note on the subject from DS Kin, Derek Choi and Jeremy An, analysts from JP Morgan: “At this stage, it’s difficult to know exactly how the government will clamp down and what it means by ‘blacklisting.’ But we suspect capital flows through underground banks and agents, as well as junkets’ promotion of these overseas markets, will be heavily scrutinized.”

For the first decade (2008-2017) in the explosion of Chinese leisure travelers, the low-cost, high-volume stop-to-shop group bus tour was the norm, the standard. Then, as more Chinese began to visit the USA, groups began to lose share. And now, anxious about traveling in large groups as the COVID-19-driven global pandemic continues to stoke concern everywhere, the group option is a preference just one out of 10 Chinese travelers.

According to newly released report—the ITB China Travel Trends Report—on the results of a survey of Chinese travel professionals, health and safety are key concerns that are having an impact on the travel intentions of Chinese travelers as a “new normal” settles upon the Chinese travel market. 

As analyzed by China Travel News, the report, based on a survey of 200 outbound travel agencies and companies, indicated that the prevention and control of the COVID-19-driven pandemic at destinations are considered most important to Chinese travelers, and that sanitary measures in force will also become key concerns, as will stable flight schedules.

Self-driving tours, FITs experiencing popularity: Self-driving tours, Free Independent Travel (FIT) and customized tours are being driven by the new situation to avoid places with crowds and large travel groups. “After the outbreak, travelers may prefer outbound products focusing on safety, health and wellbeing, while the demand for natural landscape and customized travel will also increase,” said He Yong, president of HCG Travel Group.

Travel intentions, themes and preferences for 2021: According to the survey results, island, outdoor, natural landscape, family and medical tours are expected to be the most popular themes in the coming year.

Restoring the Market: How should we go about the process of quickly restoring the Chinese travel market? The 200 respondents from Chinese outbound travel agencies and travel-related companies who participated in the ITB China Travel Trends Report survey, offered opinions and suggestions, such as “sustain and improve awareness and popularity of destinations,” “align and upgrade travel products focusing on safety and health,” “communicate with Chinese partners to keep aware of changes in the Chinese market,” “set up flexible operation process and quick response mechanism,” and “engage in pre-sale activities of travel products.“

In our last issue of INBOUND, we posed the challenge to those in the U.S. inbound tourism industry interested in the Chinese market with the headline: “Chinese Want to Travel. But to the USA?” Two weeks, later, most of the signals point to a continued expansion of sales and bookings for travel within China. But as far as the re-opening of China as an important overseas source market to the United States … well, think 2021.

From a dialogue we had with some staff at Dragon Trail Interactive, a global marketing firm headquartered in Beijing, we’ve digested some of the discussion into the following takeaways:

1. Growth of Domestic: China’s domestic tourism market is continuing a steady recovery, and the lifting of the ban on inter-provincial group tours in mid-July – after nearly six months – is a significant milestone. The announcement led to a surge in traffic to travel websites. Fliggy, Alibaba‘s online travel agency platform, more than 100,000 trans-provincial group tours, air tickets and accommodation reservations were sold in a little more than a week. By July 23rd, the number of daily passenger flights in China had rebounded to 80 percent of pre-coronavirus levels, reported China’s aviation regulator, the Civil Aviation Administration of China (CAAC).

2. Why is an increase domestic travel in China relevant to the USA? “While it might not seem related to outbound tourism, the recovery of the domestic market is actually an important first step to reigniting interest in travel, and for consumers to feel comfortable traveling again,” Matt Grayson, president, Americas, told us.

3. What the industry is doing in China to nurture a recovery: Chinese tourism businesses, including OTAs, airlines, and hotels, have all helped this recovery to happen with huge discounts, rewards to incentivize travel (such as extra loyalty club points, for example), giveaways, and experimentation with new sales channels such as live streaming sessions. Another example is that of the Trip.com Group, which is taking advantage of “pent-up wanderlust” by livestreaming sale events of heavily-discounted hotel stays around the world, all of which come with flexible arrangements that allow travelers to cancel or postpone the reservation with no penalty.

4. Any indication of re-start of travel to the United States? Grayson said that, “at this point, there is still almost no outbound tourism from the Chinese mainland, and this is unlikely to change before there is a relaxation of the policy that requires all incoming arrivals to China to quarantine for 14 days at a quarantine center, and to pay all expenses for this.” He noted that, in a recent consumer survey that Dragon Trail conducted, it found that the quarantine-on-return was the leading reason that respondents would not travel outside of China.

5. Any authoritative sign of just when might travel to the USA resume? The full return of international travel is unlikely, according to James Liang, chairman of the Trip.com Group, who said that travel between Asia and Europe, and Asia and the U.S. will not resume until next year. Mr. Liang said that travel stocks have regained 30-50 percent of their losses. And within the next six months, they would probably go up to 80-90 percent of their pre-pandemic levels. (Liang is chairman and co-founder of Trip.com Group, which operates four of the top platforms in China: Trip.com, Ctrip, Skyscanner and Qunar.)

Also, latest ITB China travel trends report which examined the impact the coming recovery phase will have on the planned travel behavior of Chinese outbound tourists, indicated that the largest group of those surveyed expecting recovery in this market in 9-12 months. The 2020 China Market Recovery Special Edition is based on an annual survey among 200 Chinese outbound travel agencies and travel companies, including interviews with industry experts. When asked about the recovery of the Chinese outbound travel market, respondents indicated the following:

—43 percent of those surveyed expect that outbound travel will recover within the next nine to 12 months;

—A third (33 percent) think it might take six to nine months,

—One fifth (20 percent) of survey respondents believe it will take three to six months; and

—4 percent expect to see a recovery within the next three months.

6. So, what, if anything, should U.S. suppliers and DMOs be doing? Dragon Trail Interactive put it this way: At this point, although outbound travel from China is not happening, it’s still a good idea to stay engaged with the market. This includes B2C content – a good example here is Switzerland Tourism, which has kept posting as usual on Chinese social media channels, with lots of content promoting Switzerland’s landscapes and natural beauty. They increased their followers on Weibo by around 16,000 during the second quarter of 2020. B2B engagement is also important at this time, and the Chinese travel trade is very receptive to training and ways to communicate through online events and platforms. Keeping them well informed of any updates, as well as new products, will help them to make the recovery process as smooth and speedy as possible, once international travel is possible