Coronavirus: Can China’s Golden Week Boost Asia’s Economies?

The annual Golden Week holiday is called “the world’s largest human migration,” as it generally sees millions of Chinese tourists traveling internationally.

China accounts for almost a fifth of the world’s international tourism according to the United Nations World Tourism Organization.

But this year, the pandemic has made international travel nearly impossible. So instead, they travel locally.

As a result, domestic tourism during this national Christmas season is expected to recover to near-pandemic levels, helped by pent-up demand and cheap airfare.

China’s Ministry of Tourism said that around 425 million people traveled within the country during the first four days of the vacation alone.

And ticket sales from China’s largest online travel portal Trip.com show that local tourism is rebounding to around 80% compared to last year.

China’s recovery

“There is a pent-up demand from Chinese travelers and their consumption, but there is still a kind of caution there,” said Veronica Wang, Chinese consumer analyst at OC&C Strategy.

However, some local governments, including Shanghai’s, are not promoting domestic travel much and are asking students and their parents not to leave the cities at all.

“But we are seeing a boom in the luxury industry driven by consumers who love to travel internationally but cannot now. So they are investing their money in the domestic market,” added Ms. Wang.

He said that this year many Chinese travelers have headed to Hainan Island, the southernmost part of China, to shop because local tourists can now buy luxury goods duty-free there.

Big spenders

The World Travel and Tourism Council says that tourism generated more than $ 2.9 billion (£ 2.24 billion) for Asia Pacific economic growth in 2019. That’s almost 10% of the region’s entire economy.

One sixth of that spending came from international visitors.

But the pandemic caused a 72% drop in international tourists in the first half of the year, decimating local businesses, including hotels and restaurants that depend on tourism.

Some analysts say Asian governments hope that domestic tourism spending can fill this gap.

Fortunately, Asian tourists spend a lot. The region accounted for $ 524 billion in international tourism spending in 2018, roughly 36% of the global total.

“The push for domestic tourism is important, because so far different countries, regions and jurisdictions have encountered a challenge in agreeing to the standardized Covid-19 guidelines,” said Simin Ngai, an aviation industry expert at Cirium.

“This applies not only to Asia Pacific, but to any country connected to the global economy and to any airline that competes internationally,” he added.

Stay afloat

Like China, other countries in the region are also looking to redirect spending to their domestic markets to help keep their economies afloat.

“Besides China, Vietnam has stood out as a successful example of encouraging locals and residents to explore their own backyard. This has been a concerted, top-down effort with the support of the hotel industry,” said the Mrs. Ngai.

South Korea and Japan are also encouraging more domestic tourism, taking advantage of pent-up demand for air travel.

But for a small city-state like Singapore, the concept of domestic tourism hardly exists. However, his government has introduced a S $ 230 million tourist aid bill, which includes cash vouchers for residents to use when visiting local attractions.

“While domestic travel is a key growth engine in the industry, Asia has yet to reap the benefits of the revival in domestic tourism, as many Asian countries historically rely on international and intra-regional travel,” said a spokesperson for Global Online travel site Booking.com told the BBC.

Going nowhere

As part of that push for domestic tourism, some airlines are selling customers tickets for “flights to nowhere” – the plane takes off and lands at the same airport, but the passengers enjoy a scenic ride.

More than 7,000 people applied for the 60 available seats offered by Taiwan’s Songshan Airport in July for their flights to nowhere.

Since then, many airlines have offered similar experiences, although some have faced headwinds from environmental groups concerned about unnecessary carbon emissions for the sake of profit.

But there is another reason for these flights.

“Engines will deteriorate if they are not used for a long time and tires can be damaged if they are not rotated regularly,” said Kenneth Chen, a former aircraft maintenance engineer.

“Pilots must also log three flights in a 90-day period for their licenses to remain valid.”