CHINA. Today is a momentous day for China’s travel industry and by extension for the global travel retail sector.
It marks the long hoped-for mass easing of Chinese travel restrictions – inbound and outbound – which have ranked among the world’s toughest and most sustained.
Simultaneously, the lifting of the quarantine requirement for travellers arriving in China is seeing thousands of travellers cross the newly reopened border checkpoints between Hong Kong and the Mainland today.
That spells good news for all Hong Kong travel retailers, including border and railway station duty free operators Free Duty (Sky Connection) at Lok Ma Chau Terminal Building and Dufry (the retailer will reopen its key MTR West Kowloon High Speed Rail Station shops on 15 January).
On the other side of the border, powerful Shenzhen Duty Free Group has just won the rights to operate the departures duty free concession at Guangzhou East Railway Station. It will manage two stores covering 163sq m under the Times DF branding serving Hong Kong-bound travellers.
In more good news for travel retailers, Hong Kong’s neighbour and fellow Special Administrative Region Macau also opened its borders to all foreign nationalities today (see Macau Daily Times report below). Arriving visitors will no longer require Health Bureau (SSM) approval and some will not need a pre-departure COVID-19 test.
Macau downtown and airport travel retailers such as China Duty Free Group, Dufry, Duty Free Americas, DFS Group, Heinemann, King Power Group (HK) and The Shilla Duty Free will be hoping for a steady return over time to the glory days of 2019. While DFS prospered through generating very high average spends from a much smaller footfall during protracted periods of the pandemic, for the other retailers 2020-2022 has generated very slim returns.
From an international perspective, Chinese travellers were the engine room of the travel retail community prior to the pandemic. Their return – even if on an initially limited, phased basis – comes as a huge fillip for a retail channel now in accelerating recovery mode in most markets.
How many Chinese will travel in this initial transition phase? Where will they travel (and be encouraged to travel)? For what purposes? What will their spending habits be?
All critical questions but whatever the answers, consider this. While any 2023 number is certain to fall far short of the record 155 million in 2019, the upwards trajectory from the miserable 2019-2022 years (the 2020 total of 20.3 million was roughly on the same level as 2003 and the gains since have been marginal) is certain to be steep.
Opening for business once more: Get ready for the China travel surge Despite the fact that large swathes of the world aren’t exactly rolling out the welcome mat and COVID rates across the Mainland remain very high, make no mistake, the Chinese are coming. |
While there is no final number available yet, let’s say some 25 million Chinese travelled abroad in 2022. That is short of 2004’s 28.9 million. Now let’s pluck another number as a guesstimate for 2023. 70 million (some say higher, some say lower). That would be roughly equivalent to 2011 levels. 80 million would be close to 2012 (83.2 million). Say 100 million and we’re really starting to motor at above 2013 levels (98.2 million).
Here we present a snapshot of mainstream and sector coverage related to this landmark moment in travel – and therefore travel retail – history.
GLOBAL TIMES
Citing online travel agency LY.com data from today, powerful Chinese state media Global Times reports that order numbers for international flights recorded +628% year-on-year growth, the highest since March 2020. Inbound and outbound flights accounted for 48% and 52% respectively.
Other key points in the report include:
- The Civil Aviation Administration of China announced on Friday that international flights can directly land in Beijing starting today (8 January) without being redirected to other entry points.
- China Eastern Airlines plans to increase its weekly international passenger routes to 48, with 184 flights.
- China’s civil aviation industry has been embracing a “surging vitality” since the beginning of the new year. Hangzhou-based Loong Air surpassed 2019 comparisons for the period while the recovery rate of flights between Beijing and Sanya, epicentre of the offshore duty free business, reached +122%. Air China also recovered several international routes during the New Year holidays.
CHINA DAILY
The influential state-owned media focuses on the reopening of the Mainland-Hong Kong border. Authorities will allow 60,000 people a day to travel each way between Hong Kong and the Mainland via seven border ports, it reports, along with extensive pictorial coverage that reflects the heavy demand.
SOUTH CHINA MORNING POST
THE STANDARD
Fellow Hong Media The Standard leads on the same story today. During a visit to Lok Ma Chau port today to monitor the reopening, Hong Kong Chief Executive John Lee Ka-chiu said the government is seeking to expand the number of crossing points from the current seven to the full 14, and to drop headcount quotas.
“The goal is to get back as quickly as possible to the pre-epidemic normal life. We want cooperation between the two sides back on track,” Lee said.
RTHK
Hong Kong English language media RTHK reported that hundreds of travellers were flocking to Macau as Hong Kong-Macau Ferry services resumed for the first time in three years.
CNN
Quoting Trip.Com Group Head of Media and Executive Communications Wendy Min, CNN reckons the most popular destinations in the early 2023 Chinese travel wave are Singapore, South Korea, Hong Kong, Japan and Thailand. For long-haul destinations, the US, UK and Australia lead the pack.
