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Oct 6, 2020

News | Business | China Golden Week: Can China's Golden Week still shine brightly?

 

Derek Cai 


Scores of people are seen on the Great Wall of China Image copyright EPA

The annual Golden Week holiday is dubbed "the world's largest human migration" as it usually sees millions of Chinese tourists travelling internationally.

China accounts for almost one-fifth of the world's international tourism according the United Nations World Tourism Organisation.

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

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

China's tourism ministry said around 425m people travelled within the country during the first four days of holiday alone.

And ticket sales from China's biggest online travel portal Trip.com show local tourism recovering to around 80% compared to last year.

China's recovery

"There is pent-up demand for Chinese travellers and their consumption, but there is still a kind of cautiousness there," said Veronica Wang, a Chinese consumer analyst at OC&C Strategy.

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

"But we are seeing a boom of the luxury industry driven by consumers who love to travel internationally but cannot do so now. So they're pouring their money into the domestic market," added Ms Wang.

She said this year many Chinese travellers have been making their way to Hainan island, the southernmost part of China, to shop because local tourists can now buy duty-free luxury goods there.

Big spenders

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

One-sixth of that spending came from international visitors.

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

Some analysts say governments in Asia are hoping that domestic tourism spending can fill this void.

Thankfully, Asian tourists are big spenders. The region accounted for $524bn in international tourism spending in 2018, about 36% of the global total.

"The push for domestic tourism is important, because different countries, regions and jurisdictions have so far found it challenging to agree on standardised Covid-19 guidelines," said Simin Ngai, an aviation industry expert at Cirium.

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

Staying afloat

Much like China, other countries in the region are also looking to redirect spending into 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 hospitality industry," said Ms Ngai.

South Korea and Japan are also encourage more domestic tourism, tapping into the pent-up demand for air travel.

But for a small city-state like Singapore the concept of domestic tourism barely exists. However, its government has introduced a S$230m tourism relief bill, including cash vouchers for residents to use when visiting local attractions.

"While domestic travel is a key growth driver in the industry, Asia has yet to fully reap the benefits of the revival of domestic tourism, as many countries in Asia are historically reliant on international and intra-regional travel," 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 tickets to customers for "flights to nowhere" - the plane takes off and lands at the same airport but passengers enjoy a scenic trip.

More than 7,000 people applied for the 60 available seats offered by Taiwan's Songshan Airport in July for its 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 unused for a long time, and tyres may be damaged if not rotated regularly," said Kenneth Chen, a former aircraft maintenance engineer.

"Pilots also need to log three flights in a 90-day time period for their licenses to stay valid."

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