SINGAPORE – China may have surpassed its growth target in 2023, but weaker-than-expected consumer sentiment has raised questions about whether Chinese travellers – and their tourist dollars – will make a return this year.

Domestic travel for the world’s second-largest economy has rebounded beyond pre-pandemic levels, with tourist destinations on the mainland experiencing a robust rebound of visitors over the past year.

But overseas travel – a more expensive form of tourism – has been slow to recover. In December, China’s international air passenger traffic reached a high point of just 63 per cent of the corresponding level in 2019. For the full year of 2023, international passenger traffic was just 39 per cent that of 2019.

The absence of Chinese tourists has been keenly felt in South-east Asia, where for many countries, China had once been their largest source of visitor arrivals.

Between January and November 2023, Singapore received just 37 per cent of the visitors who had come from mainland China in 2019. Tourism receipts from mainland Chinese visitors in the first half of 2023 were just 56 per cent of the corresponding figure in 2019.

Even as China’s economic data suggests that its consumers remain cautious about spending, analysts and survey data are forecasting the continued recovery of overseas travel by Chinese tourists in 2024, albeit to sub-2019 levels.

A notable exception to Chinese consumers’ wariness of spending lies in the services sector, particularly in travel and entertainment, said McKinsey senior partner Daniel Zipser in a report in November 2023 analysing China’s consumption trends.

“After years of restricted mobility (owing to pandemic-related restrictions), there’s renewed enthusiasm for travel and socialising in restaurants and bars,” he added, noting that the slow recovery of China’s international travel in 2023 was due mainly to visa restrictions and high flight prices.

He observed that Chinese consumers were increasingly shifting their expenditures from goods towards services, and predicted that this trend would continue into 2024. 

There is likely to be a 50 per cent rise in international travel by Chinese tourists this year, bringing outbound travel to 62 per cent of its pre-pandemic level, according to a forecast by Singapore-based digital marketing firm China Trading Desk.

The firm conducts quarterly surveys of Chinese residents on their outbound travel sentiment. Its survey for the fourth quarter of 2023, released in January, polled 11,000 respondents on their travel plans and preferences.

Over half of the respondents intended to spend more than 25,000 yuan (S$4,800) on overseas trips, excluding the cost of air tickets and accommodation.

The survey also found that the majority of respondents who went abroad in 2023 were first-time travellers outside of China’s shores.

Nearly 60 per cent of Chinese tourists in 2023 are female, while over half have bachelor’s degrees and live in a Tier 1 city – a reference to China’s most developed cities such as Beijing and Shanghai.

“There’s an intriguing rise in female travellers, highlighting a shift in the gender dynamics of Chinese foreign tourism. This development beckons marketers to tailor their strategies to engage this increasingly powerful consumer segment,” noted Mr Subramania Bhatt, China Trading Desk’s founder.

Singapore, for which mainland China was the largest source of visitor arrivals prior to the pandemic, stands to gain from the impending tourism recovery.

The Republic was the most popular travel destination among survey respondents, with 13.9 per cent of those polled picking it as one of their intended travel destinations. South Korea came in second, and Europe, third.

Separately, data from China’s biggest online travel agency Trip.com showed that Singapore, Thailand and Malaysia, which have announced visa-free arrangements for Chinese passport holders, are among the top destinations favoured by Chinese tourists for the upcoming Chinese New Year holiday.

In a written reply to a parliamentary question on Jan 9, Minister for Trade and Industry Gan Kim Yong said that Singapore’s upcoming 30-day mutual visa exemption arrangement with China, expected to be implemented in early 2024, “will increase Singapore’s attractiveness as a tourist destination for Chinese visitors, and boost visitor arrivals and spending in Singapore across the retail, F&B (food and beverage) and related sectors in the tourism industry”.

Industry players here appear to be optimistic about a rebound in tourist numbers from China and beyond.

Marina Bay Sands, a popular destination among Chinese travellers, announced last week an additional investment of US$750 million (S$1 billion) to improve its luxury offerings.