China’s economic struggles may raise concerns, but they are unlikely to impede the global resurgence of Chinese tourists, who are poised to become the next significant driving force for the travel industry. Despite financial uncertainties, the pent-up demand accumulated over the past three years of travel restrictions will far outweigh any reservations they may have.
The tide is turning worldwide, as people shift their spending patterns from material possessions to cherished experiences in the aftermath of the pandemic. This shift has created a fertile ground for the revival of travel, and China is expected to succeed once comprehensive reopening plans are unveiled.
Conor Cunningham, an analyst at Melius Research, believes that as restrictions ease, pent-up demand will propel China to act as a positive force in the industry. In fact, Royal Caribbean Group (RCL) has announced its return to the country in April 2024, further solidifying China’s potential as a lucrative market.
While domestic travel saw a surge in the United States last year and international vacations are making a comeback this summer, travel to and from China has yet to fully recover. However, this is precisely the untapped area of the sector that holds immense potential for future growth.
With China’s high-spending tourists ready to reemerge and explore the world, the travel industry can look forward to a promising future.
A Promising Future for US-China Travel
Despite the recent lifting of Covid restrictions in China, it is only in the past year that Beijing has finally allowed group tours to resume in various destinations, including the U.S., Australia, and Japan. However, this delay in reopening has not dampened the prospects of travel between the world’s two largest economies.
Interestingly, any potential downturn in China’s economy is unlikely to have a negative impact on travel between the U.S. and China. Currently, the number of weekly flights between the two countries is limited to just 12. However, the Transportation Department recently announced plans to double this figure to 24 Chinese passenger flights per week, starting from the end of October. In response, Beijing has agreed to reciprocate by allowing U.S. carriers to increase their flights as well. Well-known airlines like Delta Air Lines, United Airlines, and American Airlines have already expressed their intentions to expand their flight schedules to China.
Although doubling the number of weekly flights is still a fraction of the 150 round trips allowed before the pandemic, the demand for these flights remains strong. Considering the successful recovery of international travel over the summer, TD Cowen analyst Helane Becker expects a shift towards Asia Pacific travel next summer, with the increase in flights between the U.S. and China serving as a catalyst for this expected boom.
As we look forward to a promising future for US-China travel, it is evident that both countries are working towards expanding their flight capabilities. With increased accessibility and a growing demand, the prospects for travel between the U.S. and China are brighter than ever.
