China: Rentals United co-founder and CEO, James Burrows, discusses how Chinese tourists are likely to be among the first in the world to restart travel in 2020, after the company’s partnership with China’s largest OTA, Trips.com.
The coronavirus pandemic has rapidly worked itself around the globe devastating lives, economies, social structures, and businesses while wreaking havoc on the mental and emotional stabilities of all citizens. In Wuhan, China – the scene of the first Covid-10 outbreak – lockdown restrictions have been lifted and recovery is well underway.
China has become an important centrepoint for the recovery of the global travel industry for two main reasons. Firstly, the world can look to China for recovery strategies and as an indication of what to expect once travel restarts. Secondly, Chinese travellers will be the first to start travelling while the rest of the world begins its recovery. They will make up a significant pool of potential customers for the worldwide travel industry.
To tap into this pool, short-term property managers will need to list their properties on China’s most popular OTAs such as Trip.com and Agoda. But to begin with, let’s look at the current state of recovery in China.
With lockdowns lifted in mainland China, most businesses and schools have reopened. Consumer attitudes are positive but cautious. The two hardest-hit industries are out-of-home [OOH] dining and travel. Fortunately for these two industries, the potential level of rebound spending is sizeable: 82 per cent of the respondents of Kantar’s China-wide consumer survey said they will resume their cancelled OOH dining spending once the outbreak is over, 78 per cent will resume their cancelled spending on travel.
Chinese Recovery Trends
Chinese tourists are slowly regaining their confidence in domestic and eventually international travel. While still taking the necessary precautions, travellers from China are expected to be among the first in the world to restart travel in 2020. Both flight and accommodation bookings across the country have shown constant recovery since April. China is recovering its usual number of domestic flights per day compared to January 2020. International travel is limited as borders are still closed, and a 14-day quarantine is still mandatory upon arrival.
Younger generations without families are more adventurous and eager to travel first. On Tomb Sweeping Day, the first big holiday after the pandemic in April, 60 per cent of the people who booked trips were below the age of 30, a distinctive increase from 43 per cent in the same period last year. Travel outlets targeting millennials will reap the benefits of the beginning of recovery.
The Changing Nature of Travel
The mental and emotional effects of the lockdowns have changed travellers’ behaviours in China, at least for the near future. Peak recovery time is expected to arrive after September with bookings that seem to even out at the same slopes as last year. With international borders still closed and uncertainty around when they will open, Chinese travellers are planning their ‘revenge travel’ – catching up on cancelled trips – for the next big holiday, National Holiday, at the end of September / beginning of October.
In the United States, bookings for the fall are already at the same levels as last year, with the summer, however, falling short. Naturally, people are still uncertain about when lockdowns are over and when borders will open, so they are tentative to book travel for this coming summer. This is, however, a positive sign that traveller sentiment is on the up and guests are actively booking for the fall and holiday seasons. Furthermore, when confirmed dates for border openings are announced, bookings for travel will surely skyrocket.
As a result of the pandemic, travellers are also seeking more economical options. Lockdowns have led to economic recessions which are causing people to be more discerning with their spending. However, travellers in China still seek a certain level of comfort: mid-range to upper-midscale appear to be popular choices.
A Ctrip survey found that 85 per cent of travellers in China would spend less than CNY10,000 [1,260 euros] on travel this year, compared with only 27 per cent in 2017. This exemplifies that the mid-scale to economy performed relatively well during the pandemic crisis and will likely rebound faster.
In line with the recovery we are starting to see in Europe and America, travellers are seeking outdoor nature destinations and also family and reunion travel.
The pandemic is driving many people out of cities, away from the crowds. Our data is showing an upsurge in bookings at remote, off-season locations – especially for luxury rentals. Families are looking for longer stays at rural hideaways to isolate themselves while also being close to nature.
Initial leisure travel, however, will be based on new factors such as reuniting and reconnecting with family members [and with family whom they have been separated from for months], rather than travelling for pure tourism and sightseeing.
In China, group and guided-tour packages will no longer have as much appeal and social distancing rules are still relevant. This will drive the self-guided and self-driven markets, marking a huge opportunity for short-term rentals as they are more attractive for large families, off-the-beaten-track locations, and self-guided travel.
What this means for the rest of the world
The recovery trends that we are seeing in Europe and America are already trailing behind those in China. Property managers can take advantage of recovery strategies already proven effective, such as special hygiene protocols, social media promotions [especially via WeChat], and aggressive pricing promotions.
As international borders open, property managers have an advantage to prepare for attracting Chinese travellers to their properties and destinations. As you see here, Chinese travellers come in only second after American in terms of short-term rental spending.
It’s inevitable that there will be occupancy gaps over the next 12 months and the importance to reach a wider audience and tap into alternative markets will become paramount.
The global mobility crisis will come to an end and we are seeing the United States and Europe already mirroring the recovery phases and characteristics of China. International long-haul travel will return and when it does, we can look at Chinese travellers to be the first to market in literal and emotional terms.
James Burrows is the co-founder and CEO of Rentals United, an advanced channel manager for professional short-term rental property managers across the world. Rentals United is connected to Trip.com. For more information, visit the Rentals United website here.