Skift Travel News Blog

In a strategic move to jumpstart its tourism sector, China has declared temporary exemption from visa requirements for citizens from France, Germany, Italy, the Netherlands, Spain and Malaysia.

Announcing this on Friday, the spokesperson of the Chinese foreign ministry, Mao Ning said the exemption period is set to last from December 1 to November 30, 2024.

Citizens from these six countries would be allowed to visit China for various purposes, including business, tourism, sightseeing, visiting relatives and friends, or transiting, for a period of up to 15 days without the need for a visa.

China’s recent initiatives to facilitate travel extend beyond this announcement. Just last week, the country broadened its visa-free transit policies to include 54 countries, with Norway as the latest addition. Foreign travelers transiting through China to visit a third country, can enjoy a six-day stay in specific Chinese cities without the hassle of obtaining a visa.

According to the National Immigration Administration, by the end of October, the number of foreigners visiting China had surged to 26.51 million.

China International Culture Association recently inked a three-year memorandum of understanding with online travel company Trip.com Group to promote inbound tourism.

Part of this collaboration involves supporting the Nihao! China campaign, an initiative launched by the China International Culture Association. The campaign aims to cultivate and promote cultural exchanges.

In a bid to enhance the overall visitor experience, Trip.com Group will also collaborate closely with Chinese cultural centers, tourism boards, and other organizations, working together to showcase the diverse and enriching tourism experiences that China has to offer. As China opens its doors, these collaborative efforts aim to position the country as a premier destination for global travelers.

Over the next three years, Trip.com Group had said it plans to invest in platform technology, marketing and promotion, and product integration to accelerate the development of inbound tourism in China.

Trip.com Group, the largest online travel company in the world, looks to address China’s population decline and aging demographic by offering cash incentives to employees to have kids.

Recognizing the need for a supportive working environment and the challenges posed by the population decline, the company has introduced a childcare subsidy program for its employees.

Under this program, employees who have been with the company for three years or more will receive an annual cash bonus of $1380 (RMB 10,000) for each newborn child from the child’s first birthday until the age of five.

This initiative, with a budget of $138 million (RMB 1 billion), aims to support employees in their family planning journey while promoting a healthy work-life balance.

The shift in perspective reflected by Trip.com Group signifies a broader awareness in China regarding the demographic imbalances and future challenges.

During the Skift Megatrends event in New York City in January, Skift had highlighted the significant implications for the travel industry as India surpasses an aging China as the world’s most populous country this year.

James Liang, the executive chairman of the Board of Trip.com Group and a prominent demographer in China, emphasized the importance of this childcare benefit in empowering employees to pursue both their professional ambitions and their aspirations of starting or expanding their families.

After years of advocating its one-child policy, China now grapples with the significant challenge of population decline and an aging population.

Demographers, including Liang, express concerns about the imbalance between an increasingly aged population and a diminishing number of young people, which could potentially disadvantage China in international competition.

Government projections estimate that by 2035, 30% of China’s population, or 400 million people, will be age 60 and over.

In 2019, 254 million people in China were aged 60 years or older.

In January, China’s National Bureau of Statistics indicated that the country’s population stood at 1.4 billion at the end of 2022, marking a decrease of 850,000 from the previous year.

The decline in China’s population, the first in nearly 61 years, has become a reality. The burden of supporting an expanding elderly population falls on a diminishing number of young people, raising pressing concerns about elderly care, Liang noted in a blog post earlier this year.

Moreover, a decline in the young population can hinder economic innovation and lead to a decline in entrepreneurial activities and creativity, similar to Japan’s experience, he said.

Furthermore, a shrinking young population can impede economic innovation, entrepreneurial activities, and creativity, as seen in Japan’s experience.

Various regions in China have introduced initiatives and incentives to address the population decline. These include cash rewards, extended leave, loans, tax breaks, housing subsidies, and increased paid marriage leave days.

Da Bei Nong Group, an agricultural technology company in Beijing, had announced cash rewards and extended leave for expecting parents.

While these measures aim to encourage childbirth and alleviate financial burdens, Liang emphasizes the need for long-term strategies and more comprehensive measures.

Cash subsidies alone may not be sufficient to encourage childbirth, he wrote, adding that to address the population decline effectively, reducing the costs associated with raising children, such as tax exemptions, subsidized mortgages, and affordable childcare and education, is crucial.

Additionally, overhauling the education system and reducing academic competition pressure can foster a greater willingness among young couples to have children, noted Liang.

Online travel company Trip.com Group has joined hands with flag carrier Cambodia Angkor Air to position the new Angkor International Airport as a smart airport in the region.

As part of the agreement, Trip.com Group will contribute to enhancing the digital services of the new airport scheduled to commence operations in October 2023.

The partnership also serves to position Cambodia’s competitiveness as a global destination as it aims to strengthen collaboration in various tourism sectors. This would extend to marketing campaigns, hotel development, travel visa services, and tourism talent training programs in both countries.

Expressing the significance of the new Angkor International Airport in Cambodia’s global tourism strategy, Tekreth Samrach, chairman of Cambodia Angkor Air, said the collaboration with Trip.com Group to enhance services and construct a smart airport presents an opportunity for global tourism revival.

Cambodia is estimated to have lost $3 billion of tourism revenue to the Covid-19 pandemic.

Cambodia’s New Airport Worth $880 Million

China’s Yunnan Investment Group, parent company of Siem Reap-Angkor International Airport has invested in the new airport project valued at $880 million.

A steering committee for the construction of Siem Reap Angkor International Airport led by Samrach had announced in March that the airport would be ready in time for its October launch.

Once ready, the airport that would be able to handle long-haul aircraft with the capacity to receive about seven million passengers per year initially, 10 million by 2030, and 20 million by 2050.

China is a significant source of inbound tourism for Cambodia, with Chinese tourists accounting for approximately 36 percent of the 6.6 million foreign tourists arriving in the country in 2019.

Cambodia launched the “China Ready” strategy in 2023 to attract more Chinese tourists.

As of mid-May 2023, Ctrip, a Trip.com Group sub-brand, had reported that the number of users from the Chinese mainland searching for Cambodian tourism products had increased by more than 233 percent compared with the same period last year.

In 2022, Cambodia welcomed 2.28 million foreign tourists, according to the ministry of tourism.

Outbound travel from mainland China during the Labor Day holiday period reached a three-year high this year, according to data released by travel technology company Travelport.

Also, unlike the rest of the year, the Labor Day period shows a notable increase in the length of travel with holidays lasting longer than 10 days, which could explain the popularity of long-haul destinations during this time.

Among the top 10 destinations during this period, long-haul stops like the UK and Canada have gained popularity, with the U.S. claiming the second spot, Travelport data showed.

Travel bookings for the Labor Day period increased 470 percent this year compared to 2022, while outbound bookings from mainland China in the first quarter increased by 331 percent compared to last year, said Travelport

Labor Day in China, which falls on May 1, is an annual public holiday. The period has been expanded to include a three-day break, making it one of the most popular times of the year for travel.

April 24 through May 7 (the week of Labor Day and the week prior) tend to be the most ideal dates for travelers to get away.

The five-day break starting Saturday will be the first long public holiday for Chinese travelers since the Lunar New Year.

Outbound Travel Trends for Rest of The Year

Travelport observed that for the rest of the year, tourists from mainland China are taking shorter holidays as most trips span between two and four days.

As a result, Hong Kong and Macau are the top two destinations this year for which mainland Chinese travelers have made the highest number of bookings, according to Travelport.

According to the South China Morning Post, hotel room rates in Hong Kong have risen significantly in anticipation of the upcoming Labour Day holiday, even though reservations remain lower than pre-pandemic levels.

Meanwhile, the number of visitors to Macau in March increased by 271 percent compared to the same period last year, reaching 1,956,867, according to the Statistics and Census Service.

The majority of visitors, 1,242,358, were from Mainland China. From January to March, there were 4,948,358 arrivals with the average length of stay remaining stable at 1.2 days.

Emphasizing the trend for shorter trips, Travelport’s data also revealed that of all the flight options available from mainland China, the majority (71 percent) are bound for Asia Pacific.

Low Flight Capacity

China is currently facing challenges with flight capacity. A sentiment echoed by Trip.com Group while announcing its fourth quarterly results.

Even as Chinese carriers raised international capacity by 44 percent in April, adding 935,000 seats between March and April, the current international airline capacity is only 37 percent of what it was in April 2019, according to airline data firm OAG.

Moreover, international airline capacity constitutes only 4 percent of all Chinese airline capacity.

On December 27, when China made its much-anticipated announcement removing the quarantine requirement for inbound travelers, outbound flight bookings from mainland China increased by 247 percent when compared to the same day the previous month, Travelport noted.

Pent-up demand for outbound travel from mainland China is massive, with 40 percent of respondents in a McKinsey survey wanting to travel and prioritize international destinations for their next trip.

China has been the largest source market in the world for outbound tourism since 2012.

Chinese tourists made 166 million outbound international trips in 2019, spending $277 billion on global tourism.

Chinese travelers cite financial constraints over the last three years as the leading reason for not wanting to travel abroad even as China decided to end its zero-Covid policy by easing travel restrictions, according to a report.

Chinese marketing solutions firm Dragon Trail International published a report on Thursday following a survey of more than 1,000 Chinese travelers between January 4 and 7 to gauge the consumer sentiment around outbound travel.

More than one-third of travelers said they would be staying at home because of time constraints, or because of the inconvenience of applying for a passport or visa.

China had stopped issuing passports at the start of the Covid pandemic in early 2020. Following the easing of restrictions, the administration had said it would start taking passport applications from January 8.

Even as more than 60 percent of survey respondents said they wanted to travel outside of mainland China this year, travel spending will be somewhat constrained for many in the aftermath of Covid.

Around 45 percent of those surveyed said they would keep travel budgets within $3,000.

In 2019, Chinese tourists took 150 million trips overseas per year while spending $255 billion.

Of those who plan to travel overseas, 71 percent said they would do so for 5-10 days – a point to consider when creating travel products for the Chinese market in 2023.

Another interesting insight that the survey highlights is the increasing relevance of social media platform Xiaohongshu, more popularly known as the Chinese version of Instagram, not just for travel inspiration, but also for planning.

Skift Megatrends 2023 has also highlighted how short-form video content has become such a dominant format, particularly for destination storytelling.

Recovery of outbound travel in China is expected to pick up in the second half of the year with July witnessing a strong comeback.

The survey expects a bumper 8-day Golden Week holiday from September 29-Octover 6 for mid-autumn festival and China’s National Day.

However, Chinese travelers will be travelling closer home as the most popular outbound destinations in 2023 are all in Asia with Hong Kong leading the way, while Thailand is by far the most popular foreign country.

Trip.com Group said on Friday it had tapped a $1.5 billion sustainability-linked loan facility, meaning that the financing terms link the debt’s interest rates to the Chinese online travel giant’s performance against specific environmental targets.

The Shanghai-based company will use three-year dual-tranche term loan facility to refinance some of its debt, and the rest for general corporate purposes.

The move appeared to be the first time a major online travel player adopted green finance. Last year, a shareholder initiative prodded Booking Holdings to do a climate change report. The report came out this year. In October, the company said its Booking.com brand would add emissions estimates to bookings soon. Trip.com-owned Skyscanner has estimated flight emissions for consumers for a few years.

Climate-related risk is on investors’ minds as they look at their portfolios. For travel in general, the sustainability-linked bond may provide more flexibility for investors worried about this issue, said Leslie Samuelrich, president of Boston-based Green Century Capital Management. Sustainability-linked bonds are different from green bonds. They set macro targets for a company, while green bonds commit to specific projects.

The investment concept is growing fast, Samuelrich said. Last year, lenders issued $103 billion in sustainability-linked bonds to companies across various industries. The year before that, it was about $12 billion.

In April, Ascott Residence Trust issued a sustainability-linked bond — apparently the first in the hotel sector — worth about $143 million ($200 million Singaporean). Ascott Residence Trust has committed to a sustainability performance target of greening half of its total portfolio by 2025, and its interest rates would essentially rise on the loan facility if it fails to meet the target.

The process remains murky and slow burn, though. There’s a debate about measuring the greenhouse gas emissions contributing to the climate emergency. IFRS Foundation, the international accounting standards-setting body, has this year been working on setting standards for emissions-focused reporting. Their work, and the work of other organizations, will adjust how investors evaluate climate risk — a knotty task inviting skepticism from some critics.

Side note: Trip.com’s chief commercial officer Schubert Lou will talk about the international division of Trip.com Group at Skift Global Forum East in Dubai on Dec. 14.

China’s Trip.com has struck two new partnerships, covering the UK and Asia Pacific, to give customers the opportunity to delay or spread out payments for their purchases.

In Asia Trip.com has joined forces with Atome, while in the UK it will use Klarna.

Trip.com bookers in the UK will see Klarna as an additional payment option when they arrive at check-out, where they’ll be able to choose one of three payment options: pay the full amount immediately, pay the full amount within 30 days, or pay in three installments over 60 days.

Trip.com’s Atome partnership will first only be available in Singapore, before other Asia Pacific regions in 2023.

In the face of a squeezed household budgets, buy now pay later schemes are becoming more popular. They tend to be common when buying bigger ticket items, like a vacation, but even food delivery platforms are looking to split payments for customers.

Klarna claims its short-term, interest and fee and fee free credit products deliver positive outcomes for consumers, with extremely low default rates of “well below 1 percent”.

“Klarna assesses a consumer’s ability to repay on each purchase, taking a real time view of someone’s financial circumstances which means using Klarna is never guaranteed,” it said.The company restricts the use of its services if consumers miss a payment to prevent debt building up.

Trip.com offers 1.2 million hotels and flights from 480 airlines.

China’s ongoing lockdowns are weighing heavily on Trip.com’s business trip bookings.

For its second quarter results, corporate travel revenue was $31 million, which is a 46 percent decrease on the same period in 2021. It was also 5 percent lower than the previous quarter.

The company cited “continued disruptions resulting from the Covid-19 resurgence in China,” in its results, published this week.

Just weeks ago, Shenzhen, the country’s fourth biggest city, went into lockdown.

China’s zero Covid stance is impacting other corporate travel agencies, including American Express Global Business Travel. “China used to represent 5 percent of sales for international travel. That market is still potentially at zero today. When it opens up, that’s 5 percent,” said CEO Paul Abbott last month.

China’s subdued international airline market was also one of the reasons global international traffic remains down by nearly a third versus 2019, according to Willie Walsh, director general of the International Air Transport Association.

In June, Trip.com said it would target “lower tier” cities across China in a bid to grow its share of the corporate travel market.