7 key developments in China’s major segments
- September 2020
Although COVID-19 will remain a threat to every country for at least several months to come, China's approach seems to be keeping it under control, according to Phocuswright's latest travel research report China Travel Market Update 2020. From mid-April through the end of August, there was not a single day with more than 300 reported cases in China, a country of 1.4 billion people. International travel remains very restricted, and the government enforces and facilitates quarantine on arrival.
The resumption of travel in China is supported through a health rating system embedded in Alipay and WeChat that assigns would-be travelers a score which determines whether, where and how they can travel. The government and the industry have rolled out demand-stimulation initiatives including discounted attraction tickets, rail markdowns based on how early tickets are booked, and competitively priced flight subscriptions. These efforts have stimulated some demand, but travelers remain cautious. Here are the key developments of the top segments in China:
- Deals with the Devil?: China's major carriers experimented with flight subscriptions to bring back demand.
- Cautious comeback: By mid-August 2020, China had reopened connections to 20 countries, with more to follow.
Hotel & Lodging
- Getaways get a boost: Pockets of success have popped up in the lodging market.
- Exception to the rentals rule: China lacks the type of vacation rental supply to meet demand for isolated trips (most are in dense cities).
- Healthy air, healthy rail: Increase air fares will restore the attractiveness of high-speed rail as a low-price option.
- Can car rental capitalize over the long term?: The Chinese government has targeted auto sales to stimulate economic activity, which could lead to a share of potential rental customers purchasing personal vehicles instead.
- Reaching travelers: Airlines and hotels continue to lean heavily on OTAs to reach travelers, even as they are forced to offer steep discounts to stoke demand.
Download this Phocuswright travel research report here, which presents a high-level overview of the China travel market in 2020, including the impact of the pandemic on major players, key segment analysis, and sizing and projections through 2020.
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