Inside China’s Domestic Tourism Market Recovery: How Gen Z is contributing?

Source: Official Weibo of The Forbidden City

With the unexpected hit by COVID-19, consumers’ willingness to consume suffered a great slump. The United Nations World Tourism Organization (UNWTO) reported during the second quarter of 2020 for the first time ever that 100% of global destinations introduced travel restrictions. As a result, international tourism has been almost totally suspended.

From the consumers’ perspective, COVID-19 has caused huge financial uncertainties, thus curtailing their expectation of future travels. The UNWTO estimates a loss of 850 million to 1.1 billion international tourist arrivals and 910 million to $1.1 trillion dollars in export revenues, depending on whether the borders are open in July, September or December.

China’s domestic tourism market showing signs of recovery with new trends

China’s domestic tourism market also confronted great loss. According to the “2020 Data Analysis of China’s Tourism Affected by COVID-19” released by iMedia Research in June, it is estimated that during the Chinese New Year, a peak season of travel in normal times, the income loss of tourism industry caused by the pandemic is expected to exceed 500 billion RMB, equivalent to about 2% of the GDP in the first quarter.

Chinese Domestic Tourism Data, from Luxurynsight
Chinese Domestic Tourism Data, from Luxurynsight

Fortunately, as the pandemic control measures in China took effect, social life has gradually returned to normalcy, with tourism market showing signs of recovery. During the 5-day Labor Day holiday starting from May 1st, the country’s domestic tourists contributed travel income of 6.7 billion dollars and total tourists reached 115 million. Among these travels, the concepts of short-haul trips and “pre-planned trips” are now the new trends, however, as a matter of fact, these two concepts are nothing new among Gen Z consumers.

Quality and leisure both matter to Gen Zers

Planning trips via OTA APP is normal among Gen Zers
Source: Internet

Growing up alongside the development and prosperity of the Internet, Chinese Gen Zers are highly digital savvy. When it comes to travel planning, Gen Zers can finish the entire consumer journey online, from customizing routes, booking accommodation, purchasing tickets to learning about local specialties.

Despite the economic uncertainties brought by the pandemic, Gen Z travelers exhibit pursuit for quality trips. According to research by Mafengwo, China’s leading OTA and tourism UGC app, 47.2% of the respondents said that COVID-19 had little impact on their tourism consumption level; 16.77% of the respondents said they will increase budget in catering, accommodation and transportation.

Chinese domestic traveler
Source: Internet

Meanwhile, COVID-19 has made Gen Zers more cautious in selecting destinations and planning the trips. Outbound travel is still in a long-term wait-and-see stage, which naturally boosts consumers’ zeal for domestic short-haul trips. In fact, even before the pandemic, due to the limitation of time and the pressure of work or study, Gen Zers are inclined to choose weekend short-distance and vacation-style trips for leisure – though such consumption concepts were often regarded as “luxury” by the elderly generations.

Takeaway for the future

As the pandemic situation is stabilizing in China, Gen Zers possess a more optimistic attitude towards tourism consumption. It is also a good opportunity for industry leaders to transform the tourism business model and better cater to the young travellers.

In the past, group tours in China were often cursory, but the Internet has reshaped the tourism industry. Gen Z is no longer satisfied with simply touring around scenic spots, which has promoted tours focusing on leisure and enjoyment to a greater extent. Today, after the hit of COVID-19, it is ever more vital for all sectors of the industry, from B&B and hotel to OTA, to stay agile and adapt at this juncture, as the new trends are undoubtedly the choice of Gen Z.