China’s Thriving Domestic Tourism Now Suffers From Extended Covid Restrictions

Skift grip

Local tourism businesses are using all the tricks in the book: tax breaks, discounted tickets and “consumption vouchers” as lockdowns and mass testing begin to hurt inter-provincial travel.

Matthew Parson

As China’s domestic tourism plummets, desperate provinces are slashing ticket prices, offering tax breaks and even begging locals to help save plummeting tourist revenue in a sector that employs tens of millions of people. people.

The slump in tourism – which includes travel, accommodation and restaurants – persisted into 2022 due to wider Covid-related restrictions on inter-provincial travel, lockdowns and endless mass testing, according to the official data.

Provinces that rely on northern tourism for growth are particularly affected, such as Hainan and Yunnan, as well as regions with smaller windows of warm, tourist-friendly weather.

The slowdown has worsened in recent months with the introduction of the Omicron variant, leaving the industry in its worst shape since before the pandemic and bodes ill for a sector that contributed 11.05% to China’s gross domestic product in 2019 and supported nearly 80 million jobs, or 10% of all jobs.

Tian Yun, a former economist with the state economic planning agency, said he expected inter-provincial travel to resume during the three-day Dragon Boat Festival holiday in early June.

“If inter-provincial travel is banned during the Dragon Boat Festival, tourism and related consumption will be chaotic this year,” Tian said.

A continued tourism freeze could remove at least 0.5 percentage points from China’s GDP growth in 2022, he said. The government has set itself a growth target of around 5.5% this year.

Deterrence

Factors keeping tourists away include dramatic reductions in passenger flights and sudden cancellations.

The number of weekly flights nationwide stands at just over 35,000 flights, according to aeronautical data provider VariFlight, the lowest since the year 2000.

Amid travel restrictions, tourists from other provinces made up just 5% of visitors to scenic spots across China during the tomb-sweeping holiday in early April, official data showed.

Hohhot, capital of China’s northern region of Inner Mongolia and known for its lush green grasslands, saw the number of tourist trips drop by half during the holiday. Tourism revenues fell by 53.5%.

Even the southern island province of Hainan, nicknamed Hawaii in China with its year-round mild climate, has not been spared.

The number of tourist trips to Sanya, a beach destination in Hainan, fell 99.4 percent during the holidays, according to official statistics. Hotel occupancy in Sanya averaged 12.6%.

Even in a larger province like Yunnan, where leisure travel accounted for 90% of the service sector in 2019, authorities had to introduce measures such as tax cuts to help tour operators.

To attract local visitors, the scenic town of Dali, a major destination in Yunnan, began distributing 10 million consumer vouchers on Friday. Ticket prices for scenic spots have also been reduced.

Dependence on premises

Local visitors helped boost the number of tourist trips to Ningxia, a poor tourism-dependent autonomous region in northwest China, by 21.1 percent a year earlier during the tomb-sweeping holiday.

Slightly smaller than Ireland, Ningxia wowed its local population of 7.2 million with passes to more than 60 scenic spots for 199 yuan ($31), a giant discount from normal prices totaling nearly $470.

Despite the increase in the number of visitors during the three-day holiday, revenues fell by 16.3%.

“(Residents) have their own cars and can go to scenic spots on their own,” Ningxia driver and guide Gu Xuebo told Reuters. “And there is no demand for accommodation and food from the local population.”

Gu said his 14-seater van had been gathering dust in the garage since August. A few months later, his travel agency was banned from serving tourists from other provinces. This year, Gu only had two clients.

“Several drivers who worked with me for six or seven years have all changed jobs,” said Gu, who works as a personal driver and offers ride-sharing services.

Reservations at the Desert Star Hotel in Ningxia’s Shapotou Scenic Area are down 70 percent from a year earlier.

“Tourists from other provinces cannot come here, so we have to rely on local tourists,” said a hotel manager named Zhang. “It’s better than having no one.”

(Reporting by Ellen Zhang and Ryan Woo; Additional reporting by Stella Qiu. Editing by Gerry Doyle)

This article was written by Ellen Zhang and Ryan Woo of Reuters and has been legally licensed through Industry Dive Content market. Please direct all licensing questions to [email protected].