- In 2019, the transaction volume of outbound tourism reached RMB 800bn in China (Trip.com, Tongcheng Travel and Fliggy contributed over 60%, 10% and 20% respectively). The business volume in the past three years amid the pandemic dropped to around 10% of that pre-pandemic and was mainly generated by business trips, family visits or overseas education.
- After China’s re-opening on 8 January, the visa application business volume or the number of visa applicants grew by 800% YoY in January 2023. The air ticket booking business volume and outbound travel capacity recovered to 10% and 20-30% of those in January 2019 respectively.
“Overall, inbound and outbound flights can recover to 30-40% as expected in H1 2023 and recover to 50-60% of that in 2019 in late 2023”
- The specialist estimates that the inbound and outbound transport capacity may recover to 30-40% of that in 2019 in H1 2023. Some non-stop flights still have not been completely resumed. The number of inbound and outbound flights may recover to 50-60% of that in 2019 at the end of 2023, and increase to 2019’s level at the end of 2024.
- The outbound transport capacity will not rapidly increase in 2023 because the quarantine and visa policies of some popular destinations such as Japan and South Korea are still quite strict. Airlines plan their transport capacity one year in advance. Their plan for this year is to increase the transport capacity to 50-60% of that in 2019. The figure will only increase by 10% at most if the plan is adjusted late.
- In outbound tourism, OTAs’ commission rates for offering air ticket and hotel booking services are 20-25%, higher than that for domestic travel. Trip.com operates the highest proportion of self-operated hotel booking business and generates the highest profit margin among all OTAs and OTPs. The business volumes of Caissa Tosun, China Youth Travel Service and U-tour will not recover soon and are unlikely to recover to 50% of those in 2019.
Click here to access all the human insights in Third Bridge Forum’s China’s OTA Outbound Travel Business Recovery Trends Interview.
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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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