Every month we track the travel recovery in China, in this analysis we explore how China’s international airline capacity is shaping up this summer as China continues to open up its visas for group tours; adding a further 78 destinations to the approved country list on 10 August 2023  that travel agents are allowed to sell group tours and package travel to.

2019 vs 2023: China’s International Capacity

In August 2023, China’s international airline capacity has reached 4.6 million seats and has been steadily increasing each month this year from a very low base at the beginning of 2023 where international capacity was just 13% of the level in January 2019. 

Key Outbound Markets

China’s international airline capacity - as of August 2023 - is operating at a 50% reduction compared to 2019 levels. 

Prior to the pandemic, three countries – South Korea, Japan and Thailand - were experiencing strong growth in Chinese airline capacity. All were operating over one million seats from China in the month of August 2019, accounting for 35% of China’s international capacity.

Of these three countries, the China-Thailand market had been experiencing the fastest growth in the preceding years with capacity growing from a total of 7.9 million seats in 2015 to almost double that in 2018, reaching a peak of 13.5 million seats - an increase of 71% in just 3 years. 

Of course, compared to many of the other neighbouring countries the degree of recovery back to 2019 capacity levels is more advanced - however, there is still some way to go. 

Capacity between South Korea and China reached just under 0.6m in August, still 42% below 2019 levels, whilst Japan and Thailand were still further behind at 55% and 62% respectively.  

Of the Top 10 largest international markets in the same month in 2019, Singapore is most recovered with capacity just 20% below August 2019.  

The USA is furthest behind with just 7% of the 2019 level currently operating, meaning a market which was almost half a million seats in August 2019 has less than 35,000 seats this August. 

This will of course change with the recent announcement relaxing restrictions on group travel from China to the United States. and this will be welcome news to those US cities which previously welcomed high volumes of Chinese travellers.  Despite only accounting for 4% of all inbound foreign travellers to the US in 2019, Chinese travellers accounted for 13% of spending  and this characteristic is what has made the recent years so challenging for many destinations where not only has tourism been significantly impacted, but revenue has been hit too by a disproportionate effect. Whether this purchasing power is maintained in a post-pandemic environment is as yet unknown.   The Chinese economy is currently sluggish, with concerns emerging that GDP growth this year may not hit a targeted 5%. 

A combination of factors have also impacted on the ability of these markets to persuade Chinese travellers to return – continued restrictions on travel which impact on both the ability to travel and the perception of ease of travel; a slowdown in the Chinese economy, a realization from many in China that domestic travel in a country as vast as their homeland offers a myriad of opportunities with no passport or visa requirements; and a shift in travel aspirations. 

For a while during the pandemic, we speculated as to whether when recovery started, we might see a rush to return to ‘known’ destinations, those that were popular before, however it seems that what is happening is more nuanced. In other parts of the world, there have been surges in travel to bucket list destinations as a backlash against being unable to travel anywhere for so long.  

Whether China’s tourists do in fact return in the same numbers as before to these previously popular destinations  remains to be seen.  Competition for the previously high-spending Chinese tourist is and will continue to be fierce, with promotional activity taking place both in China and through a range of digital channels.  Undoubtedly, recovery is underway in China’s outbound markets, as travel has been restricted for so long, but whether we will see a full recovery in all markets, with similar volumes of travellers and the same level of spending is at this point still a big unknown. 

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