More Robots, Smaller Groups: The New Reality of Chinese Outbound Travel
With a slight increase in designated pandemic risk areas across China and a reduction in incoming flights enacted by the Civil Aviation Authority recently, China remains very much aware of the pandemic and the idea of the “new normal”. Venture capital is also betting on long-lasting new habits built during the pandemic, as the Meituan-backed Pudu Robotics just raised RMB500 million in its Series C financing round. What does this mean for the travel industry? In short, China’s rather keen on a future where viruses cannot preclude the delivery of government, travel, food and beverage and entertainment services. Put another way, China wants to be able to choose human contact as an optional extra of everyday life, and not as a permanent feature.
This “SARS Mask Effect”, where China’s consumers maintain certain behaviours beyond the pandemic that necessitates them, is coinciding with a large-scale return to normal within China’s borders, further reinforcing the normality of these behaviours. Unlike European nations or the USA, where there has been a binary tradeoff between pandemic controls such as lockdowns and life as usual, China has pivoted to a new version of reality where small travel groups and virtual experiences are completely normal. The international brands re-entering the China market now are having to fit into a whole new ecosystem, as Art Basel, Puy de Fou and Disneyland launch with added layers of protection and virtual experiences.
The changes in China’s travel and leisure landscape are, predictably, as much online as they are offline. The OTA industry now finds itself in the crosshairs of China’s cutthroat tech players, with Didi and Douyin starting their own small OTAs as a way to boost margins and reach on their massively successful platforms. Since they own the rails of this whole new ecosystem, China’s upcoming tech juggernauts are stepping up to incumbents such as Alibaba’s Fliggy and Ctrip to create immersive closed-loop systems, where consumers consume content, make purchases and generate their own content all on one platform. As China’s digital media space has just exceeded 100,000 full-time travel bloggers, engagement for international brands with the massive ecosystems and the tastemakers that rule them will become crucial.
Who stands to gain the most in this new post-pandemic world? Cultural tourism destinations, it seems, as Labour Day holiday data suggests that museums across China racked up significant visitor numbers growth, particularly among older demographics. One-third of China’s population now falls into the middle-aged and senior citizen bracket, with much more disposable income and time than their younger compatriots, according to Ctrip research. The same research results indicate that this demographic segment is often unsatisfied with travel products and experiences on offer, hinting at significant market share yet to be gained among China’s most well-off travellers.
