With lockdowns back across several countries to contain the possible second or third wave of COVID-19, China’s domestic travel rebound has fueled discussions in the travel and tourism sector. As a result, mentions around "China" and related keywords have risen by over 16% in 2020 (as on December 10) earnings call transcripts compared to 2019, reveals GlobalData, a leading data and analytics company.
As the Chinese government continue to impose strict quarantine measures for the returning travelers, people have looked at domestic travel. For the upcoming 2021, GlobalData expects Chinese luxury hotel room occupancy rates to be a cut above budget or midscale rooms. Companies such as Hyatt and Hilton have seen recoveries in China with improving occupancy rates since mid-2020. At the same time, Mariott also experienced an occupancy rate boost while expecting to reach 2019 levels by 2021.
Rinaldo Pereira, Senior Business Fundamentals Analyst at GlobalData, says: “China’s domestic travel recovery caused Hyatt, Hilton and Mariott to experience an occupancy upswing. With the Chinese government successfully containing the spread of COVID-19, there seems to be a light at the end of the tunnel for hoteling chains.”
In fact, GlobalData’s COVID-19 tracker, published on December 10, found that only 30% of Chinese respondents expect to reduce domestic travel in the new normal. While around 60% of Chinese respondents are likely to favor lesser international travel.
As domestic travel recovered, Chinese airlines including China East Airlines, China Southern Airlines, and Air China added 10 new domestic routes in November. Furthermore, China Southern and Air China also witnessed domestic passenger growth in October 2020 compared to the same month in 2019.
Mr Pereira concludes: “Despite domestic tourism in China taking an obvious hit in 2020, GlobalData expects it to be better placed to recover due to infrastructure improvements and investment. The 2021 Chinese New Year is also likely to give a boost to the tourism sector with recovering traveler sentiment.”