In 2019, Chinese travelers made 155 million outbound trips, spending $245 billion cumulatively on outbound tourism, greater than the size of New Zealand’s total economy. After almost three years of border closure, Chinese travelers are finally coming back. We surveyed 3,495 affluent Chinese consumers (those with a minimal monthly household income of ¥30,000, representing about 5% of China’s total population in 2022) to understand when and where we would see them again, and just as importantly, whether their abundant international shopping, especially for luxury products, would continue.

No full recovery yet as domestic travel still seen as a great alternative by many

Although the majority (about 60%) of experienced international travelers (those who traveled internationally before COVID-19) already have or are planning to travel in 2023, about 30% plan to wait more than two years before traveling internationally again. While we thought that after three years of border closure, everyone would be wishing to travel internationally again soon, for some the opposite has happened. In fact, 73% of the experienced travelers who have decided not to travel internationally in 2023 have made this choice as they prefer to travel domestically, having discovered the attractiveness of traveling at home during the last few years. Taking new international travelers into account, we expect a full recovery of Chinese outbound tourism in the second half of 2024 at best.

Experienced travelers returning to familiar places

If we look at the top destinations for 2023, there are no surprises, with Chinese travelers first going back to familiar places. Hong Kong SAR, Western Europe, and Japan are top of the list for experienced travelers. Almost 40% of those who have visited Western Europe before plan to go there again this year. We expect an increasing number of Chinese travelers in Europe later this year, and believe that Japan and South Korea will pick up significantly during the October holiday now that group tours are allowed.

Shopping once again key reason for international travel, but majority of luxury spending to remain domestically

Before COVID-19, our surveys revealed the importance of shopping was declining year-on-year, with exploring scenery becoming the key reason for international travel. We now see that shopping is back on top (Exhibit 3). This is followed by enjoying nice food. Especially among Gen Z travelers, we see that there is a pursuit for culinary delights, with 62% of them saying that indulging in gastronomic experiences is their top reason for international travel.

While shopping is the main reason for international travel, it seems the majority of luxury shopping will not happen abroad. Chinese luxury shoppers who travel internationally this year expect to spend 20% of their luxury budget internationally and 80% domestically. Interestingly, we see a big difference between experienced and new luxury shoppers (those who only started buying luxury products during COVID-19 and so only have domestic luxury shopping experience). While about 85% of experienced luxury shoppers expect to revert to shopping overseas now that borders are open, only about a third of new luxury shoppers also feel this way. These new luxury shoppers also have very high expectations on service levels internationally as they are used to very personal and frequent interactions with the sales associates of their core luxury brands domestically. With the luxury market booming in China in 2021, all luxury brands have invested in boosting their offerings in China. Given the wide domestic offerings, Chinese luxury shoppers see less of a need to shop internationally. They are now also used to buying luxury products when they want them instead of waiting to travel to do so. Gen Z represents a big part of these new luxury shoppers, and they are looking for new experiences and food rather than shopping. 

Gen Z is the biggest group of new travelers

Four years is a long time, and new types of Chinese travelers have emerged since 2019. Around 30% of the new travelers in 2023 are the new Gen Z workforce, who now have a stable income and the means to travel internationally. They care less about shopping and look for new experiences or something special which they can share and post about on social media. They are typically on a smaller budget, so they are going for trips close by in 2023 and their aim is to maximize the number of experiences they can enjoy in a short time. They are used to luxury shopping at home so they do not wish to waste these short trips on shopping.

Those who are anxiously waiting for the full return of Chinese travelers will have to wait a little longer and be prepared for a new type of Chinese traveler who has higher expectations given what traveling and shopping at home now has to offer.