McKinsey conducted five rounds of surveys to understand Chinese travelers’ sentiments—the latest results indicate an emerging pattern of periods of suppressed travel demand followed by a quick recovery.

Although Chinese consumer confidence is growing, desire for travel has shown a faltering recovery due to sporadic COVID-19 outbreaks. A predictable pattern is emerging where desire for travel recovers roughly two months after a decline and even though international travel is restricted, the desire for travel remains. Furthermore, travelers’ preferences are shifting, with implications for travel companies.

This article updates findings of McKinsey’s Survey of Chinese Tourist Attitudes and compares the results across the five surveys taken in April 2020, May 2020, August 2020, January 2021, and October 2021. It also examines the implications of shifting attitudes toward travel and offers actions that travel companies may consider when planning for the year ahead.

Consumer confidence is growing but desire for travel shows a pattern of spikes and dips

Confidence in China’s recovery is growing—consumer confidence is now at the highest level since the start of the pandemic. In February 2020, consumer confidence was at 43 percent. In October 2021, 67 percent of respondents indicated that they believe the Chinese economy will recover within two to three months

As confidence grows, consumer spending is also showing signs of recovery. The latest Survey of Chinese Tourist Attitudes indicates that the majority of respondents, 77 percent of households, expect their income to stay constant in the near future and essential spending and discretionary spending have both increased since March 2021 and are stabilizing.

When it comes to travel sentiment, desire for travel has spiked and dipped as COVID-19 outbreaks continue. Previous McKinsey research indicated that the resurgence of domestic travel would support China’s travel industry recovery.2 But, with recent sporadic outbreaks, confidence in domestic travel has been affected. For instance, in October 2021, only 2 percent of people planned to travel in the next two months. But comparing the results of the five tourist attitude surveys, it appears that COVID-19 outbreaks suppress travel desire for up to two months. The good news is that confidence in domestic travel safety quickly rebounds, showing a predictable pattern of recovery.

Travel patterns echo the fluctuations in travel aspiration. The number of airline passengers increased by 61 percent between August and September 2021, then increased by 8 percent in October, followed by a decrease of 45 percent between October and November. Similarly, the number of rail passengers showed a 47 percent increase, a 9 percent increase, and a 42 percent decrease in the same months.4 But despite the fluctuations, the sentiment survey shows that the desire for travel remains. Currently, 42 percent of respondents plan to travel domestically for their next leisure trip, 26 percent of these involve flights of more than three hours of travel time.

International travel remains attractive, but recovery seems to be still a long way off

Chinese travelers express a desire to travel, both domestically and abroad. Even though international travel is restricted and the majority of respondents still perceive international travel as unsafe—and are not planning international travel in the near term—the survey shows continued strong interest in international destinations. Desire for overseas travel has rebounded to pre-pandemic levels with APAC being the top choice (24 percent). Southeast Asia, Europe, Russia, and Japan are named as the most desired overseas destinations.

Various factors affect willingness to travel internationally. As China’s policy announcements continue to delay any international opening, outbound leisure travel will likely be slow to return. To travel internationally, the Chinese consumer wants to see close to zero COVID-19 cases in the destination country (86 percent rated this as a top 3 factor). As the world adjusts to endemic COVID-19 with outbreaks of new variants, this scenario may be unlikely in the near future. Recently it looked as if Hong Kong might be the next destination to open, given its low COVID-19 cases, however, the traffic impact is difficult to predict and the recent outbreaks add an extra layer of complexity to the border reopening. The second most important factor for Chinese travelers is the removal of quarantine in China upon return (84 percent).

The latest findings have implications for travel companies, particularly around product, channel, and loyalty

Even during the current travel restrictions, there are shifts in traveler preferences and behaviors which may endure. Consumers and travelers are adapting to circumstances, and confidence in domestic travel safety tends to rebound quickly after sporadic outbreaks. As international travel is still restricted, domestic travel has revived, albeit in spikes and dips. There are strategies that travel companies could consider in this new landscape, including how they approach product, channel, and loyalty.

Develop travel products to match consumers’ travel aspirations

New domestic travel products have already been developed to substitute for overseas travel. As consumers’ travel aspirations change, companies could consider ways to match product offerings to current desires. The latest wave of the survey shows that travelers are looking forward to visiting new attractions, but due to travel policies, nearly half of respondents said a short trip to a new site is their number one choice. A short-haul trip to see a new attraction is top of mind (49 percent), followed by a long-haul trip to explore a new destination. For revisits, respondents favor longer trips to more interesting sites over shorter trips.

Consequently, travelers are planning trips around their hometown cities as a first choice. This preference provides opportunities for tourism companies to attract in-city demand by providing experiences in line with what travelers are looking to do during these trips.

In terms of expectations around what travelers wish to experience on their leisure trips, interest in visiting cultural or historical sites has increased from 39 percent to 44 percent and is now the second most favored activity. This has surpassed beach and resort trips, although these still remain popular. Shopping and “foodie” trips which featured as categories of interest in previous surveys no longer rate in the top five. Outdoor scenic destinations remain the most popular.

Even as people favor trips in their local cities and nearby areas, they are seeking more sophistication and satisfaction beyond buying something new or experiencing new cuisine. Emotional satisfaction is becoming increasingly important. This is in line with the pre-COVID-19 trend of moving away from functional travel, to experiential travel, and ultimately to transformational travel. In other words, travelers wish to learn something new or have a transformative personal experience during their leisure trips.

Accordingly, travel companies could develop products around the major cities as well as culture-trip products inside the cities in response to the desire for short-haul trips exploring new attractions with a preference for culture visits. Companies have begun to act on these trends. For example, Dishui Lake, an hour’s drive from Shanghai witnessed double the number of tourists from 2019 to 2021.6 In another example, several leading travel-product providers have increased the number of citywalk products for historical sites.