7 Trends of Tourism Rebound in the First Quarter- Hong Kong Economic Times- Trends- Trend Analysis- Finance

At the end of last year, China returned to normal at a speed that exceeded market expectations and reopened its borders, catching up with the pace of normalization of global economic activities, and global business tourism rebounded. New research from the Mastercard Economics Institute (Mastercard Economics Institute), a division of Mastercard (US: MA) reveals that consumers are focusing on leisure travel and exploring new countries, and found seven trends.

The “Travel Industry Trends 2023” report recently released by the Mastercard Economic Research Institute analyzes the current global tourism situation centered on changes in the economic situation, persistent consumer demand, and the reopening of borders in Mainland China.

In the face of changes in the economic situation, consumers tend to enjoy experiences more than buying goods after the epidemic, coupled with their continuous demand for leisure travel, will shape the development prospects in 2023. Business travel initially lags behind leisure travel and starts to gain ground in the second half of 2022. The institute expects the reopening of mainland China’s borders to boost global growth, with the Asia-Pacific region particularly benefiting, amid economic uncertainty causing turmoil across markets. The newspaper noted:

1. Hong Kong will continue to be a tourist hotspot for the rest of the year

In September 2022, the Hong Kong Special Administrative Region Government lifted the mandatory quarantine requirements for arrivals in Hong Kong. In the same month, Hong Kong was also among the top ten international tourist destinations for tourists in the Asia-Pacific region for the first time since February 2022. Hong Kong continued to climb the rankings and ranked third in February and March this year, surpassing Singapore and Japan. Popular tourist destinations are dominated by tourists from the Asia-Pacific region and the United States, with mainland China and Hong Kong continuing to be popular. Hong Kong’s status as a tourist hotspot is expected to continue for the remainder of this year.

2. China’s reopening benefits global tourism

The reopening of mainland China’s borders has benefited global and Asia-Pacific tourism. The experience-based economy is expected to be boosted by a strong economic growth momentum driven by pent-up demand for tourism in mainland China, which reopened its borders after undergoing strict epidemic control.Compared with last year when only limited tourism was allowed, passenger experience spending in March 2023 has reached 93% of the full year of 2019. Economies in the Asia-Pacific region have close ties with mainland China in terms of international trade and tourism, coupled with their geographical proximity, will significantly benefit from the reopening of borders in mainland China.

3. In the first quarter, mainland tourists spent more on certain items in Hong Kong than in the first quarter of 2019

Wealthy tourists from mainland China, who have historically been richer than other travelers on retail (especially clothing) and groceries, will boost sales after customs clearance, thereby boosting Hong Kong’s economy.In March 2023, mainland Chinese tourists will spend 95%, 121% and 145% of the amount in March 2019 on goods, experiences and luxury goods in Hong Kong, respectively.The institute expects that mainland Chinese tourists will drive the economic performance of the Asia-Pacific region, ahead of the rest of the world.

4. Leisure travel flight bookings in the first quarter increased by 52% compared with the first quarter of 2019

Tourists in the Asia-Pacific region are eager to explore regional and international destinations, creating diverse opportunities for the tourism industry. Rapid urbanization, technological development and the expansion of the middle class have all led to an increase in outbound travel. Taking Hong Kong as an example, the number of leisure travel flight bookings in March 2023 will increase by 52% compared with the same period in 2019, and it will also increase by 592% compared with the same month in 2022; A surge of 698% over the same period. Growth has been further catalyzed by the emergence of low-cost airlines, improved visa policies, and travelers’ increasing emphasis on experience and adventure travel.

5. After the epidemic, mainland tourists spend more on experiences than goods

Travelers continue to prioritize the experience. Even as travel restrictions are lifted, travelers continue to prefer experiences over purchases and show new needs for something unique and memorable. As of March 2023, global spending on experiences is up 65% from the same period in 2019, while spending on goods is up 12%. As Mainland China opens up its economy, its demand for essential goods will shift to non-essential services such as travel, hospitality and experiences, and travel-related items such as luggage.

The institute predicts that even though mainland Chinese tourists love to shop, they will spend more on experiences than products after the epidemic. Luxury travel experiences, including luxury travel and high-end accommodation in places such as France and Italy, will prompt mainland Chinese tourists to return to the experience economy after the epidemic.

6. Experience and commodity consumption in different regions vary

Given the current state of the labor market and savings, discretionary spending may show resilience, but experience and commodity consumption vary by market as inflation and interest rates affect consumers differently. For example, after the relaxation of travel restrictions in Macau, tourist experiential consumption almost immediately returned to the pre-epidemic level, up 17% from 2019. By contrast…

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